A GENERAL APPROACH

In management there is always a distant tune playing in the background. Once you hear this tune, you will start humming it to yourself: in the shower, in the boardroom, on the way to work, when watching the sunrise. It is a simple tune which repeats again and again in every aspect of your managerial life; if goes:

PLAN - MONITOR - REVIEW

Whenever you have something to do, consider not only the task but first the method. Thus if there is a meeting to decide the marketing slogan for the new product you should initially ignore anything to do with marketing slogans and decide: 1) how should the meeting be held, 2) who can usefully contribute, 3) how will ideas be best generated, 4) what criteria are involved in the decision, 5) is there a better way of achieving the same end, 6) etc. If you resolve these points first, all will be achieved far more smoothly. Many of these decisions do not have a single "right" answer, the point is that they need to have "an" answer so that the task is accomplished efficiently. It is the posing of the questions in the first place which will mark you out as a really great manager - the solutions are available to you through common sense.

Once the questions are posed, you can be creative. For instance, "is there a better way of producing a new slogan?" could be answered by a quick internal competition within the company (answers on a postcard by tomorrow at noon) asking everybody in the company to contribute an idea first. This takes three minutes and a secretary to organise, it provides a quick buzz of excitement throughout the whole company, it refocuses everyone's mind on the new product and so celebrates its success, all staff feel some ownership of the project, and you start the meeting with several ideas either from which to select a winner or to use as triggers for further brainstorming. Thus with a simple -- pause -- from the helter-skelter of getting the next job done, and a moment's reflection, you can expedite the task and build team spirit throughout the entire company.

It is worth stressing the relative importance of the REVIEW. In an ideal world where managers are wise, information is unambiguous and always available, and the changes in life are never abrupt or large; it would be possible for you to sit down and to plan the strategy for your group. Unfortunately, managers are mortals, information is seldom complete and always inaccurate (or too much to assimilate), and the unexpected always arrives inconveniently. The situation is never seen in black and white but merely in a fog of various shades of grey. Your planning thus represents no more than the best guess you can make in the current situation; the review is when you interpret the results to deduce the emerging, successful strategy (which might not be the one you had expected). The review is not merely to fine-tune your plan, it is to evaluate the experiment and to incorporate the new, practical information which you have gathered into the creation of the next step forward; you should be prepared for radical changes.

LEADERSHIP

There is a basic problem with the style of leadership advocated in this article in that nearly every historic "Leader" one can name has had a completely different approach; Machiavelli did not advocate being a caring Protector as a means of becoming a great leader but rather that a Prince ought to be happy with "a reputation for being cruel in order to keep his subjects unified and loyal". Your situation, however, is a little different. You do not have the power to execute, nor even to banish. The workforce is rapidly gaining in sophistication as the world grows more complex. You cannot effectively control through fear, so you must try another route. You could possibly gain compliance and rule your team through edict; but you would lose their input and experience, and gain only the burdens of greater decision making. You do not have the right environment to be a despot; you gain advantage by being a team leader.

A common mistake about the image of a manager is that they must be loud, flamboyant, and a great drinker or golfer or racket player or a great something social to draw people to them. This is wrong. In any company, if you look hard enough, you will find quiet modest people who manager teams with great personal success. If you are quiet and modest, fear not; all you need is to talk clearly to the people who matter (your team) and they will hear you.

The great managers are the ones who challenge the existing complacency and who are prepared to lead their teams forward towards a personal vision. They are the ones who recognise problems, seize opportunities, and create their own future. Ultimately, they are the ones who stop to think where they want to go and then have the shameless audacity to set out.

How We Sometimes Fool Ourselves When Making Decisions

Think back on a decision you made in the past that cost you dearly or caused you considerable pain. Then consider some smaller decision where, in retrospect, you realize a different choice would have saved you time and avoided aggravation. Looking back on the momentous times in our lives, some of our biggest regrets come from faulty decision-making.

What if you found out your mind played tricks on you? That you could have thought things out better and made a wiser choice? Perhaps you were relying on your "gut instincts" but were fooled by the unconscious decision-making traps we fall into when trying to figure out what we should do. According to one of my all-time heroes, negotiations guru Howard Raiffa, we are destined to repeat the same faulty decision-making process and face more grief from the poor results if we don't gain insights into some of these traps.

According to Raiffa, the fault often lies, not in the decision-making process but in the mind of the decision-maker. The way the human brain works can sabotage our decisions. Here are some insights into the most well documented traps we set for ourselves in making decisions.

The Routines of Decision-Making

We use unconscious routines, called heuristics, to cope with the complexity inherent in decision-making. These routines serve us well in most situations. For example, in judging distances, we equate clarity with proximity. The clearer an object appears, the closer we judge it to be. The fuzzier, the farther away we think it is. Like most heuristics, this one is not foolproof. If the day is hazier than usual, our eyes tend to trick our minds into thinking things are more distant than they actually are. For airplane pilots, such a distortion could be catastrophic if they weren't trained to use other truly objective measures and instruments. This decision-making flaw is based on sensory perception, but others are based on biases or on irrational anomalies in our thinking. These anomalies are potentially dangerous because they are invisible to us. They are hardwired into our thinking, so we fail to even recognize we are using them.

In this and the next column, I will describe the most common decision-making traps and what you can do to overcome them.

Anchoring

How would you answer these two questions?
1. Is the population of Turkey greater than 35 million?
2. What's your best estimate of Turkey's population?

If you are like most people, the figure of 35 million in the first question (which researchers chose arbitrarily) influenced your answer to the second question. I've watched the behavioral scientists ask variations of these questions to groups of people many times over the past decade. In half the cases, 35 million was used in the first question; in the other half, 100 million. Without fail, the answers to the second question increase by millions when the larger figure is used as an "anchor" in the first question.

When considering a decision, the mind gives disproportionate weight to the first information it receives. Initial impressions, estimates, or other data anchor subsequent thoughts and judgments. The implications for influencing another's perceptions are mind-boggling and can take many guises. A colleague's comment or a statistic in the morning paper can influence your later decision-making on the same topic. Other guises are as insidious as a stereotype about a person's skin color, clothing, or accent. In business, one of the most frequent "anchors" is a past event or trend. In attempting to project sales of a product for the coming year, a marketer often begins by looking at the sales volumes for past years. This approach tends to put too much weight on past history and not enough weight on other factors.

Because such anchors can establish the terms on which a decision is made, they can be used as a bargaining tactic by savvy negotiators.

Reduce the impact of the effects of anchoring in these ways:

1. Be open minded. Seek information and opinions from a variety of people to widen your frame of reference, without dwelling disproportionately on what you heard first.

2. Offer objective information. In seeking advice from someone else, offer just the facts, without your opinion, so you don't inadvertently anchor the person with your thoughts. Then you can benefit from hearing diverse views on the situation without those views being colored or anchored by yours.

3. Remember this. Whoever most vividly characterizes the situation usually anchors the other's perception of it. That's an immensely powerful ability. Others literally see and discuss the situation while anchored from that most memorably stated perspective. The vivid communicator has literally created the playing field on which the game will be played. Be especially wary of anchors in negotiations. Think through your position before any negotiation begins, so you can avoid being anchored by someone else's proposal or position.

The Status Quo Trap

We instinctively stay with what seems familiar. Thus we look for decisions that involve the least change. For example, when a radically new product is introduced, it is made to look like an existing and familiar product. The first cars looked like horseless carriages. The first online newspapers and magazines had formats much like their print counterparts.

To protect our egos from damage, we avoid changing the status quo, even in the face of early predictions that change will be safer. We look for reasons to do nothing. For example, in one experiment, a group of people were randomly given one of two gifts of approximately the same value -- half received a mug, the other half a large Swiss-chocolate bar. They were told they could easily exchange the gift they received for the other gift. Although you might expect about half to want the exchange, only one in ten actually did. The power of status quo kicked in within minutes of receiving an object. Other experiments have shown that the more choices someone is given, the more pull the status quo has. Why? Because more choices involve more effort, and selecting the status quo avoids that effort.

In business, sins of commission (doing something) tend to be punished much more severely than sins of omission (doing nothing). In all parts of life, people want to avoid rocking the boat.

What can you do? Think first of your goals when preparing to make a decision. Then review how these goals are served by the status quo as compared to a change. Look at each possible change, one at a time, so as not to overwhelm yourself and instinctively want to stay "safe" and unchanged.

Never think of the status quo as your only alternative. Ask yourself whether you would choose the status quo if, in fact, it weren't the status quo.

Avoid the natural tendency to exaggerate the effort or cost or emotional reaction of yourself or others if you change from the status quo.

Remember that the desirability of the status quo might change over time. When considering a change, look at possible future situations. If several alternatives are superior to the status quo, avoid the natural tendency to fall back on the status quo because you are having a hard time choosing among the other alternatives.

The Justify- Past-Actions Trap

The more actions you have already taken on behalf of a choice or direction, the more difficult you will find it to change direction or make a different choice. Whenever you invest time, money, or other resources, or whenever your personal reputation is at stake, you will find it more difficult to change your decision or course of action. Suppose you pour a great deal of time and effort into offering a product to a new niche market. Because you have already used resources to be successful in that market, you will find it difficult to withdraw, even when the market clearly is not interested in your product. If you have a once-close childhood friend who has not been supportive of you for years, you'll be reluctant to acknowledge that change and will likely act as if you are still close. Banks used to continue to lend to businesses that had fallen back on payments, thus throwing good money after bad.

For all decisions with a history, make a conscious effort to set aside your "past actions" -- investments of emotion, money or other resources -- as you consider whether to change direction. Seek out and listen to people who were uninvolved with the earlier decisions. Examine why admitting an earlier mistake distresses you. If the problem lies in your wounded ego, deal with it straight-away. As Warren Buffet once said, "When you find yourself in a hole, the best thing you can do is stop digging."

Don't cultivate a failure-fearing culture in the people around you at home or at work. In such an atmosphere, others will perpetuate mistakes rather than admitting them to you and changing course. When you set an example of admitting mistakes in your choices and self-correcting, others will believe they can do likewise without penalties from you.

In the next issue, I'll describe some other decision-making traps. Although we hope to learn from every mistake, we can't help but long for a faster learning curve so we might continue in a wiser, smoother path through the process of making decisions. I hope your awareness of these traps can help you avoid them in your future decision-making.

A GENERAL APPROACH