Our Decisions Need Work
Repurposed from my now-mothballed LLC pages
We know why our decisions suck.
Every decision is a prediction. A guess about the future. And we suck at that.
We were taught how the individual makes decisions — and frankly, we were given bad information. We built entire economic theories using utility functions and rational actor theories, despite knowing we are not rational. Behavioral Economics is a belated realization that sociology tells us more about human decisions than economists. A friend once told me that economics suffered from physics envy, which is why it ignored sociology for several generations.
We were taught how to make decisions in organizations — through a beneficent hierarchy which took the long view while we labored away on the components. And we were lied to. The humans at the top of the pyramid were as human as the rest, and long-range thought scares us all. So we invented process and avoided foresight. We took manufacturing processes and pretended assembly-line efficiencies translate to all human endeavors. Humans became resources. We applied Lean Six Sigma to drive defects down, which served to embed today’s definition of a ‘defect’ deep within corporate processes — and prevent us from being successful tomorrow. (Smaller companies that can’t afford consultants then cropped up to monetize what we were told was a defect.) Now we are told that our Big Data and AI hold the key to making better decisions. What presumption about the future is embedded in those algorithms?
(Hint: Don’t ask Google to show you pictures of unprofessional hairstyles)
Here’s the best part: We are actually very good at predicting. There’s some thought that intelligence is nothing but the ability to predict better than others. Your brain actually doesn’t bother telling “you” when most of your predictions are correct. As you navigate your day, you aren’t aware when stairs appear beneath your feet in the expected intervals and height. The moment your foot fails to hit an expected step, however, is when your brain sends the error to your active consciousness. (This is also why you occasionally don’t recall your commute home — you were focused on a problem at work or with a lover and your brain helpfully drove for you, leaving you to the higher order thinking. Consider that next time you feel like texting on the highway.) We evolved to predict our movement through our environment, to make decisions effectively.
So why do we suck? Perhaps it is because we surround ourselves with processes and functions and incentive schemes based on how we were told things should work. Because business is harder than navigating stairs, we invent all manner of management silliness — believing that people in groups somehow become machines rather than mobs.
This is what motivates me; for my clients, my students, my grandchildren. We need to make better decisions — individually and organizationally. There’s a lot riding on this, and we can do better.
