A632.3.3.RB - Framing Complex Decisions

Kleindorfer (2001) discusses decision-making in complex environments and how “compressed decision time and complexity are swamping the orderly flow of information and authority, characteristic of traditional decision making” (Hoch, Kunreuther, & Gunther, 2001, p. 116).  He also describes three decision-making approaches for dealing with multiple stakeholders within complex environments.  These approaches are specifically put to use when navigating data-rich environments, navigating systemic complexity, and navigating multistakeholder and environmental complexity.  For example, in data-rich environments “managers are using tools such as data mining and data warehousing to harness this avalanche of data in their business decisions” (Hoch et al., 2001, p. 121).  And, while data is an element driving complexity, “interactions across multiple system boundaries surrounding a particular decision context” (Hoch et al., 2001, p. 122) is another factor increasing complexity.  Computer models are being created to navigate systemic complexity and simulate these interactions.  These models are built with three components in mind: “data, the model itself, and some means of optimizing or evaluating alternative decisions in the context of the model” (Hoch et al., 2001, p. 122).  These models have proven to be invaluable to decision-making within complex environments but also have their limitations.  The models are only as good as the information input into them and considering perfect information is not possible, the decision is ultimately left to the decision maker.  The final challenge lies within navigating multistakeholder and environmental complexity.  The interactions of multiple stakeholders increase complexity and therefore “co-opetition” or cooperation amongst competition is a necessary tool required to help synergize such a complex environment.  

Having to navigate multistakeholder and environmental complexity is of particular interest to me because I interact with multiple stakeholders in a complex environment on a daily basis.  I also believe there are many areas to improve within my VA (Veterans Affairs) organization.  My primary goal in changing any VA process would be to implement a bottom-up strategy utilizing the employee stakeholder voice.  Organizations have traditionally been modeled using a top-down structure.  This means the leader, say a CEO for example, is at the top of the organization’s hierarchy making independent decisions to communicate down to the employees.  As with anything, a top-down, or autocratic leadership approach has its advantages and disadvantages.  However, an alternative is to flip the structure upside down and use a bottom-up approach.  The top-down structure has been the only structure used in the VA since its inception.  Nonetheless, Robert McDonald, then Secretary of VA, aimed to change the top-down approach and implement a bottom-up structure a few years ago.  

Fortunately, Robert McDonald had such authority and the bottom-up structure began to be gradually implemented.  The organization began to witness programs established to reach out to everyone in the organization for ideas.  Some ideas received attention and were implemented throughout all VA facilities nationwide.  We began to see the culture shift from an independently operated approach to each facility towards more of a national collaboration to make each facility operate more effectively and efficiently.  Changing to a bottom-up structure had a substantial impact on the organization’s strategy.  For example, Lister (n.d.) suggests “in a top-down strategic management model, ownership or high-level management personnel determine objectives and how the rest of the business will work toward accomplishing those objectives” (para. 2) and input from the bottom is practically nonexistent.  Conversely, strategy within a bottom-up structure becomes more of a collaborative and shared effort of the entire workforce despite the leader having the final decision for implementation.  However, the success of implementing such a bottom-up strategy is based on the assumptions that everyone wants to contribute to solving problems and that management has the ability to listen, summarize, support, and understand (Obolensky, 2014).  

Implementing a bottom-up strategy also has its implications for leadership.  First, a change to the leadership approach must coincide when switching from a top-down to a bottom-up strategy.  A leader who is used to an autocratic leadership style will have to make significant adjustments for a bottom-up structure change.  Additionally, leadership is not found just at the top of an organization, it is occurring throughout the organization.  This is because a bottom-up environment is about all employees having an opportunity to exercise their leadership abilities and to have the freedom to express their creativity.  For example, Lukens (2016) suggests bottom-up leadership provides an advantage “by getting many people’s input, it crowdsources wisdom and information, allowing you to draw on the best ideas that are out there, rather than just dictating a certain task for someone to perform” (para. 5).  To further demonstrate, the article How to Lead When You’re Not the Boss  (2009) discusses how it does not take formal authority to find opportunities to lead and describes some methods to lead when not in charge such as engaging others and providing feedback.

I witnessed a major change within my organization because of the bottom-up structure. Employees felt their ideas and suggestions fell on deaf ears but were now confident their opinions were not only heard but valued.  Additionally, mechanisms were put in place to help all employees facilitate these ideas and suggestions. However, Dr. David Shulkin replaced Robert McDonald as the Secretary of the VA in February 2017.  The organization has not experienced such an emphasis on the bottom-up strategy that Robert McDonald envisioned.  Although there has not been an official announcement as to whether or not Dr. Shulkin wants to revert back to the top-down approach, we as an organization are experiencing less and less of a focus on the voices of the employees.

References:

Hoch, S., Kunreuther, H.,  & Gunther, R. (2001). Wharton on making decisions. Hoboken, NJ: John Wiley & Sons Inc.

How to Lead When You're Not the Boss. (2009). Harvard Management Update, 14(3), 1-2.

Lister, J. (n.d.).  The difference between top down and bottom up strategic management.  Retrieved from http://smallbusiness.chron.com/difference-between-top-down-bottom-up-strategic-management-25957.html

Lukens, M. (2016, February 11).  The false choice between top-down and bottom-up leadership.  Retrieved from https://www.fastcompany.com/3056551/work-smart/the-false-choice-between-top-down-and-bottom-up-leadership

Obolensky, N. (2014). Complex adaptive leadership: embracing paradox and uncertainty (2nd ed.). Farnham, Surrey, UK: Gower.

A632.3.4.RB - Reflections on Decision Making

I’ve heard of frames and framing before reading Chapter 8 of the Wharton text.  Yet, I struggled a bit with challenging myself to actually define both terms.  I think there is a certain abstract quality that prevented me from fully grasping the subject.  The text validated my thought by describing frames as a “stable, coherent cognitive structure” (Hoch, Kunreuther, & Gunther, 2001, p. 134) and provided me a much better understanding of frames and the framing tools to improve decisions.  Hoch, et al., (2001) concluded that “effective leaders challenge old frames, envision bold new ones, and contrast the two very clearly” (p. 155).

Shoemaker and Russo discuss three framing traps that may distort our decisions.  These traps include frame blindness, the illusion of completeness, and overconfidence.  On a positive note, they identify the following steps to combat these traps and take charge of our frames: see the frame by conducting a frame audit, identify and change inadequate frames, and master techniques for reframing.  I have utilized each of these steps throughout out my life.  For example, I conducted a frame audit by understanding the frames of others after recently starting a new position in my organization.  I went from being on the back end of the procurement process as a contract specialist to the front end as an acquisition specialist assisting the end user.  The basic flow of the procurement process starts with the end user submitting necessary documentation to contracting, the requirement gets awarded by contracting, and the contract is closed out upon completion. That is a very oversimplified version and of course, there are a lot of deadlines, challenges, and communication that takes place in the process.  There tends to be an us vs. them mentality and Contracting likes to blame the customer and vice versa.  However, I noticed nobody tried to understand what the other is experiencing or examine the frames of different stakeholders (Hoch et al., 2001).  After all, we are all on the same team.  I see an opportunity in my new position to bridge a gap between Contracting and all stakeholders involved in the acquisition process.  The primary risks will be implementing new processes that everyone embraces and changing the culture.

Another example of using one of the aforementioned steps to avoid framing traps was when I identified and changed inadequate frames by questioning my reference points.  For example, my reference points are the identical positions as mine at other VA facilities.  The good news here is that I have the luxury of choosing my reference points to gauge my success. While other similar programs exist at other VA Medical Centers, I am essentially building a new program how I believe it should be created.  Furthermore, I trust I possess enough self-awareness not to be overconfident and see an opportunity to put together one of the best, if not the best, programs in the VA. The risk with such a complex endeavor is understanding it will take time.

My third example of avoiding framing traps was mastering techniques for reframing by using multiple frames.  I am fortunate to have already built relationships with most departments in my organization.  In the first week in my new position, I thought about placing myself in a new environment to get a better perspective.  I scheduled to sit with two different employees to go through their processes and understand exactly what they do.  In turn, this will provide an opportunity for me to identify and solve problem areas.  However, I must avoid risking the illusion of completeness after solving these problems as “no frame is complete; each one highlights and hides different aspects of the situation at hand” (Hoch, et al., 2001, p. 140).

This exercise has taught me to be balanced in my decision-making process.  I must understand my frame as well as everyone else’s frame, question and challenge reference points, and be confident but not overconfident.  I also learned I need to challenge myself more at how I perceive situations.  For example, Hoch et al., (2001) use the analogy of how managers often “look out at the world through one mental window and fail to notice the views offered by other windows” (p. 139).  This was a powerful illustration and reminded me of looking out different windows of a building in a literal sense.  I could look out the window from the first floor of the building and think I see everything at ground level.  However, when I look out the window from a higher floor, I now see numerous things not visible from the window at ground level.  This clearly demonstrates how I must constantly shift my view for every situation to find optimal solutions.

Reference:

Hoch, S., Kunreuther, H.,  & Gunther, R. (2001). Wharton on making decisions. Hoboken, NJ: John Wiley & Sons Inc.

A632.2.3.RB - Sheena Iyengar: How to Make Choosing Easier

Sheena Iyengar discusses how we become paralyzed to make a decision when faced with too many options.  She presented four strategies to assist us in overcoming what some may call analysis paralysis; when we become so overwhelmed by so many options that we can’t make a decision in fear of selecting the wrong choice.  These strategies include cut, concretization, categorization, and condition for complexity.

Cut: Getting rid of the extraneous redundant options to improve the choosing experience is the focus of cutting.  Iyengar illustrates this method by applying it to a business example when employees cannot make the distinction between available choices than neither can the consumer.  If this is the case, then it is time to cut those choices as an option to a consumer.   

Concretization: This strategy brings the consequences associated with a choice forward in a way the impact of the choice can be felt.  For example, people spend more money when using a credit card as opposed to real money because the card doesn’t feel like real money.

Categorization: This technique involves categorizing all the options available because “we can handle more categories than we can handle choices” (Iyengar, 2011, 11:36).  

Condition for Complexity:  Sometimes we are faced with very complex decisions.  We can simplify the decision-making process if we gradually increase the complexity.  For example, going from low choices to high choices provides the same information and number of available choices, but simplifies the choices by changing the order it is presented.

Sometimes I feel overwhelmed with the amount of responsibilities and necessary decisions associated with all the responsibilities.  I feel like I need to accomplish everything and it needs to be instant.  However, I think if I make use of the “cut” technique Iyengar presented, I can lessen the burden I more than likely and unnecessarily place on myself.  For example, some of the things I believe I need to do can either be delayed or simply cut from my “to do” list.  Granted, some may view this as prioritizing what is necessary and what isn’t, but if it falls to the bottom of the priority list than I’m thinking it can be cut from it altogether.  This will allow me to reduce stress and provide a better ability to focus on my highest priorities.  

I can utilize concretization in my professional life to improve my decision-making ability.  I am a Contract Specialist for the Veterans Affairs (VA) who procures medical supplies and equipment for multiple VA Medical Centers.  Although I work very hard and am passionate about completing my tasks, I believe there is always room for improvement.  My office is not located in the hospital and distances me from being exposed to the patients and clinical settings.  I think if I take a walk through the hospital once a week, it can serve as a reminder as to why I am procuring the items and who it is impacting.  This will allow me to better feel the impact of what I am doing on a daily basis.

An additional way to improve my decision-making process is to use a Decision Support System (DSS).  This tool would primarily assist me in making decisions at work.  While these systems can greatly optimize my results, I have to also understand that Decision Support Systems should be utilized as a complementary tool to human intuition because “experts excel where models fail, and vice versa” (Hoch, Kunreuther, & Gunther, 2001, p. 88).  

References

Iyengar, S. (2011, November).  How to make choosing easier.  Retrieved from https://www.ted.com/talks/sheena_iyengar_choosing_what_to_choose#t-598990

Hoch, S., Kunreuther, H.,  & Gunther, R. (2001). Wharton on making decisions. Hoboken, NJ: John Wiley & Sons Inc.

A632.1.4.RB - Multistage Decision-Making

I have often heard people say, “I’m a thinker” when discussing having to make a decision.  I can relate, as I would label myself as one who routinely experiences paralyzation through analyzation in my decision-making process.  I tend to think about the many possibilities that could potentially result from a single decision.  Even worse, I precede every option or choice I can think of with “what if…” to ensure I can analyze the impact and the pros and cons of each.  I don’t like surprises when it comes to what could happen from my decisions, so I make every attempt to be prepared.  My way of thinking has its advantages and disadvantages.  On one hand, I am very thorough and have a keen ability to identify potential outcomes.  On the other hand, all my analyzation can prevent me from making decisions quickly.  

People are faced with decisions every day dealing with their family, friends, careers, themselves, strangers, and everything and everyone else in between.  Simply getting out of bed in the morning involves making a decision.  Even not making a decision is, well, technically a decision.  Most people usually do everything they can in their power to make the best decision possible which may include predicting the future result of today’s decision.  Predicting the future is difficult in and of itself but becomes even more challenging when trying to solve dynamic decision problems.  However, Hoch, Kunreuther, and Gunther (2001) provide an analysis to help in the decision-making process and create an optimal outcome.  They discuss how researchers use dynamic programming to solve multistage decision problems using mathematics.  And while useful to researchers who can obtain values for their formulas, it is not always effective, especially when information within multistage decision problems cannot be determined.

The foundations of optimal dynamic programming solutions are complete forward planning and optimal learning (Hoch, Kunreuther, & Gunther, 2001).  In other words, forward planning is when we try to predict the future by investigating all possible choices and outcomes and optimal learning is utilizing past information to update present beliefs and future predictions.  I believe most people engage in each of these intuitive assumptions to some degree.  And while I think these assumptions are part of our human nature and help us navigate our decisions, Hoch et al. (2001) believe they are also problematic since “we have limited abilities to anticipate the future, we are poor at learning from the past, and even our perceptions of the present are distorted” (p. 49). Despite this grim deduction, people still manage to make good and sometimes even optimal decisions.  This occurs because we are able to find the optimal answers through life experiences, decision environments are forgiving of mistakes, and are capable of learning via trial and error.

We were not created to be perfect and Hoch et al. (2001) validate that while there are methods to assist us in the decision-making process, no approach can consistently guarantee a perfect outcome.  Additionally, Hoch et al. (2001) recognize that “the study of dynamic decision problems is littered with contradictions and paradoxes” (p. 57).  Hoch et al. (2001) also suggest there is a lack of evidence that intuition routinely fails when making decisions and “we routinely face and resolve dynamic decision tasks, often with great apparent success” (p. 57).    This is comforting because their findings lead me to accept my own decision-making ability in how I consciously or unconsciously employ intuition, experience, and trial and error.  

Reference:

Hoch, S., Kunreuther, H.,  & Gunther, R. (2001). Wharton on making decisions. Hoboken, NJ: John Wiley & Sons Inc.