Good Decision Making in a Crisis

Helping your children with their education during these times is a salutary lesson. I’ve always known that I could never be a teacher, but hadn’t realised just what a gift teachers possess.

Bernard Shaw's line "those who can, do; those who can't, teach" has never seemed so unjust. People have been sharing their experiences of home teaching, with one parent reporting that after the first week the pupils had been suspended and the teacher under investigation for drinking on the job.

It's also proving depressing to learn just how much of my own education I've forgotten. With a degree in Chemistry, I found myself desperately trying to read the GCSE textbook a page in advance of my daughter.

Whilst I seem to have forgotten the vast majority of the things I was once taught, one subject managing to cling on in my declining neural network is Decision Making Science, taught as part of an MBA at London Business School.

Decision Making Science aims to help us all make better decisions.

As the world grapples with Covid 19, good decision making has never been so important.

Watching the UK's scientific advisors in the daily government briefings you can see, so painfully clear, exceptional minds trying to make good decisions. Whether you agree with the decisions they are making, there are aspects of the approach that they are using for decision making that we can all learn from.

The need for data

The most striking thing is the impact that data has on decision making. With data, you make better decisions. The lack of data brings uncertainty, and uncertainty increases the risk of making a decision that proves wrong.

This is a lesson that's really important for those of us managing operations. There's an immediate urge to focus on getting the work done and stop all "non-value" activity such as MIS, planning and capturing data. This is the equivalent of a pilot dealing with an in-flight emergency, deciding to switch off their altimeter and airspeed indicator so they can focus on the immediate crisis at hand.

Not having data will lead to worse decisions. There may be mountains ahead.

Biases and heuristics

As humans our brains are designed to work in certain ways that inhibit our ability to make good decisions. These are often called biases and heuristics. For example, anecdotes (stories) have much more sway on us that data. We like to be right and have made our mind up on something will filter information so that we remember the bits that support our argument and pass over the information that contradicts us (confirmation bias).

To me, it seems that the scientific advisers are very aware of biases and heuristics and through their training take great pains to be on their guard for the effect this may have. Again, a lesson for us all.

Different voices, different views

We have seen numerous scientists providing contradictory opinions on what should and shouldn't be done. As painful as this can be, allowing different voices to be heard and different views to be debated will only lead to better decisions.

Good decision vs good outcome

If you have reviewed the available data, managed to discount your biases, had a healthy and open debate in which a diverse group of people are free to give their opinions, considered alternatives and asked yourself "what's the worst that can happen", then you have done all you can to make a good decision.

The decision may lead to a good or bad outcome, but crucially that does not stop it from being the right decision to have made.

The more good decisions you make, the more good outcomes that you will achieve, but because you rarely have perfect information and stuff happens, good decisions don't guarantee good outcomes. Likewise, a bad decision may lead to a good outcome.

If you decide to take your life savings and put it on black, then that's a bad decision. With the spin of the wheel, the outcome may be good or bad, but that doesn't change the nature of the decision you made.

It has been suggested that we should pay people on the quality of the decisions they make rather than the outcomes they create.

Helping you make good decisions

Over the next few weeks we'll be looking at aspects of decision making including the use of operational data and translating decision to action. We'll also be providing data and insight to help you make the decisions that you now face.

“Stuart has over 28 years of experience of leading change in service operations. His career has spanned project and programme management, strategy, consulting and leading operations divisions and functions. After 17 years with HSBC working in the UK and India, he moved to Abu Dhabi heading operations for ADCB.

Stuart joined ActiveOps in 2016 and leads its Customer Success function.”

Stuart Pugh, Chief Customer Officer, ActiveOps