Knowledge Bite Session - Mark Withers and Anna Withers - Surviving the Squeeze - Better decision making in an age of austerity - PPMA Seminar 2012

Surviving the SqueezeBetter decision making in times of austerity

Mark Withers & Anna WithersMightywaters Consulting Limited

©2012 mightywaters consulting limited www.mightywaters.co.uk [email protected]

http://www.mightywaters.co.uk/

Session Aims

Get you thinking about your challenges within the context of effective decision making

Help you understand inherent biases in decision making

Present a RISK framework to help you surface and explore these biases

Set out a range of interventions that will help you create an environment for more effective decision making

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What can you see ?



Huge organisational challenges

Reduced income

Increased demand for services

PensionsEmployee

Engagement / Morale

Delivery Models

Demanding targets

High customer expectations



Strategic / Tactical Cuts - Where, How and Who?

Efficiency savings - Where and How Radical?

Strategic partnerships - Who and How?

Employee Morale – How to keep people engaged – how to retain talent?

How to deliver more with less?

And lots of them…



Research points to inherent bias in decision making



How situations are perceived by people determines their subsequent actions

strategic insight often fails to materialise because of limitations in the mental models of strategic leaders

the ability to identify and help others discover their mindsets and mental models, and the capability to change these when appropriate, are “among the most critical capabilities an HR professional can have or acquire”.

Jeffrey Pfeffer, 2005



Bias impacts Decisions and creates Risk

DECISIONS

BIAS

RISK



Quotes on Risk


People risk is a major component - some would say THE major component

– of risk management, irrespective of

organisational type and industry sector

Institute of Risk Management

An unbiased appreciation of uncertainty is a cornerstone of rationality — but it isn’t what organizations want. Extreme

uncertainty can be paralyzing and the admission that one is merely

guessing is especially unacceptable when the stakes are high. Acting on pretended knowledge is often the

preferred approach.Daniel Kahneman

(Nobel Prize Winner, 1990)


A new PEOPLE RISK framework

elationships

nterestshortcutsnowledge



Typical biases in decision making


Relationships

Inappropriate attachments

Shortcuts

Confirmation biasChampion biasAvailability biasAnchoring

Knowledge

Misleading experiences

Interest

Sunk cost BiasSunflower-managementGroup thinkOver-optimism


R - Relationships


• Strong bonds / loyalty with a person or sets of people

• Strong associations with an object or symbol


I - Interests

Personal Gain

Personal Reputation

Personal Power



S – Shortcuts

Wrapper• Who presents the

information• How that information is

packaged

AnchorWhat is in the mind before the data is

presented



K – Knowledge

• Misapplication of past learning

• Over-valuing experience



Using RISK to improve decision makingAwareness

Focus on decision making groups / teams /

governance groups:

• Awareness of biases• Development of a People

RISK mindset

Interventions

Make targeted interventions:

• External facilitation of decision making process

• External review• Pre-mortems• Counterpoints• Leadership & team development


Environment

Work to create a culture of mutual accountability:

• Create transparency in decision making processes

• Ensure diversity in decision making team

• Provide psychological safety so that people can speak out

• Bring multiple stakeholder voices into the decision making process


Question time



We hope you have taken at least ONE idea from this presentation



Economy & Finance

Knowledge Bite Session - Mark Withers and Anna Withers - Surviving the Squeeze - Better decision making in an age of austerity - PPMA Seminar 2012