Winning Decisions: What did you learn?

Research by the Center for Creative Leadership revealed that successful executives have been shown to

• Routinely gather feedback on personal and organizational performance


• Interpret the information they receive in constructive ways


• Use this information to adjust personal behavior and improve operational results


• Help others recognize and use the lessons of experience to improve personal and organizational performance

Lessons (schemas)

• Experience is knowing what happened. Learning is knowing why it happened.


• Learning is not automatic. It requires a systematic examination of our experience.


• To succeed, whatever your organizational position, reframe yourself as both a "performer" and a "learner"


• Don't ignore information on outcomes you already possess -- both good and bad

Why we fail to learn

• Limited or ambiguous information about decision results


• Not enough time to make sense of the information available


• No opportunity to test conclusions in new decisions


• Anxiety about appearing a poor performer


• Inability to see how observed outcomes might be interpreted differently


• A tendency to jump to conclusions


• Ignored or distorted feedback


• Difficulty in separating skill from luck

Investigating data (guiding questions)

• Am I making appropriate use of the information the organization has been retaining?


• What do we currently measure and record?


• Does anyone already track the information I need?


• Is the information in someone's head, a phone call away?


• Are there project files I could review?


• Is information being destroyed that could aid in my learning now or later?


• Could data modeling techniques be implemented that outperform human estimates?

Unambiguously define success beforehand

• Set clear criteria or milestones that unambiguously define success or failure. Determine what methods will be used to measure the results, and make the separation between success and failure explicit.


• Stick to the original criteria; don't move the goalposts after you have started the game.

Questions to ask after failure

• What should I have done differently?


• What problems did I mishandle?


• What did I avoid that should have been addressed?


• What more could I have done to get the result that I wanted?

Questions to ask after success

• How much influence did I really have?


• How lucky was I?


• What role did others play?


• Did I know what I was doing or was I just guessing?

Questions for others

• What do you think were the key factors in producing the final outcome?


• How did my actions contribute to the success or failure?


• What more could I have done?


• What did I do well?


• What should I do differently next time?

Presentation trick
Ask people to predict or guess what you found before they read your report. Then you can demonstrate just how your analysis differs from their initial assumptions. In a presentation, ask the audience to write down their predictions prior to your revealing new findings. That way, you will most impress them with the value of what you have learned.

Royal Dutch / Shell's Arie de Geus likes to tell the following story:
In the early 1900's, milkmen in England would deliver uncapped bottles of milk to the door of each country home. Two species of British garden songbirds - the titmouse and the red robin - learned to siphon the sweet, rich cream from the top, so between the two world wars, dairy distributors began placing aluminum seals on the bottles.

Individual robins and individual titmice figured out how to pierce the seals but by the early 1950's, every titmouse in the United Kingdom had figured out how to pierce the seals. The robins, as a species, never figured it out. The knowledge never passed from the individual robins who had learned to pierce the seal to the rest of the species.

It turns out that the reason lies in the difference between the structure of the species' social organizations. Red robins are territorial and titmice are a very social species.

What ever happened to that candidate we didn't hire?
Capturing information on the results of actions, including options not chosen, is the only way to determine the value of your decision rules.

The authors outline a couple specific tactics to accomplish this:

1) Give decision-makers timely feedback of outcomes.
2) Track the path not traveled

Beware of self fulfilling prophecies
Let's say a venture capital firm chooses to invest in startups with a high expected payoff and then takes a seat on the board of directors. On average, the startups do well. Did the VC firm choose wisely initially or was the guidance it provided the primary cause of success?

In many cases, we influence the outcomes of our decisions through subsequent actions. This makes the quality of the decisions themselves hard to judge.

Using Experiments to Improve Decision Rules
The short term cost of setting up and executing experiments to test decision rules can far outweigh the long-term savings it can provide by improving your decision rules. These experiments can be real, statistical or simulated.

Experiments can help us learn from experience when we can't directly track the path not traveled (the candidate we didn't hire won't return our calls for a survey) or separate the impact of the decision from its implementation (VC's startup selections being successful). Experiments can create the needed experience.

Learning Organizations
The rise in the number of CLOs (chief learning officers) and CKOs (chief knowledge officers) - jobs that didn't exist a decade ago - is a testament to the recognition that unless someone is in charge of disseminating information across an organization, it is unlikely to occur.

Learning organizations have completely different operating characteristics, cultures and development structures than organizations still struggling to integrate learning into their framework.

Develop a Learning Culture
Replace "defending and debating" with "listening and learning".

Learn From Others.
Seek out and share internal "best practices". Learn from other organizations.

Transfer Knowledge
Preserve organizational learning.

Learn from past experience
Develop "learning histories". Map the minefield. Conduct group learning audits.

"Mistakes" vs. "Investments in Learning"
Don't bury your failures. Learn from them.

The following story is told about Thomas Watson, Sr., founder of IBM. An executive dejectedly approached Watson after making an error that had cost the company $10 million. "Go ahead," said the executive. "Fire me. I deserve it."

"Fire you?" Watson responded. "I just spent ten million dollars educating you."

The fear of making mistakes - and their consequences - may be one of the most intransigent barriers to learning. To create a learning organization, leaders must create an environment in which people are not punished for making honest mistakes, but rather only for failing to learn from their mistakes.

Don't Wait For Those At The Top
Terry Chandler, former national sales director for Eli Lilly's Neural Science Division and one of the best developers of people that we know, believes that modeling how to learn is a powerful tool. "If you can instill an environment where people can express their views, regardless of their title or position, you reach better final decisions," he says. "People want to bring their issues out, but framing it so as to give them permission to do so can be challenging."

Fail fast and fix it fast.

Real learning requires you to become a participant-observer in your own environment. Even if your control doesn't span across the entire organization, you can create an effective learning environment within your own sphere.

Author Minna Antrim has said, "Experience is a good teacher, but she sends in terrific bills." Given the high cost of experience, how much better if we can learn from it fully. The challenges are many, but the effort to overcome them - to create an environment that supports individuals to learn within organizations - is well worth the cost.

Photo by -bartimaeus- from flickr and used under a Creative Commons license

Businesses need to make fast and accurate decisions without wasting time backtracking to correct mistakes that cost them dearly. In an unpredictable environment where the playing field changes daily, companies often have to make decisions with incomplete information and with a high level of uncertainty.

Herein lies the power of the framework. A system that allows you to frame a decision properly and gather the right facts will help reach a good conclusion faster and with greater ease then jumping into decision-making without preparation. A system that shows exactly where our decision process breaks down avoids overreliance on intuition and experience and focuses on constructive actions that save time and wasted effort.

An organized structure bends to your circumstances and allows for creativity, lending itself to well-rounded decisions. Use guidelines, not rigid rules. Before you think about your decision, think about how you'll make your decision (How will I think about accepting that offer? Instead of, "Should I accept the offer?") Will it be alone or in a group? What is the crux of the issue? What challenges do I face in making the decision? Do I seek advice from others that I respect? How long will I spend on each stage of decision-making?

Your structure should contain a framing stage to decide your perspective on the decision and determine what specific criteria you want to follow through with in the final decision. Next, you gather intelligence and collect all relevant information to your decision. Decide the boundaries for the type of information you want to include and pare down to essential facts. The first two phases expand your alternatives. The second two phases, coming to a conclusion and learning from your experience, narrow the scope of your decision, forcing you to seek insight from the decision you made. Coming to a conclusion draws on your original framework and applies it to the evidence you gathered.

Breaking down the decision into manageable stages allows you to reason carefully at each step and provides control from the beginning of the process. Each stage directs the process and fluid movement between stages is encouraged to refine your decision. Getting specific advice on your mistakes will help you avoid them in the future, and practicing the process continually will make it easier to make good decisions on your first try.

CASE STUDY: RealHome.com
Richard Roll, CEO of Realhome.com, used this framework to select a new COO (Chief Operating Officer) for his company, a one-stop website of real-estate resources and information for homebuyers. Roll first took some time with his decision (3 months) to find a COO while he assessed RealHome.com's situation. He knew that as time increased, his anxiety would increase also in hiring someone, so he prepared for it by setting up established guidelines. He set up a specific time frame for himself and recognized the pitfalls so that he could avoid hiring someone (who could potentially be a costly mistake for his company) at the last minute. He wanted to define who he was looking for and he knew that intelligence gathering would take some time, but he was willing to sacrifice the messiness and time that intelligence gathering/interviews took to make a better quality decision in hiring the right person.

He got to the crux of the issue to determine what criteria framed his decision: what job did he need to fill and what type of person did he want? What did he and the company most need? He knew the candidate should fit inside the culture of the company and embody similar values, but also have strengths opposing his own. He gathered intelligence by casting a wide net across advertising networks to get the right people to apply, and then generated candidates that fit the criteria. He faced challenges in acquiring a pool of good options in the first place and realized that one person may not have all of the criteria he was looking for. He realized he could not wait to explore all of his options because the best candidates would disappear. He kept his framework in mind, remained open to new tools (creating a 3 month trial period consulting position for someone in case he didn't find an ideal candidate), and talked with a former board member who offered him advice. Creating flexible options for himself lessened the anxiety and pressure he felt to make a decision quickly.

During the interview, Roll measured each candidate against the broad criteria he set up during his framing stage, and referred back to it to ask "why?" He remembered the qualifications he set up and stuck to them because he knew he couldn't spend infinite amounts of time on his decision as the best people would be gone.

When Roll felt that he wasn't coming to any sound conclusions, he went back to intelligence gathering and since his framework wasn't linear, moved back and forth between framing and gathering intelligence. Even though the first two phases took a significant time and Roll didn't have stellar candidates, he did have a well-established frame for evaluation that he refined throughout the process. He identified the importance of having clear criteria and sticking to them. Because he took the time to make these decisions before he came to any conclusions, he had a clear idea of what he wanted and was not tempted to hire just anyone to fill a need.

In the end, Roll hired John Hartounian, a candidate who came late into the final stage of the interview process, but who impressed Roll. Roll stuck to his frame and then managed his decision by coaching Hartounian into a success within the company.

SUMMARY: Having a pre-decision making process is valuable time and effort saver in the actual decision-making process. If you spend a significant amount of time, money, energy investing in making your decision properly, chances are your decision will be a good one. You should think about your options and which stage of decision making might provide some challenges. Within decision-making, having stages for framework, intelligence gathering, coming to a conclusion, and learning from your mistake are all stages that should be followed, but not rigidly. Your structure should be fluid so you can move between stages to gather the most relevant information you can to make a sound decision. Remain flexible and open to new options, but realize that gut decisions and ones made from time pressures will not be as sound as using a rational process. Many people do not give value to the decision-making process or the pre-decision-making process but it is often the compliance with each stage of that process that leads to a "winning" decision. Continue to adapt your process and learn what works and what doesn't for you.