The Science of Decision Making
Most people assume that their decision-making outcomes will improve linearly with the amount of information on hand, as well as the amount of time given. In fact, this couldn’t be further from the truth.
Science has shown us that humans are predisposed to cognitive biases; systematic errors in thinking that influence our judgement and cloud our decision-making processes. One example is the ‘Sunk Cost’ fallacy; the idea of continuing along a current path even when new information suggests another path may lead to a better result, given the emotional (and monetary) investment made. Another is based on futurist Ray Amara’s Law, the idea that humans tend to overestimate the effect of a technology in the short run and underestimate its effect in the long run.
If science allows us to understand the problem, then it also gives us a compelling solution. In fact, science has shown that decision-making under uncertainty, lack of complete knowledge and a short timeframe forces us to prioritise on only the most critical information required to make decisions. Through Strategic Urgency™ (see figure), we prioritise the most important actions first and use short, iterative cycles to maximise learning in minimal time. By separating success and failure from our decision-making process and instead focusing on the economic impact of decisions, the by-product of this approach is to democratise the decision-making process, achieve stakeholder buy-in, shorten decision cycles, and as a result, achieve exponential outcomes. The unintended (positive) consequence is a culture of experimentation, with participants embracing failure as a strategic path to success, circumventing the incentives and political dynamics at play within organisations.
The ‘Think Fast, Decide Faster’ model has been used across the public and private sectors government agencies have been able to prioritise decisions and create courses of action from months into days. In the private sector, the methodology has reframed challenges into highly counter intuitive – and highly profitable – new business models.