What’s a debacle? According to Paul Nutt, it’s “…merely a botched decision that attracts attention and gets a public airing.” Nutt goes on to write that his “…research shows that half of the decisions made in business and related organizations fail.” Actually, it may be higher because, “failed decisions that avoid a public airing are apt to be covered up.”
Remember that I wrote not long ago (click here) that perhaps 70% of change management efforts fail? Now we learn that half — or more — of all business decisions fail. We’re not doing so well. Nutt has studied over 400 debacles — botched decisions that became public disasters — and has created an anatomy of why and how they happen. Nutt’s book, Why Decisions Fail, is a sobering look at how we manage our organizations and, more specifically, our decisions.
Critical thinking should help us avoid botched decisions and public debacles. I’ll be writing about critical thinking over the next several months and, from time to time, will pull ideas from Nutt’s book. Today, let’s set the stage by looking at the basics. Nutt writes that blunders happen because of three broad reasons:
Nutt also criticizes contingency theory — the idea that your situation dictates your tactics. For instance, if you’re faced with a community boycott, you should do X; if you’re faced with cost overruns, you should do Y. Nutt concludes that, “Best practices can be followed regardless of the decision to be made or the circumstances surrounding it.” The bulk of his book outlines what those best practices are.
Of course, there’s a lot more to it. I’ll outline the highlights in future posts and put Nutt’s findings in the general context of critical thinking. I hope you’ll follow along. In the meantime, don’t make any premature commitments.
Can we think with our thumbs? Well, metaphorically we do. When we use System 1 — our fast, automatic, energy-efficient thinking system — we use heuristics, shortcuts to get to an answer that is “good enough”. We often refer to heuristics as rules of thumb — rough and ready ways to deal with reality. (For a comparison of System 1 versus System 2, click here).
Our rules of thumb work most of the time but not all of the time. Psychologists have classified 17 different errors that we make when we use System 1. Let’s look at three today.
Satisficing and temporizing are two errors that often go hand in hand. Satisficing simply means that when we find a choice that’s good enough, we take it and don’t search any farther. (The definition of “good enough” is entirely up to you.) Defense lawyers regularly accuse the police of satsificing. The accusation goes something like this: “You found my client and decided that he committed the crime. You stopped looking for any other suspects. You let the real criminal get away.”
Temporizing is similar to satisficing but adds a time dimension. You’re temporizing when you choose an option that’s good enough for now. How much education do you need? Well, let’s say that you can get a good job immediately with only a Bachelor’s degree. It’s good enough for now. But, 20 years from now you may not be able to get the promotion you want because you don’t have a Master’s degree. You may regret that you temporized in your younger years.
If you ever hear someone say, “if it ain’t broke, don’t fix it” you may well conclude that they’re either satisficing or temporizing. Whatever “it” is, it’s good enough for now.
Availability is another error category that we encounter often. When we’re asked a difficult question, we often search our memory banks for cases that would help us develop an answer. If we can recall cases easily, we tend to overestimate the probability that the same phenomenon will occur again. In other words, if the cases are readily available (to our memory), we tend to exaggerate their probability. This is especially true with vivid memories. This is one reason that people tend to overestimate the crime rate in their communities. Recent crimes are readily recalled — you read about them in the papers every day. Gruesome crimes create vivid memories — thus, many people think that gruesome crimes occur far more frequently than they do.
Available memories don’t have to be recent. In fact, vivid memories can last for years and affect our judgment and behavior in subtle ways. Indeed, I still go easy on tequila because of vivid memories from college days.
Satsificing, temporizing, and availability are three rules of thumb that help us get through the day. They’re part of System 1 which we can’t turn off, so we’re always vulnerable to these types of errors. In general, the benefits of System 1 outweigh the costs but you should be aware of the costs. If the costs are getting out of hand, it’s time to switch on System 2.