MindShift

INSIGHT – TRANSFORMATION – LEADERSHIP


Leave a comment

Decision Making: Risk vs Uncertainty

The trouble with decision making (DM) as a topic is its complex character which is doesn’t lend itself well to unpack it in a linear mode. So I won’t, and even won’t follow the (seemingly linear) steps laid down as a baseline in one of the first blogs but coming back to them later. For as soon as we want to dive further into our process, we have to determine first which domain we are finding ourselves in. An ordered domain or a complex one?

To begin with, most people seem to conflate #risk with #uncertainty. Risk is mapped to the ordered/complicated domain and can be calculated. Whether that is the probability of winning or losing at the casino, or the risks of flying an airplane under normal conditions. With uncertainty, all bets are off. The outcome cannot be known or calculated. Both conditions require very different approaches to decision making. The best decision under risk is not the best decision under uncertainty.

Interesting added dimension: DM researcher @Gerd Gigerenzer states that with high uncertainty, meaning: unstable conditions, only a few data available but many variables, experienced experts do better relying on their (trained!) #intuition or simple #heuristics rather than trusting complicated algorithms and calculation models as DM support. Novices should instead train their intuition first before relying on it. And for anything that can be calculated (risk), algorithms can help. Most DM researchers argue for a good mix of the use of intuition and formal decision making support.

Both domains, risk and uncertainty harbour more layers of difficulties for decision making. Gigerenzer states that most people don’t have a natural understanding of probabilities expressed in percentages. His research shows for example, that a shockingly high number of medical doctors don’t understand their own statistical data in test results or risks. As a most infamous example he mentions a UK press conference about pharmaceutical drug safety where an announcement scared tens of thousands of women into ceasing to take the new generation anti baby pill: They stated a thrombosis risk of 100% (!) against the first generation pills. But 100% of what? The real (relative) data that wasn’t released at first stated that of every 7000 women, the first-generation pill showed 1 case of thrombosis, the 3rd generation showed 2 women out of 7000 with thrombosis. From 1 to 2 an increase of 100%; correct and misleading.

Another trap is lurking for intuitive decision makers. Usually they can’t explain their intuitions and hunches, as tacit knowledge can’t really be explained. In some areas where mistakes tend to be punished (hospitals) rather than being used to learn (aviation), most often this leads to defensive decision making. Experts tend to go against their better judgement (intuition) and choose or recommend inferior solutions that won’t get them either fired or sued. According to Gigerenzer, far over 90% of medical doctors in the USA prescribe medicines for protective reasons not for clinical reasons. Protection against the patient. With detrimental consequences for the whole industry and the people in it (#fagilistas). 

Sources:
Gerd Gigerenzer (2014):“Risk Savvy: How to Make Good Decisions”. Penguin Books ; Gerd Gigerenzer (2008):“Gut Feelings: the Intelligence of the Unconscious”, Penguin Books

Photo by Carl Raw on Unsplash


2 Comments

Black Box: How do we make decisions?

With the amount of decisions that we make every day, it is astonishing that the process of making decisions is not well understood. So how do we make the best choice?

The very act of deciding seems a bit like the proverbial piece of soap in the bathtub: the more you want to get a grip on it the more it slips away. Much is written today about VUCA conditions, and decision making in complex adaptive spaces with highly uncertain outcomes, volatile ingredients and complex relationships are a different animal all together to deal with. We run an Adaptive Leadership training some time ago with top level leaders from the wider UNO network. We wanted to test if their complexity of thinking was matching the complexity of their jobs and run a Decision Making Assessment (LDMA; from Lectica). These leaders were presented with an ill-structured dilemma (no right or wrong solution) to which they had to come up with ways of responding and deciding and their reasoning. When asked about to portrait decision making process in a way that it could be followed or repeated by others, much to our surprise most came up with a list of action rather than some decision making process. That made us even more curious. We ventured more into this terrain.

The weird thing is that even in ‘normal’ conditions people are not aware of how they make choices. Some people pose their questions attentively, gather relevant information superbly and then “wing” it with the actual act of deciding. And then come up with a perfect explanation in hindsight.

So, starting to establish a baseline around decision making, let’s consider basic steps, drawing on the Lectical Decision Making Assessment and Russo & Schoemaker (Winning Decisions):

  1. Framing: the general goal of the decision maker including the way they think about the knowledge upon which they base their decision
  2. A realistic approach to gathering intelligence
  3. Coming to Conclusions: organising and analysing the information and a way to coordinate different perspectives (weighing)
  4. An approach to communicating and implementing the decision made
  5. Learning from Experience, including a way to measure the decision’s effectiveness so adjustments can be made

In the next blog snippet, I will elaborate a bit more on the single steps, each provides rich ground for further exploration.

Outlook: In some next blogs I intend to bring in more and more layers of decision making, exploring input from different topics, authors, influenzers  and frameworks: Dave Snowden, Gary Klein, Bonnitta Roy, Gerd Gigerenzer, Andy Clarke; Lectica.org; concepts/models/ methods: Framing, Cognitive Biases; Intuition; Sensemaking; Cynefin Framework, OODA Loop, Risk vs. Uncertainty, Heuristics, Constraints, Learning, Failure, Innovation, Theory of Change


1 Comment >

Impressions from the workshop with Bonnitta Roy from APP Associates, Alderlore Insight Center, USA, Ct.; April 1 – 3, 2016

With fantastic people from all over Europe (and some US) we spent 3 fun intensive days looking into a kind of organizational development that deals with self-organization, elegant architectures and those principles that foster emergent behavior, team intelligence, distributive power and decision-making – without rigid new governance models. We explored and examined the key principles, central practices and deep processes of open authentic participation in organizational life.

These were some of  our other topics:

  • succeeding with uncertainty
  • how self organization happens and why we can trust it
  • how values both enable and constrain participation
  • expanding our trust network
  • intention, identity and interaction in group dynamics
  • asymmetric needs and power relations
  • strategic conversations in four languages of change
  • participatory governance
  • how resource allocations drive innovation (or not)
  • assessing team action-potentials
  • building team synergy and high velocity performance
  • method-free facilitation
  • catalyzing insight in teams
  • creativity and cognitive flow
 

Continue reading


1 Comment

Integral Leadership: Feeling into the Moment

How does it fit together: intuition, integrity, leadership, (construct) awareness, subtle states? Here is the attempt of an architecture. Presentation at the Integral Theory Conference, San Francisco,  July 18 -21, 2013 

integral leadership caspari

Academic Paper download here: Reams & Caspari_ITC2013

Powerpoint: ITC California 2013 Reams Caspari


Leave a comment

Taking on the Future: Transformation in a Changing Climate

Workshop on Transformative Leadership in a Changing Climate, Saturday 22 June, 2013, Oslo 

If we see transformative change as a necessary response to global climate change, we have to know its processes intimately. Transformations that respond to adaptive challenges involve fundamental shifts in perspective and meaning. In order to be able to design, catalyze, foster or lead such shifts, leaders need to recognize stages, depth and width of the process, identify patterns of systemic pushback, and know what to do with immunities to change, as well as how to handle the usual resistances and escape mechanisms.

For those who are interested in learning more about leadership for change, we offer a one-day intensive workshop directly following the international conference on  “Transformation in a Changing Climate” at the University of Oslo . Continue reading


Leave a comment

Transformative Workshop January 12/13 2013 in Oslo

Transformative Leadership Workshop –  Taking on the Future: Global Transformation, up-close and personal 
“Where the rubber hits the road”
January 11, 2013, 13.00-16.00, Georg Sverdups Hus, Auditorium 2, University of Oslo Followed by a two-day workshop on personal transformation, January 12-13 Continue reading