leadership
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kate cooper
Anxiety over not knowing leads to irrationality
Embrace uncertainty to make better decisions Kate Cooper is head of research, policy and standards at the Institute of Leadership & Management
Thinking, Fast and Slow has made a significant Richard Thaler has just won a Nobel Prize contribution to how we understand for saying something that many already decision-making processes, distinguishing knew. Those of us who have been party between intuitive and rational thinking. to decision-making within organizations What is often forgotten about decisionare acutely aware that the calls made are making is that a decision should be a choice sometimes – perhaps often – irrational. between real alternatives. Let’s not fool Yet Thaler’s challenge to the neoclassical ourselves that we are making a decision economic model of rational decisionif the proposed courses of action are not making leading to optimum satisfaction and genuine alternatives and properly informed. allocation of resources has been extremely Too often the formulation of the decision, influential. The creation of the UK’s or, put another way, the problem to be Behavioural Insight Team – the so-called solved, says more about the definer than ‘Nudge Unit’ – being one notable example. the problem itself. It is during that period of We hear much about leadership and uncertainty – which is likely to decision-making. Decisiveness be stressful – that we must seek has a longstanding history as a these alternatives and ensure desirable leadership attribute; Nothing that, as far as is possible, they indecisiveness an unwelcome is more are feasible and viable so our trait. Being in a state of difficult, and choice is genuinely informed. indecisiveness – not knowing An informed choice is what to do – was found, almost therefore more an array of options about universally, by researchers precious, than which you have knowledge, Shelley Taylor and Peter to be able to intelligence and credible Gollwitzer to induce a state of decide information; it is not based on neurotic pessimism. Napoleon Bonaparte individual opinion, anecdotal Once a decision has been evidence or weak research. made and we start acting i.e. There should be some sort implementing the decision, of evidence base – or explanation of its we cheer up, feel confident and – ironically absence – for each option. If the quality – much more able to make decisions. The of information gathered to support an period of not knowing, being uncertain alternative is variable, with for example, a and faced with a degree of ambiguity is, more robust and persuasive case presented for many, stress-inducing. We all know for the already favoured option, the decision people for whom the state of not knowing could be considered irrational. is almost unbearable and the quest for There is much dishonesty in certainty imperative. At this point, it would organizations about processes which are seem obvious that ill-informed decisions mere window-dressing for faits accomplis. are likely to be made: the drive to quieten This threatens not just rationality, but the emotions arising in the period being also authenticity. If leadership teams are a rational response; the decision itself to deliver high-quality decisions, they anything but. must develop their capacity to deal with The role of decision-making as a key uncertainty, to recognize that, for many, it’s organizational process first appeared in not a comfortable place. Chester Barnard’s 1930’s book The Functions The best decision-makers tolerate not of the Executive. Subsequently there have knowing. They are aware that, given the been many different takes on how we abundance of available information, it is not should, and do, make decisions. Malcolm Gladwell’s Blink offers insights into the value so much the value of the answers they seek, but the quality of the questions they ask. of intuitive judgments; Daniel Kahneman’s Q1 2018 Dialogue
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