We learn from our mistakes

Decision-making in complexity: the time variable

In a complex environment, making effective decisions requires balancing trade-offs, analysing demands and adapting to changing contexts

by Massimo Calì*.

Adobestock

4' min read

4' min read

In a recent article I tried to argue a very hot issue related to managerial decision-making: in complex contexts, i.e. characterised by many interdependent variables linked by non-stable and non-linear relationships, one has to exercise a continuous balance between the different factors of the decision to be made. These are the so-called trade-offs, i.e. the choices between different possible, often mutually exclusive directions. One must therefore be able to take into account all the relationships (between oneself and the parts, and the whole, between the whole and the parts, the parts among themselves, etc.).

Using a common hypothetical managerial situation (how to communicate to the team, in which there are several candidates, the promotion of one of them) I tried to get out of it by suggesting to focus on how many questions it is good to be able to ask oneself before making a decision. And by introducing a minimum classification criterion between the different decision-making modes of each of us: those who are more analytical and thoughtful, and those who are more synthetic and hasty.

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I try to add an axis to the argument: once we have made a decision, we would like it to be final; the more effort and time we put into making it, or the more it worked, the more we would like to be able to recycle it indefinitely in similar problems, or not have to change and update it over time. But no: the changing context typical of complex problems is caused by the 'change of state' of one, some or perhaps all of the relationships between the variables affecting the decision. In the case of the company example: if the person who got the promotion, in the meantime, receives the offer of his or her life's work elsewhere, any decision on how to communicate this to the team cannot fail to take this into account, regardless of how the eventual attempt to retain the colleague will turn out.

How then do we try to manage this additional axis, linked to the changing context? This can also be a factor that we experience as anxious and overwhelming: I have finally made a decision, how long will it last? Like the yoghurt in the fridge, does it have a definite expiry date? Not really, but here too there are at least a couple of things we can do to give ourselves the chance to make a more solid decision and keep it up-to-date as events evolve.

Making the right questions

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As mentioned, the first thing is to ask questions. It is not only a question of quantity, which also exists if only because of the difference between the Ponderati and Sbrigativi. But it is also a question of quality, otherwise the risk is to spend time (which is always little) asking oneself questions that are intellectually stimulating, but sterile from the point of view of the decision to be taken; or to kill oneself with existential doubts of no use, which put the Ponderati even more in crisis and convince the Sbrigativi even more that it is much better to rely on intuition, the flash or chance (so at least it is done quickly). Another key to this is the misconception that it is pointless to prepare, because then the context changes anyway. Might as well do something randomly but quickly, and then see how it goes.

I think it is worth briefly agreeing on the meaning of 'prepare': if the ambition is to study the problem until the ideal solution has been identified, in order to know how best to apply it, then it will not work in a complex context. Because it is planning that goes well in a complicated context, where the relationships between variables are stable and linear (e.g. fixing a broken machine). We can push the idea a little further and say that planning is having all the answers (possible and preferable, in complicated contexts such as fixing broken machinery or solving a recurring technical problem); preparing is instead asking all the questions. In a complex context, essential. Not to have all the answers (impossible) but to have as few surprises as possible along the way, and thus a greater likelihood of finding quick fixes. By asking the right questions, one will have been able to read the context and imagine in advance that what is happening was actually possible; one will therefore be better prepared (precisely) to construct a countermeasure, even if one does not know upstream what it might be.

Identify what is missing

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The second suggestion that can help us stay focused on the evolution of the context is to disabuse our brain of going to look, when we have a problem, how many similar ones we have solved to see if we can reuse any of those solutions ("no use inventing the wheel every time"). It is not easy but it is possible: what is there in the problem I am facing that is different from every other time? How is communicating this promotion to this team different from the others I have handled in decades of experience?

Knowing how to transform our experience from speed in fishing for what is already in our inner database, to speed in fishing for what is missing or different. Which, however, is a behaviour we are much less used to, not out of laziness or ill will, but because of certain precise characteristics of ours as living beings. But this of our characteristics that lead us to certain habits is another matter, which we will delve into in a future episode.

*Partner of Newton SpA

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