Effective Decision-Making at Work

Last week, I covered Personal Decision-making. I had first intended to write about decision-making in general, but as I was writing, I realized it was going to be too long. So I am continuing this week with a post focused only on making effective decisions at work.

What's the theory behind?

Plan to overcome your biases. You probably know by now that our decision-making process is filled with biases. However, I want to highlight three important concepts to consider when making decisions at work:

Groupthink happens when people try to avoid conflict by prioritizing consensus or going with the least disruptive option. At work, this usually leads the majority to agree with those with the most tenure or highest level, virtually silencing some voices, and resulting in a biased outcome.

"The paradox of Choice" refers to how providing more choices can actually lead to worse decisions. In his book, Barry Schwartz shows how too many choices can cause decision paralysis, anxiety, and overall dissatisfaction. Limiting available options reducing the anxiety from excessive choices. At work, simplifying choices is an art of balance - presenting too few may seem like you haven't fully explored the problem, while too many suggests a lack of focused thinking (I know, it’s hard to do, right?).

Jeff Bezos' concept of two-way door and one-way door decisions differentiates between reversible (two-way door) and irreversible (one-way door) choices. At Amazon, people are encouraged to turn one-way into two-way doors to move fast without major consequences if things fail. This aligns with James Clear's analogy of decisions being “hats, haircuts, or tattoos,” with increasing costs for mistakes. 

How to make effective decisions at work?

1. Clearly outline the objective and define potential alternatives

   1. Narrow your choices down to approx. 3: If you don't want to risk looking like you haven’t explored enough, add more alternatives in the appendix.

   2. Do a Pre-mortem: List pros/cons for each option and the worst-case scenario.

2. Get buy-in from key stakeholders before the final approver. I know it will take time, but it is best to gather unbiased feedback and avoid groupthink.

3. Turn your decision into a two-way door by reducing risks. For instance, frame your proposal as a series of experiments. Then, push the final decision date and make the decision around what you’ll test (famous Bezos question: "When is the latest we can make this decision?")

4. Set clear success criteria upfront. Do this before you get attached to a particular alternative.

5. Bonus: Use a decision-making framework. Two I like:

   1. SPADE: Setting, People, Alternatives, Decide, and Explain. Here is a real life example.

   2. DECIDE: Define the problem by taking a step backwards first, Establish the criteria that will determine success, Consider Alternatives, Identify the best alternative, Develop and implement a plan of action with deadlines, and Evaluate the solution)

My personal thoughts

It has happened to me multiple times that when deciding among options, we end up deciding for a “Frankenstein” version of various ones. Now, I create this merged version proactively as a 4th option.

Embrace uncertainty (the famous "unknown-unknowns") by adding buffer time to your plan. Account for the fact that there will be unforeseen obstacles.

Decisively,

Jorge Luis Pando

"The key to good decision making is not knowledge. It is understanding. We are swimming in the former. We are desperately lacking in the latter." - Malcolm Gladwell

PS: I was really happy to discover the SPADE and DECIDE frameworks as they're aligned to my mental model... I think being validated by acronyms is awesome.