How companies and teams make decisions can be very challenging. Poor or ill-structured decision-making processes can make the organization less successful and create destructive conflicts in decision-making teams. But there are a few strategies companies can try that help organizations make big decisions in a better way.
People operate in complex and dynamic environments, making decisions with limited information under conditions of uncertainty and ambiguity. In contrast to routine decisions, strategic decisions are often made at top-management level and they have an impact on the whole organization in terms of its future direction and the scope of its activities. Such important decisions have a significant impact of the organization’s resource allocation that require trade-offs between alternatives and the setting of organizational priorities. In addition the strategic decision making process rarely results in one clear best solution to the problem, but an organization makes a decision it will be difficult to reverse. This is because the implementation of a decision involves a significant resource commitment and change in organizational activities.
Although we have ways to assess risk through probability theory, dealing with strategic decision problems is much more difficult where the information we gather to support a decision and the actual decision outcomes are uncertain and ambiguous.
In complex decision situations, groups are better at solving problems than acting alone. This may be because group members bring a variety of information, critical judgment, solution strategies, and a wide range of perspectives to the decision problem. However, groups can be subject to destructive conflict and cognitive biases that may hinder the quality of decision outcomes and group members’ decision acceptance.
The main group decision-making biases are risky shift, as groups tend to make risker decisions than individuals alone, and groupthink, as group members strive for consensus and harmony in their decision-making. In addition, group conflict may arise when people with competing opinions and solution alternatives clash. Group decision-making, therefore, presents a managerial conundrum. On the one hand, multiple perspectives of group members can add insight into the problem situation. On the other hand, group diversity can produce fragmentation, conflict, or groupthink.
Group member interaction in decision-making situations may produce two types of conflict: cognitive and affective conflict. Task-focused cognitive conflict arises when group members focus on a task or an issue and debate to come up with a creative solution. Cognitive conflict improves decision-making quality as the goal of the decision-makers is to find the best possible solution rather than win the argument. However, there is a danger that this beneficial cognitive conflict spills into a dysfunctional, affective conflict. Instead of working constructively to achieve the best possible solution, the debate becomes personal, adversarial, and a lose-win paradigm where one view prevails while others are discarded.
Affective conflict tends to be emotional and focuses on personal incompatibilities or disputes. These disputes can result from group members’ personal judgments that they are not fully able to explain to group members. The more these personal judgments influence decisions, the more there is potential for decision-making group members to speculate and find reasons to distrust the motivation and hidden agendas of other group members. Hence, too much affective conflict may hinder overall group performance as the decision will not be accepted by some decision-making group members regardless of the quality of the decision outcome.
Management consultants have developed several decision-making techniques to encourage critical interaction between decision-making group members. Devil’s advocacy is a decision-making technique where one or more people in the group works to point out all the flaws and risks with an option under consideration. Dialectical inquiry is a decision-making technique where divide into two camps: those advocating for an idea and those advocating against it. Both sides highlight the advantages of their assigned decision and outline the disadvantages of the opposing idea.
Both dialectical inquiry and devil’s advocacy lead to higher quality assumptions and decision outcomes than a consensus approach in decision-making. However, consensus-seeking groups express more satisfaction and desire to continue to work with their groups and indicate a greater level of decision acceptance than those who were asked to apply dialectical inquiry and devil’s advocacy in their groups’ decision-making process. Hence, management scholars’ attention has turned to developing techniques that maintain moderate levels of cognitive conflict to ensure high quality decision outcomes, but simultaneously preserve group cohesion to prevent emergence of affective conflict.
Causal mapping is a visual decision-making technique that is designed to help groups improve their strategic decision-making processes and promote cognitive conflict, while at the same time preventing the emergence of affective conflict. Visual tools are particularly useful in strategy work as decisions are often made collectively in group working situations.
In a causal map, ideas are causally linked to one another through the use of arrows and nodes. The arrows indicate how one idea or action leads to another. In effect, the maps are word-and-arrow diagrams where the arrows mean “might cause,” “might lead to,” or “might result in.” Causal mapping facilitates a visual articulation of a large number of ideas, actions, and their consequences.
An example of a fully developed causal map is depicted in below. The map incorporates the collective understanding of a decision-problem by a decision-making group.
Causal maps that have been created in groups bring together the thinking of many people, including conflicting views, subtly different slants on the same issues, and different perspectives held by individual people. Such causal maps provide simplified representations of the beliefs of the greater group.
Group causal mapping could be perceived as a form of brainstorming, but there is a distinction between group maps and a free-flowing brainstorming of ideas. Group mapping that is used for decision-making is focused on raising issues and concerns. These are usually activities or events that can either support or challenge the decision-making aspiration of the group. In contrast to eliciting “off-the-wall” ideas in group brainstorming sessions as the means of unleashing creativity, group mapping focuses on bringing together the group members’ current wisdom and experience, as well as issues surrounding the problem. Therefore, group mapping is a process of engaging in a dialogue to uncover the causality between the problem and a number of potential solution outcomes, represented as a visual object. The mapping process provides the means for the decision-making group to structure and merge differing perspectives that should lead eventually into a shared understanding of the issue in a holistic manner.
There is increasing evidence that the causal mapping process prevents decision-making groups from talking over each other and going around in circles. It helps group members to speak and be heard. The mapping process produces a lot of ideas and can ultimately clarify the most suitable course of action. Furthermore, the shared and collective enactment of a group causal map can increase individual ownership, acceptance, and the feeling of fairness of the decision outcomes. This is because the map shows evidence that people have listened to everyone in the group.
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Stickies on a wall? Really? I always use that as a good example of how NOT to make group decisions. It’s always leads to circular discussions and capitualtion rather than consensus.
Many thanks for your comment. I am not certain of the types of decision you refer to in your post. However, cognitive, causal, mapping is a proven technique for decision-makers to make sense of ‘radical uncertainty’ that results from ever-changing, uncertain, and ambiguous environments. The concept of ‘radical uncertainty’ was first advanced by John Maynard Keynes and Frank Knight who made a distinction between risk which could be quantified with probability calculations and real uncertainty that is unquantifiable. Instead of trying to produce probability calculations to fill the unknown gaps in our knowledge, we should embrace uncertainty by adopting robust and resilient strategies and narratives to consider alternative futures and deal with unpredictable events. Decision-making under ‘radical uncertainty’ requires a wide range of skills that can rarely be found in a single individual. Successful decision-making under such conditions is a result of collaborative processes, collective intelligence, and judgment that can be visualized in cognitive maps. Cognitive mapping creates a narrative incorporating diverse views that can generate a better understanding of ‘what’s going on here,’ than the overreliance on probabilistic modelling. This does not mean that we should toss out models entirely as they can give us a sense of direction and insight, but the sole reliance on them may not allow us to see the wood from the trees and understand the true nature of the strategic problem.