Leaders have to make a lot of decisions (sometimes too many). Over the next couple of months, I am going to share my two favorite decision-making frameworks – Cynefin (pronounced “kin-ev-in”) from Dave Snowden and WRAP from the Heath Brothers (not the candy guys).
What I have come to believe is that there are three main parts to decision making:
- What kind of decision situation are we in? – Simple, Complicated, Complex or Chaotic? (Cynefin)
- How do we make the best possible decision considering all of the available information? (WRAP)
- How do we know when a decision is complete?
Here is a picture of the Cynefin Framework (Part 1 of 3) which I will talk about in this post:
Snowden argues that many leaders forget the first step of decision making which is to first figure out what kind of decision you are making.
Let’s start with Simple (lower right, sometimes referred to as Obvious) – This means that there are rules in place, the situation is stable, and the relationship between cause and effect is clear: if you do X, expect Y.
The advice (per the above picture) in such a situation is to establish the facts (“sense”), categorize the facts, then respond by following the rule or applying best practice. Loan-payment processing is a typical example. An employee identifies the problem (for example, a borrower has paid less than required), categorizes it (reviews the loan documents), and responds (follows the terms of the loan).
Next is Complicated. It is similar to Simple except that the relationship between cause and effect is less cut and dried. Knowledge, experience or process may not be found in your company or group. You must Sense, Analyze and then Respond. That is, you have to do some investigation and pursue inquiry before you move ahead.
For example, recently, one of my clients decided they needed to decide to move or not as they were running out of space and their lease term was ending (Sense). It was important for them to be fair to all while maintaining their culture and employee experience to the best of their ability. I recommended that they look to other companies in their area that had grown and moved who could share their experience and process as a way to help them feel more confident in the decision and the entire moving process and consider multiple options based upon some key criteria (Analyze). They decided to move as it was the best available option for their longer-term needs (Respond).
The third is Complex – cause and effect can only be deduced in retrospect, and there are no right answers at the outset. This is often the most difficult to navigate and execute as you must Probe, Sense and then Respond. Being open-minded, asking probing questions and curiosity will serve you well.
The key here is to create a series of “safe to fail” experiments where the results can guide you to the best possible answer (Probe). I believe that a good example here is making a pricing decision. There are many factors involved. The two most difficult are to determine the true value your customers perceive in your solution and determining if your competitors have done a good job in pricing alternative offerings (usually they have not). Typically, your best next step is to speak to customers to determine how they value your offering and then conduct a series of experiments to see how your customers react to the price changes (Probe). The next step is to review the resultant information (Sense) and then make the best determination as to if or how much to modify your price (Respond).
Lastly, is Chaotic – most businesses, thankfully, do not have to deal with this situation. The key here is to make a decision (Act) quickly that you think best suits the situation (Sense) and then make changes based on the result(s) (Respond).
The best and most popular example I know of to illustrate how important going through this process comes from the Kennedy administration early in his US Presidency. When comparing the different decision processes he went through on the Bay of Pigs versus the Cuban Missile Crisis, one can see a startling change in the process he used to make a crucial decision. Here is a great summary article that goes into some detail on the differences.
Whether you use Snowden’s framework or some other process, I believe it is important to take the time to think about the type of decision you are making BEFORE you begin the process to make the best possible decision.
Please click here to for a video recorded by Dave Snowden about the Cynefin framework.
Next time, I will review the WRAP framework and begin to go into each of the four steps – one at a time.
- Widen your options
- Reality test your assumptions
- Attain some distance before deciding
- Prepare to be wrong
The last part of the three will be an updated version of an old post about Decision Making. This will be coming later in the year as Part 7.
Here is a great decision! Set up a 15-minute conversation to talk about how you can implement a proven system to take the guesswork out of growth (Click here to see a sample one page strategic plan).
Bill – Certified Premium Scaling Up/Gravitas Impact Coach
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