Why is decision-making one of the most, if not the most important task of any manager? And how can proactive decision-making help to influence what really matters? – an expert interview with Prof. Dr Johannes Siebert.
In reality, decision makers spend most of their time assessing alternatives. However, these alternatives may often not even be the best available options. Value-Focused Thinking is an approach that encourages decision makers to first define their values and goals. This allows them to systematically identify more options and better alternatives in a next step. Johannes Siebert described this approach in one of our MORNING_GLORY sessions at Werkstätte Wattens. He provided some simple methods for mastering decisions with substantially less effort. This allows entrepreneurs to achieve much better results for their companies. The large number of participants and the lively discussion following Siebert’s talk demonstrated how relevant this topic really is.
WHAT IS PROACTIVE DECISION-MAKING?
In practice, decision makers tend to spend a relatively small amount of time on identifying obvious alternatives. Then, they invest substantial effort in assessing them. It would be much more effective to ensure that the best available options are considered first. Ralph Keeney (Duke University) has named this backward-oriented and reactive approach alternative-focused. He recommends investing more effort in exploring your goals first and then systematically develop your best possible options. He calls this approach value-focused. For details on this method, check out www.proaktiv-entscheiden.de.
WHY DO PEOPLE FIND IT SO DIFFICULT TO MAKE DECISIONS?
This can be attributed to several reasons. Every decision you make now automatically minimizes your room for future decisions. Say, you’ve put all your savings into investing in a flat. Well, that means you might not be able to invest in another flat because you’ve run out of financial resources. Another key reason is that most of us have never learned systematically to make smart decisions. Many people consider decisions to be “problems that need to be solved”. We usually don’t structure problems clearly. But if we don’t know what we want, we can’t achieve it.
HOW CAN ENTREPRENEURS MAKE SMART DECISIONS?
In research, smart decisions are defined by a high decision quality. A high decision quality can be achieved by systematically identifying relevant goals before a decision is made. Numerous experiments and case studies have shown that goals are usually not properly defined. In fact, many decision makers omit this step altogether. As a result, they are unaware of what their relevant goals are. Furthermore, decision makers need to invest more effort in exploring viable alternatives. It is also essential to clearly describe the effect each option would have on the individual goals. This requires a goal-oriented focus in the information-gathering process. In practice, many entrepreneurs simply try to gather as much information as possible. It would be much more effective to exclusively look for information that is actually relevant to the decision. The company goals can provide orientation in this process.
WHAT MADE YOU RESEARCH DECISION-MAKING?
One of my key personal goals is to contribute something to our society. The way we make decisions provides enormous leverage to improve the quality of our lives as well as the competitive capacity of a company.
A SIMPLE EXAMPLE
One of the first major decisions many young people have to make is: “What am I going to do after school?”. They are generally presented with various options. Frequently, these young people then choose one of the obvious options or an option suggested by another person without thoroughly reflecting on what they personally really want and what their goals are. You might hear a teenager say something like: “My mum’s a doctor, so I’ll study medicine.” or “My dad is an entrepreneur. I’m going to get my major in business administration.” But you might also hear something along the lines of: “My parents don’t have a college degree. I won’t make the same mistake.” Generally, these decisions can objectively be regarded as “reasonable”. On an individual level, however, it is crucial that everybody considers their own interests, desires and conditions.
Before selecting a field of study, young people should stop and ask themselves the key question of whether getting a degree is in sync with their goals and wishes. This is frequently not done. Due to such poorly made career decisions, 28 per cent of all bachelor students dropped out and 25 per cent of all trainee contracts were cancelled in 2015. This clearly has an impact on our economy, spiking education costs and limiting the number of specialists available in the job market. Simultaneously, it can have a severe effect on individual careers as dropping out of school is often considered a dismal failure.
We are currently investigating how to train young people in decision-making in a large-scale research project in Northern Bavaria. We are teaching them to better and proactively make decisions that are crucial to their lives. I find it very fulfilling to receive emails from students after a class I taught in a school or at a university or even much later in which they express how much their life has improved through proactive decision-making. And the same is true for organizations I have consulted. It is fantastic to observe how they successfully develop and grow based on proactive decision-making. Those are important moments. But helping people is really what inspires me most.
WHERE CAN OUR AUDIENCE FIND MORE INFORMATION ON PROACTIVE DECISION-MAKING?
As an introduction to the topic, I suggest reading a short article I co-authored with Prof. von Nitzsch (RWTH Aachen). It illustrates proactive decision-making based on the job selection process of a graduate. I also recommend watching Ralph Keeney.