Comment on: When Times Are Tough, Do You Make Better Decisions?

When times are tough you are more likely to do something - take some action, make some decision. When times are good, many are content to let things go: not make any tough decisions or any that might upset someone… When in a bind it is accepted that something has to be done, so you can often get past the “we are doing ok, why make us change…” objections.

Similarly it can encourage those to question a decision they don’t agree with (instead of, when times are good, thinking: well I disagree but I will just go along…). So it is possible that in a dysfunctional management system (which is alot of them) it can seem that when times are tough better decisions are made.

In addition, when times are bad any decision might seem good when things improve due to regression to the mean. Peter Scholtes illustrated this with a boss who yelled at his workers when performance become too bad. And his belief that this helped was reinforced as performance improved after the “tough talk.” Of course, the perception of increased performance may not have anything to do with the “tough talk.”

Mainly, I think, when times are tough people are willing to make riskier decisions. Which might very well not be better ones. But those decisions might actually be a bit better than average - if for example we are too cautious (which I think is true in many cases though far from all). “Just stick with what we are doing, it can’t be too bad we have been successful for a long time.” That idea is far too widely accepted.

But the best approach is definitely one that is like Toyota’s. Never be satisfied. Always seek to improve. Do not be complacent. Do not take the easy way out because you can afford to (in good times). Stay ahead of the game. It is not hard to find tons of problems to work on whether you are GM or Toyota. If you have trouble, I can probably help find things that could be improved.

Have the discipline to focus on the problems even when times are good. That is the key. That allows for a much broader range of options (when times are bad certain options are no longer available - for example, when Toyota had to lay off workers…). In general people are less effective under stress (yes some people like to think they perform better under stress, on a deadline… but studies show in general people are more creative, more effective when not under too much stress).

Another key is to examine and improve your ability to use your improvement process (PDSA, A3…). Getting better at it is exactly what making better decisions is about. There are also strategic decisions… but improving your improvement process will go a long way to improving your decision process in general.

Also, Russell Ackoff has some very good ideas on improving decision making. By documenting decision making and evaluating decisions over time to find systemic weaknesses (too cautions, too optimistic, overestimate IT “magic”, underestimate timeframes…) you can then improve. I think it is pretty obvious you can be better if you constantly work at improving decision making instead of just waiting till you are in trouble and then trying really hard to do well.

Related: pay attention to data (analyse the situation and collect data on the effectiveness of your solutions) when possible, but don’t forget that many of the most important figures are unknown and unknowable.