Sunday, 22 March 2009
It is a natural law that top managers must take big decisions without evidence that they are right or wrong. It just as natural that post hoc evaluations will be unbalanced and unfair.
When a decision proves right, you must claim authorship not only of the decision but also of its upside consequences. This is your argument for being hugely rewarded, even though you took the decision without 'evidence' that it was right.
When a decision proves wrong, then you must argue you should not be punished or held accountable for the consequence, because there was no 'evidence' at the time that the decision was wrong. (E.g. nobody could foresee the fall in the housing market, that no Weapons of Mass Destruction would be found, etc.) Admit no errors of judgement.
Beforehand, stress the quality of your judgemental input. Afterwards, never say your judgement was wrong – you were right at the time given what was known then – it is just that events took an unforeseeable turn, to which you have now adapted yourself. Dismiss any suggestion that events could have been foreseen. Those who had sufficient judgement to foresee events, and advised you from the start to take the course you were eventually forced to take, did not have better judgement; they were wrong at the time, given what was known then. People like that always advise against any radical action anyway. They were right in this case, but only like stopped clocks are right twice a day.
Of course, a gamble or a risky decision can appear stupid with hindsight. And others may be in a position to make plausible criticisms. So you should prepare your excuses or escape plan for the eventuality that people do attribute bad outcomes to a decision you made. So start rehearsing some of the following get outs:
Construct scenarios in which decisions other than yours would have led to disaster.
Adapt Gordon Brown’s line “Making no decision could, nay would have been worse than any other decision.”
Tell them business necessarily involves taking risks. E.g. Loaning money to the poor is risky, but that's how banks have been making money for their shareholders for years. You don't make money in finance by taking no risks.
Blame your analysers. “Our highly qualified risk managers calculated the risk was acceptable.”
Say “Of course judgement with hindsight is always perfect, but I was right at the time.”
Saturday, 21 March 2009
You may be worrying. If you approach management decision making as gambling, and you place your bet without working to establish a consensus, then what if things go wrong? What will other people think or say then?
Happily for you, it is most often impossible with hindsight to know whether a senior management decision was good or bad, right or wrong. Who has the time and resources to measure outcomes? Who can say what would have happened if an alternative path was followed?
So you can get away with a lot.
Tuesday, 10 March 2009
One alpha characteristic is to have no doubts about your judgement. You don’t believe your decisions are little or no better than random. You don’t invite your decisions to be challenged. You assume the right to push aside anyone who disagrees with you, rather than engage them in dialogue. Be you an alpha or not, this is wise, because you don’t want to risk shallow thinking being shown up. And if your decision turns out to be mistaken, you don’t want people recalling it was questioned.
As a gambler, who prefers to make business decisions without systematic analysis, you don’t want calculators alongside you at the top table. Better to sit with other gamblers, who are more concerned about their own decisions than yours.
You do however want calculators in positions where you can control them. If you fear a decision may be challenged, then employ your calculators to create an audit trail. They’ll usually find it easy to manipulate a decision-making tool (by changing the factors and the weightings) until it supports the direction you first thought of.
Ref. The grilling was February 10th 2009; the events some years before.
Tuesday, 3 March 2009
The Delphi method is a systematic way to produce an estimate or forecast. A facilitator guides a panel of experts through a process that gradually narrows range of their individual answers until they converge towards the optimal answer. Many such consensus forecasts have proven to be more accurate than forecasts made by individuals.
In “The Wisdom of Crowds”, the author Surowiecki suggests you use four key criteria to separate wise crowds from irrational ones:
· Diversity of opinion: Each person should have private information even if it's just their own interpretation of commonly known facts.
· Independence: People's opinions aren't determined by the opinions of those around them.
· Decentralization: People are able to specialize and draw on local knowledge.
· Aggregation: Some mechanism exists for turning private judgments into a collective decision.
But again, the careerist will ask: How many managers are promoted as a reward for painstaking work to establish a consensus?
Systematic decision methods appeal to analysers. The gamblers who tend to reach the topmost management positions prefer to go with their instinct. Why embark on a procedure that will either reach a decision you would rather be seen as making yourself? or contradict what you want to do?