Far more often than I ever expected, I’m still in the decision-making business as a semi-retired professional. So, I was initially intrigued and then amused by an article in the MIT Sloan Review on a structured approach to strategic decisions. What caught my attention were the authors: Kahneman, Lovallo and Sibony—some really smart guys in the decision-making process. With that kind of backing and world renown authors, the Sloan Review can get your attention to the process as though it’s something really new--a way to avoid biased decisioning.
The process is not new! But it is masterful.
I first borrowed the model from Russo and Schoemaker’s Decision Traps (1989), (later upgraded to Winning Decisions (2002)). There are two differences between Kahneman’s recommendations and those of Russo and Schoemaker. The MIT article focuses on organizational decision making, while R & S focus on individual decision-making. The second difference is that the MIT article lays out more than a dozen pieces of research, dating from as recently as 2017, while R&S worked from far less research...
Of course, Kahneman, et al, building on the new research, add clarity and reframe the issue a bit differently. Anybody in my field of organizational rhetoric will tell you that clarity and reframing are especially useful competencies for selling an idea. And the MIT report does a superb job with these skills.
But, given my orientation to executive coaching rather than organizational coaching, I’ll lay out their three-step process, reframing it back to more individualistic use. And I’ll also provide you with the example of my first use of the process: an experience which I still remember because of its success and my own hilarious response to my beloved wife’s strategic decision.
Step one: Define the key attributes of the objective. In this example, my wife was at the place where she needed a new car and came to me for my help. It was her decision—and she was a fine decision maker. I saw no reason to get involved. But she disagreed, saying that she wanted to make certain she bought the right car and had difficulty figuring out which would resolve her needs. Thinking about it for a minute, I agreed, but asked her to lay out eight or ten needs (attributes) for a new car. She came back a few days later with a list of ten attributes. As I remember, they included security, four-wheel drive, plenty of quick speed, small size—especially for easy parking, comfort, dealership nearby for quick upkeep, smart looking (whatever that meant), effective air conditioning and heating (we live in Minnesota), seat-heater and electric seat adjustments. I looked at the list and suggested she prioritize, focusing on no more than five attributes. I also suggested that more than five could be problematic though I had no data to back up that conclusion.
Early the next week she brought me her list--with prioritized attributes. The first was security. She was very specific, wanting locks that would not automatically open when the car was turned off, leaving her also with the ability to unlock only the left front door if she desired. (She was very security conscious because of the areas in which she was teaching.) The 2nd priority was size: she was slightly over five feet tall and wanted a small car, easy to park on side streets. The 3rd priority was four-wheel drive (Minnesota snow) with "fast get-away." The fourth and fifth were electric seat adjustments and seat-heater (again, Minnesota weather).
Step two: Use fact-based, independent assessments. Given her priorities, I laid out the checklist. Thankfully, by this time in the early nineties, the web was up and there were several sites for auto comparisons so I could simply identify all her necessary attributes. With the exception of the security needs, all the other attributes were in factual form. But the security issue was not clear on any of the sites, so I had to go to three dealerships to make certain a car would meet her security needs. I was glad I did that because only one car—at that time--met her need: the Audi A4.
Step three: Make the final evaluation (decision) only when the assessments are complete. I met her at the Audi dealership after her school job and walked her through her priorities (assessments). Of course, the salesman wanted us to drive the car, handing the keys to me. I handed them back to him, commenting that I wasn’t the customer. That was Marilyn. It being the early nineties, he was a bit taken aback, but then got in the front seat next to her, letting her drive away with me in the back seat.
When we got back to the dealership, she told me she really liked it a lot. Then she looked at the price tag and gasped. You need to understand that my wife was very frugal with a highly analytical half-German heritage. So, the thought of a German car was very appealing. Still, she said, “it’s too expensive.” I pulled out the priority list, took great pains to make a show of looking it over, then showed it to her, and commented that there was nothing about price in her priority list and she got a big smile on her face—while I broke up in laughter. “Negotiate it,” she told me.
She absolutely loved her decision—not least because in today’s language, it was a highly structured strategic decision, covering all the relevant bases. She drove it for years until Alzheimer’s caught up with her. Coming home from a business trip, she told me that she’d gotten lost, just going to the cleaners. I looked at her, very concerned, and said that I couldn’t continue with my business if I had to worry about her driving alone. She said, “let me think about that.” I was up early the next morning, having coffee. She walked over to me, hugged me, and handed me her keys. “Sell it,” she said, “and get on with your business. I don’t want you worrying about me.” It was just another of her highly analytical, well-considered, structured decisions. So, I went on with my business for years, even after she went into memory care. It was a joint, masterful decision.