Making Decisions Outside Your Repertoire

When faced with a new challenge, forget about acting fast. Instead start a three-step process to formulate the best solution

In these turbulent times, everyone wants you to act quickly.

Don't. It's a trap.

The strategic moves needed today depend on your ability to make smart decisions—not fast ones. Particularly in times of stress or emergency, the pressure to take quick action is enormous. That pressure plays into many people's strengths and possibly yours as well. Doing something, and quickly, has been a mantra in the American working world, but look where it has led us. The insatiable desire for short-term returns has decimated Wall Street and the U.S. economy as a whole.

So many current challenges have no known solution because they stem from complex, new issues. These are what we would call adaptive challenges—issues whose solution is outside your repertoire. The most important thing to do when confronted with these challenges is to resist leaping into action. You cannot solve these complex challenges with mere technical solutions.

The challenges we now face will require us to grow into a new set of competencies. Pushing out the decision time line, taking a wider and longer view, and stepping back to clarify the nature of the problem itself—before you make enormous investments or roll out large-scale programs—can be the difference between strategic growth and wasted resources.

Three Steps To Cooler Interventions

We admire the head of a global professional services firm we have worked with who resisted the pressure from partners—and even some clients—to make big bets in international expansion. He chose to wait until some competitors had made their investments so he could learn from their mistakes and distinguish between the flavor of the month and serious opportunities for growth.

Resisting the impulse to act is the first step in responding to a challenge that has no easy technical fix. Slowing down the freight train is difficult, so here are the three steps to follow:

(1) Observe: Collect data and stand back to watch events and patterns around you.

(2) Interpret: Examine what you are seeing and hearing, then develop multiple hypotheses about what is really going on.

(3) Intervene: Act to address the challenge, test multiple hypotheses, and then monitor progress on each.

The latter activities build on those that preceded them. You can intervene effectively only if you interpret well, and you can do that only if you observe effectively. The decision-making process is iterative: As you intervene, there will be lots of new data to take in and you will have to refine your hypotheses and perhaps make mid-course corrections in the interventions you have begun

off the dance floor—to the balcony

To better understand where your customers, suppliers, or teams are, you must take in more and different information than you have in the past. This is about collecting both quantitative data (Wal-Mart [WMT] tracks every imaginable piece of data—product purchasing, time on shelves, and so forth) and qualitative data (Best Buy [BBY] does lengthy research on the retail customer experience and how to better engage female consumers).

If you are observing well, you should never be surprised by sudden shifts in client relationships. Observing is a highly subjective activity, but the goal is to make it as objective as possible. Reflecting in the midst of action—what we call moving off the dance floor and getting on the balcony—is a powerful way to do this. It enables you to gain some distance, watch yourself as well as others while you are in the action, and see patterns that are hard to observe if you're stuck at the ground level, where the action is swirling around you.

Now that you have collected all this data, you need to make sense of it. Interpreting is an inherently provocative act, much more challenging than observing. When you hypothesize out loud and disclose the sense you are getting from your observations, you risk generating resistance from people who have formed different interpretations. They will want you to embrace the "truth"—whatever version of reality works for them.

The current crisis in the automobile industry is a prime example, ripe for multiple interpretations. Automaker and union executives can use many ways to interpret what has happened in the industry. The fact that the industry is in crisis could be thought of as an economic issue or one of design, ecology, or globalization. Interpreting too quickly leads to a narrow response.

The well-designed intervention

Most interpretative patterns are fashioned unconsciously and with lightning speed, throwing you into action before you can ask yourself: "Is my explanation for what is happening correct? What are some alternative hypotheses?" If you do not question your own and your team's preferred interpretations, you may unintentionally end up avoiding the difficult tasks that need to be tackled in order to make real progress.

Once you have made an interpretation derived from your observations, what are you going to do about it? Will you share your interpretation during a meeting, try it out with a small group, or just wait? Your next move, your intervention, should reflect your understanding of the problem and your hypothesis about the best way forward.

Well-designed interventions provide context; they connect your interpretation to the purpose or task on the table so people can see that your perspective is relevant to their collective efforts. If they cannot see the relevance, they might write you off as if you were riding a personal hobbyhorse ("That's Jack's issue").

Strengthening your ability to design interventions that lie outside your comfort zone takes practice, but it is a vital component of effective leadership. It will help you tailor your interventions to each unique situation and make you less predictable. And that makes it harder for others to neutralize you.

Consistency is a great virtue for management. For leadership, it gets in the way. The challenge in the days ahead is to diagnose the situation, discern when management or leadership is needed, and use observation and interpretation skills to move forward strategically.
- BusinessWeek, June 18, 2009