Sunday, November 22, 2015

Week One - Multistage Decision-Making

In any moment of decision, the best thing you can do is the right thing, the next best thing is the wrong thing, and the worst thing you can do is nothing.

Well, it is our first week and I am as usual overwhelmed…not only by the amount of information presented to us in the module, but moreover due to the scientific discussions regarding our decision making processes. I think one thing is for certain, this class is going to continue to provide several "ah-ha" moments as our future assignments unfold.

As I was reading the chapter, I was able to see how many of my daily decisions are made by referring to past experiences, and navigating through recent examples and outcomes which provided either positive or negative feedback to the outcome in which I wish to achieve. In this type of scenario, as our text points out, I am looking for patters to guide me towards more favorable outcomes, or what has shown over a repetitive time to provide optimal results (Hoch, Kunreuther, & Gunther, 2001). But I found it incredibly interesting how our minds work when it comes to making decisions.

For instance, as blonde as it may sound, I never realized how easily decisions can be made when faced with several challenges, by one simple exercise - take your emotions out of the equation - and the answers almost seem deceptively easy. I never considered how much we tend to overcomplicate business decisions, or any decision for that matter, by allowing emotions to influence our entire process (Hoch et al, 2001). I find myself obsessing about this fact now and I feel like I am able to see so many personal and professional areas in entirely different light...by just taking emotion out of the equation.

From the moment I read this over the course of the week, I literally found myself using the practice of it without thinking; my husband was telling me about his day, and already my mind was making a list of all the emotions he was emitting as he spoke. He was explaining how he was really fired up and frustrated about a conference call regarding a potential employee went south. As he began to explain that this potential new employee, whom is also an old work partner and friend, sent an email to the president of the company regarding the salary offer was inadequate considering his current salary was almost $15,000 higher. My husband was incredibly frustrated because he, and others in the company, had already explained numerous times that the sales position had a much higher level of commissioned compensation, as well as the numerous other benefits being offered that his current employer does not extend.
Considering the base salary range had already been discussed prior to the offer being made, and the entire compensation package had been gone over in detail and the prospect said he understood and had no issue, my husband was disappointed that the offer was then not acceptable. He was unnerved not only because multiple people discussed the earning potential would be in excess of $35,000 more in year one, but also because the prospect was agreeable and had already verbally accepted the offer with multiple people; to reach out to the president unknowingly to have the offer re-negotiated seemed unprofessional and uncalled for.

As I listened to him vent, I asked him why he was unhappy; was it because the prospect was a friend, or it was a "done deal" and presented that way to senior management, or because if he was going to hired and report to you and is already playing these types of games, you feel you may have made a mistake in recommending him for the opportunity?

As we talked through the various feelings and emotions that were taking place, I asked him a series of questions which basically came down to a business decision...is he the best person for the job and your team, and if you do not meet his request, would you be able to find an equal or better qualified candidate instead to fill the position at this time?

I explained an alternate point of view by simply pointing out that if the prospect is still the best business decision for you and your team, then handle one part of the equation at a time; get the best person hired at a fair salary to keep business continuity on track. There will always be time to address more appropriate ways in which your team prefers communications in the future and the expected following of the chain of command when concerns arise. Once we took emotion out of the equation, it was much easier to isolate the peripheral noise confusing what the best business decision was for the operational goals of the business – to get this particular prospect hired. It seemed a logical and reasonable solution, as his skill set is what is unique, and in time he can be coached and mentored regarding his communication style versus what is the cultural norm for the business.

Additionally this week, we also touched on the dangers of being myopic; often times in my current leadership position, I do not tend to have a great deal of time to gather and mull over large amounts of financial data in order to base my decisions on. In a perfect world, I would love to have a few days to gather and dig into various ways of slicing and dicing the numbers so I could feel more secure in important decisions that impact my business office and our overall facility, but the reality is that time will never be available to me right when I actually need it. Our fast paced environment often forces me to make knee-jerk decisions based on current experiences. This is because healthcare is a very fast paced and information rich environment. But I am now learning to base them upon repetitive scenarios and post-research reviews as my senior management team prefers consistency in our operations and communications.

What I have been trying to do over the past few months after making a determination regarding our revenue position is go back and evaluate my work and the actual outcome a few weeks later to see if my assumptions are reasonable. That way for the next month end process, I have refined my criteria and evaluated my actions for going forward. If they appear reasonable, there is no reason to modify my current process. If I was too high in my estimations I can be adequately prepared to base my process and current input of information in a more appropriate manner after identifying where I went awry.

Although I do see how it would be appropriate to use Bellman's equation to solve complex linear problems in some respects, I am not at this time feeling that this would be a practical solution for me to learn to become a better forward thinker (Hoch et al, 2001, p. 42). However, I do see after the topics we explored this week that we tend to underestimate the value of the untapped potential in the future.

One of the things I think will stick with me for life was also the video and discussion this week regarding errors in judgment towards forward thinking and estimating value. This week, we came across that there are two types of errors we seem to inherently make; we are underestimating the value and chances of success, as well as the way we tend to calculate odds leads to our failures (Gilbert, 2005). As Gilbert points out, we rationalize our decision making by referencing our past experiences (Gilbert, 2005) versus being able to compare more relevant factors. As our reading this week confirmed, people tend to make emotional trade-offs when confronted with difficult decisions (Hoch et al, 2001, p. 21). Going forward, I think that when attempting to make better decisions as managers, we must remove the emotional and impulsive aspect from our routines to be able to improve decision accuracy, and minimize our efforts and “…negative emotions…” that can often lead to inappropriate decisions in the end (Hoch et al, 2001, p. 29). The tools and exposure this week will no doubt lead us to laying a solid foundation in which to do this.

Overall I think it was a fantastic start to our semester and I have never been more excited about a class and the content presented so far as I have been this week.

Until we blog again!

Gilbert, D. (2005, July). Why we make bad decisions. Retrieved November 17, 2015, from Ted.com: http://www.ted.com/talks/dan_gilbert_researches_happiness#t-375013

Hoch, S. J., Kunreuther, H. C., & Gunther, R. E. (2001). Wharton On Making Decisions. New York: John Wiley & Sons, Inc.

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