Why Some Decisions Are Harder Than Others

Jonathan Farrington
 


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While some decisions are easy (what to eat for supper) many more are extremely hard. Usually, a hard decision involves greater consequences/implications or, in some cases, a higher level of resource commitment.

In reality, not all so-called hard decisions are hard. Some feel harder than others owing to scale:

  • If a friend asks to borrow £5 you’re likely to oblige without thinking about it

  • If that friend asks to borrow £1,000 you’re likely to be circumspect and ask questions

    The decision is the same one in essence – concerning creditworthiness. But, where the amount is greater, we perceive the decision to be much harder because the consequences are greater. Who cares about £5? But, £1,000 is a sum most people would not wish to lose. It represents a risk, but at what stage does the decision become hard - £6, £25, more? The risk is that the friend might not or cannot repay the money and therefore, you might regret your decision. Your decision will be based on your consideration of the risk and the magnitude of the possible loss, although you might not see it in this way.

    Defining Hard Decisions

    We can define a decision as having ‘hard’ characteristics when:

  • The situation is uncertain – i. e. there is a greater perceived risk

    And also when:

  • The situation is inherently complex with many different issues – e. g. the siting of a new airport is immensely complex, especially in these environmentally-aware times, because of the factors that must be taken into consideration (flight paths, air traffic control slots, residents, communications links, etc)

  • There are several objectives but one or more is blocked and compromises or trade-offs are needed

  • Different perspectives can lead to different conclusions – especially true where two or more people are involved in making a decision; they may disagree about the assumptions, probable outcomes or, even, the decision

    The key issue is how to handle hard decisions to ensure they are taken as painlessly as possible. This requires the use of a robust, consistent approach and an appropriate level of detail – essential to ensure that risk is minimised or, at least, understood.

    Benefits Of The Right Approach

    A robust, consistent approach to decision-making, together with the required supporting analysis, will:

  • Deal with complexities by providing a structure within which the issues can be organised (human beings have real problems dealing with five or more variables)

  • Identify uncertainty and then present this in a structured and helpful manner

  • Deal with a multiplicity of objectives and trade-offs

  • Analysis different perspectives and facilitate logical presentation, in order to obtain consensus/decisions, especially where several opinions are present

  • Encourage flexibility to change as circumstances alter and which may invalidate or fundamentally alter the appropriateness of the decision

  • Provide an ‘audit trail’ demonstrating how the decision was reached, what was considered, who was involved, etc (very useful when things go wrong and ‘regret’ is considered)

    And Finally: Some Decision-Making Errors

    Research has identified a few very common errors or points to watch out for when making decisions, in particular:

  • Haste – not to be confused with speed. A decision is made before the facts are available or without taking the facts into account. Decide in haste – regret at leisure.

  • Narrow perspective – either in the decision itself or, more commonly, in the understanding of the issue and facts.

  • Over-confidence – either in the decision itself or, more commonly, in the understanding of the issue and facts.

  • Rules-of-thumb – relying on rough frameworks or shortcuts for important decisions instead of carrying out adequate analysis.

  • Filtering – screening out unpleasant findings or those that do not support pre-conceived notions or the decision you want to make.

  • Juggling – lack of analytical framework and, therefore, trying to manage many variables or pieces of information in your head.

    A proper framework helps obviate these problems

    Copyright © 2006 Jonathan Farrington. All rights reserved

    Jonathan Farrington is the Managing Partner of The jfa Group . To find out more about the author or to subscribe to his newsletter for dedicated business professionals, visit: http://www.jonathanfarrington.com

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