16 Rules for Effective Decision-Making

https://www.leadershipnow.com/leadingblog/2019/04/16_rules_for_effective_decisio.html

16 Rules for Effective Decision-Making

WHERE WE GO in life is determined by the choices we make. How we make those decisions becomes critical. The speed of change, the abundance of choices, the unknown unknowns, and the impact of a connected world, all conspire to make decision-making a labyrinth. We face traps everywhere.

In Labyrinth: The Art of Decision-Making, Pawel Motyl examines “The most prevalent weak spots in decision-making processes, not only in business but in life in general; during crisis and calmer times; in both individual and group decisions.” 

I agree with Motyl that “We really do live in a world where everything is out of whack and everything we thought we knew is being called into question.” It calls for a deeper look at not just what we think, but more importantly how we think and a clear understanding of how we got there.

Motyl digs into the series of decisions that led to some of the modern world’s most dramatic events: from the Cuban missile crisis to the 1996 Mount Everest climbing disaster; from the Apollo 13 rescue mission to the ill-fated Daimler–Chrysler merger.

Using many and varied examples Motyl reveals 16 rules for effective decision-making. The rules with the accompanying narrative are well-researched and intriguing. Here is the overview: 

Rule #1
Prepare for a black swan (an unpleasant surprise or event that we cannot predict from prior experience), because one thing is certain: sooner or later you will meet one. Because of easy access to information and globalization, black swan events are on the rise.

Rule #2
The better it’s going, and the more successful you are, the more you are at risk of turkey syndrome. The deeper you fall into turkey syndrome, the nastier your black swan will be.

Rule #3
The more you admire someone, the more critically you should examine their opinions. The more exciting somebody’s vision seems, the more closely you should test its foundations in reality. This fundamental misunderstanding comes into play here: “a harmonious group = a tight group = an effective group”

Rule #4
The more everyone around insists something is impossible, the more you should check it yourself. Several times.

Rule #5
The greater the investment of time, effort, money, and our own reputation, the harder it is to objectively assess a situation and make the right decision. 

Rule #6
If you find yourself in a black swan situation, go into inquiry mode. Whatever your intuition or experience is telling you may be wrong. 

Rule #7
Set up your own Executive Committee. Surround yourself with people who don’t think like you. Value those who disagree with you, and who aren’t afraid to say it.

Rule #8
When improving and organization, also pay attention to the best and most efficient processes. In a black swan situation, they can fail. Do you have a backup plan?

Rule #9
Shoot down Concordes and hunt for monkey habits. Eliminating loss-making projects and bad practices frees up time for other things, increasing a company’s agility and flexibility.

Rule #10
Recognize the value of your failures (and those of others). Thoroughly analyze your past failures and draw in depth, objective, and actionable conclusions for the failure.

Rule #11
Never stop shaping the organizational culture. It can be your greatest ally, or your worst enemy, in making the right decisions.

Rule #12
Great leaders are distinguished by their awareness that greatness is no guarantee of infallibility.

Rule #13
Don’t be a “decision drunk”—use data for illumination, not only for support. Data can be a great ally, when properly analyzed.

Rule #14
Never ignore the values and convictions of other generations, especially those only just entering the market. Even if their influence on decision-making today is minimal, the new normal means this may change sooner than you expect.

Rule #15
The world of data overload is also a word of new possibilities. Actively seek out opportunities to engage a cost-free force that can radically improve the quality of your decision-making.

Rule #16
Encourage and create leaders around you. Dispersed leadership involves many people, which means there is less risk of a single person making a poor strategic choice.

 

 

 

This Is the Number 1 Sign of High Intelligence, According to Jeff Bezos

https://www.inc.com/jessica-stillman/this-is-number-1-sign-of-high-intelligence-according-to-jeff-bezos.html

This is what the Amazon founder looks for when he wants to know if someone is really smart.

Amazon founder Jeff Bezos sits atop one of the most successful companies of our time, not to mention a personal fortune of some $150 billion. I think we can all agree that by any meaningful definition the guy is pretty smart. It’s also obvious he has a talent for surrounding himself with other smart people who can help make his vision reality.

How does he find them? It’s a question he addressed when he stopped by the Basecamp offices a few years ago, the company’s founder, Jason Fried, reports on the Basecamp blog. And the answer Bezos gave was the exact opposite of what most folks would expect.

Smart people are actually wrong a lot.

Most of us, when we want to figure out if someone is smart, ask if the person is frequently right: Do they have correct knowledge about the world and their area of expertise? Do they come up with the right answers when faced with hard problems? Do their predictions turn out to be right?

But Bezos’s counterintuitive strategy isn’t just to look at how often people are right. Instead, he also looks for people who can admit they are wrong and change their opinions often.

Bezos has “observed that the smartest people are constantly revising their understanding, reconsidering a problem they thought they’d already solved. They’re open to new points of view, new information, new ideas, contradictions, and challenges to their own way of thinking,” Fried reports the Amazon boss saying.

“Consistency is the hobgoblin of little minds.”

That willingness to consider new information goes hand in hand with a willingness to admit your old way of thinking was flawed. In other words, to be super smart you have to change your mind a lot. Essayist Ralph Waldo Emerson famously said, “Consistency is the hobgoblin of little minds.” Bezos apparently agrees that consistency is overrated.

“He doesn’t think consistency of thought is a particularly positive trait,” Fried reports. “It’s perfectly healthy – encouraged, even – to have an idea tomorrow that contradicts your idea today.”

It’s not just 19th-century philosophers who agree with Bezos. Modern science does too, although psychologists have a less poetic way of speaking about the flexibility of mind Bezos prizes. They call it intellectual humility. Studies of decision making show that people who are more willing to entertain the idea that they’re wrong make markedly better choices. Being wrong, they understand, isn’t a sign of stupidity. It’s a sign of curiosity, openness to new information, and ultimately smarts. 

If famous essays, top CEOs, and the latest research aren’t enough to convince you that to be smarter, you need to also be frequently wrong, you can also take it from the undoubtedly smart futurists at Palo Alto’s Institute for the Future. According to Stanford professor Bob Sutton, they encapsulate this trait of highly intelligent folks this way:strong opinions, which are weakly held.”

As the futurists explained to Sutton, weakly held (and therefore often changed) opinions are important because they mean you aren’t “too attached to what you believe,” which  “undermines your ability to ‘see’ and ‘hear’ evidence that clashes with your opinions.”

So next time you’re trying to determine if someone is actually super smart or simply bluffing, don’t ask whether they’re always right. Instead, ask when was the last time they changed their opinion. If they can’t name lots of times they were wrong, they’re probably not as smart as they want to appear.

 

 

Tenet Healthcare to slash 1,300 positions to cut $150M in expenses

http://www.fiercehealthcare.com/finance/tenet-healthcare-to-slash-1-300-positions-to-cut-150-million-expenses?mkt_tok=eyJpIjoiT0dRd016STJNVEE1WWpsaiIsInQiOiJqaWRyYjdBcThaN0VWT1JkdFd6TkdvVXEwcUdiZGFHUmRuT2pISG9aVWtlVTByT2diZXdVOThvRnE5b3pQNXlVNDRNdTBtY2NaOW85Y1ErOXpERDRydUNaZHBQT29idXA2RngwYVdhaEtcLzB1TE5MR3VrTFh5VW8zR2xRRElHcmgifQ%3D%3D&mrkid=959610&utm_medium=nl&utm_source=internal

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Tenet Healthcare, which recently went through a management shakeup amid financial losses, plans to eliminate 1,300 positions in order to cut expenses by $150 million.

The Dallas-based healthcare system announced Friday it had begun an “enterprise-wide cost-reduction imitative that would primarily involve job cuts and renegotiation of contracts with suppliers and vendors.”

The majority of the savings will be through actions within the company’s hospital operations, including eliminating regional managers and streamlining overhead and centralized support functions. Job cuts will also take place within the company’s ambulatory care and Conifer business segments.

In total, the company intends to eliminate 1,300 positions or about 1% of its workforce, including contractors, by the end of 2018.

The announcement comes in the wake of the sudden departure of longtime CEO Trevor Fetter, who last week stepped down from the top post and left earlier than planned with a severance package worth nearly $23 million. Reuters also reports that the organization has scrapped its sale plans and is continuing to explore ways to reduce its $15 billion debt.

The news about the layoffs also included the company’s preliminary financial results for the third quarter of 2017. Tenet expects a net loss of $366 million in the third quarter.

Ronald A. Rittenmeyer, who was recently appointed CEO while the organization searches for Fetter’s permanent replacement, said in the announcement that the organization is moving quickly to improve the financials and return for shareholders. The cost-reduction plans include structural changes in the way the organization operates to improve agility and speed decision-making, he said.

“We believe these changes will help us drive organic growth, expand margins, and better support our hospitals and other facilities in delivering higher levels of quality and patient satisfaction,” he said.

Root Out Bias from Your Decision-Making Process

https://hbr.org/2017/03/root-out-bias-from-your-decision-making-process?utm_campaign=hbr&utm_source=facebook&utm_medium=social

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We’ve all experienced the disappointment of an important decision not going our way. The feeling is far worse when you feel that the decision was somehow “rigged” against you — that you never had a chance, that your input wasn’t given its fair due, or that only some of the data was considered. You can accept a fair decision that goes the other way, but a rigged decision feels much worse. And the ill will festers.

Poor decision making happens in our business, civic, and personal lives. But often we are perpetrators, participating in or making rigged decisions, even if we may not realize it.

Rigged decisions are all too frequent, and while they come in many forms, the most virulent feature the following steps:

  1. Make the decision based on some or all of the following: ego, ideology, experience, fear, or consultation with like-minded advisers.
  2. Find data that justifies your decision.
  3. Announce and execute the decision, and defend it to the minimum degree necessary.
  4. Take credit if the decision proves beneficial, and assign blame if not.

 

Procrastination is the Thief of Time

https://www.virgin.com/richard-branson/bad-decision-better-no-decision

Almost all entrepreneurs will acknowledge that success in business comes from timing. So, when you get an opportunity, you’ve got to go for it wholeheartedly, not wait in the wings for some imaginary perfect time to materialise.

There is no such thing as perfect timing or perfect decision making – only hindsight can determine whether or not you’ve made the ‘right call’.  As Marie Beynon Ray said: “Indecision is fatal. It is better to make a wrong decision than build up a habit of indecision. If you’re wallowing in indecision, you certainty can’t act – and action is the basis of success.”