April 5, 2006

News & Opinion: Prepared Mind World Tour #5 -- Deciding

By: 800-CEO-READ @ 5:50 PM – Filed under: Leadership & Strategy

Greetings to all you Prepared Minds from Bill and Jeanie:
This is the fifth of eight blogs that we will post to give more insights into the skills needed to prepare for your future. Comments are appreciated.
BE PREPARED TO DECIDE: Why do you get paid? Let me be blunt if its not because you have responsibility for making or influencing decisions at your organization, then your job is in big trouble. Its easy to outsource transaction stuff (Why yes, Ill be happy to take your order for ) and its even easy to outsource important knowledge stuff (Was your recent x-ray read by a radiologist in your hospital or in another country?) However, decisions and decision making stays close to home this act of management is too important to outsource (that said, has your organization outsourced key decisions to your local band of consultants? But thats another story.). Get it? You want to be in a position that accepts the risk (and rewards) of decision making.
So where does the Prepared Mind come into play? Well, there are plenty of books that delve into the mechanics and processes of good decision making. They are important, but not enough. If you are going to be prepared for your future, and make good decisions that will bring your organization into the future, you need to consider (as Peter Drucker put it many years ago) the futurity of present decisions. In other words, you need to think about the intended and unintended consequences of todays decisions. Want a couple of examples? Try these:
  • DDT (easier to say than dichlorodiphenyltrichloroethane) was the very first modern pesticide and was widely used in crop protection and for the eradication of malaria-bearing mosquitoes in the 1940s and 1950s. The Swiss inventor was even awarded the Nobel Prize "for his discovery of the high efficiency of DDT as a contact poison against several arthropods." Unfortunately DDT has toxic side effects and caused the death of fish and birds, so it was banned in many countries in the 1970s. Unfortunately, the banning lead to a resurgence of malaria in many tropical countries by the end of the century. Was the widespread use of DDT a good decision? Was the wholesale banning of DDT a good decision? There may have been a better middle ground if scientists and politicians had looked into the future.

  • Lets look at todays dire circumstances with General Motors and consider just one of the many sets of decisions that brought GM to todays condition. The relationships between management and the UAW have been rocky for a long time and both parties bought peace through contract language that provided unsustainable benefits for laid-off and retired workers. Unlike the DDT story, where the decision-makers may not have fully understood the science and biology involved, the long term impact of the contract language with GM and the UAW could have been seen by any good actuary and could have predicted the conditions facing both parties today. (Hmmm, did they?) Maybe the executives twenty-five years ago knew fully well that they were laying the groundwork for a future problem. They just knew it wouldnt happen on their watch.

So what do these simple stories have to do with you and your ability to make decisions? First, be careful when youre dealing with situations that are novel and have yet-to-be-understood consequences. Go back to the skill of Observing and put a system in place to actively watch for early warning signs and be prepared to alter your decision. Second, run the numbers well into the future for decisions that have quantifiable consequences and then use the skill of Challenging to test all assumptions. (Who knows, maybe GM execs in years past thought they made good decisions? It may be that their assumptions were overly optimistic.)
Do you have some stories of unintended consequences? Please share them.
[If you missed the first four Prepared Mind stops, here they are: Observing, Reasoning, Imagining, Challenging]
[UPDATE: The next step of the tour can be found here.]