How to make the best decisions for your business under Coronavirus (Covid-19). Part 2
This is Part 2 of a series of articles on how you can make the best decisions for your business/organisation during the Coronavirus pandemic.
I thought I would share some lessons for you on how the military leads organisations in war and during times of crisis. This should help you move towards leading your organisation, team or family as best as possible right now. While avoiding making bad decision mistakes with large consequences.
This article is about:
Why Coronavirus (Covid-19) is a complex not complicated situation, and why it matters
In my previous article I explained that the biggest pitfall during a crisis comes from having poor Situational Awareness. This is not being aware of what’s going on around you. Having bad Situation Awareness is like playing tennis with a blindfold.
Most decision mistakes, in times of crisis, happen due to lack of information, or bad assessments of the situation (aka poor Situational Awareness). Organisations make the wrong decisions because they misjudge the situation.
So what is the solution?
How do we go about having good Situational Awareness during the Coronavirus pandemic?
Well the first thing is to understand the difference between complicated and complex problems.
Complex vs Complicated
Is the Coronavirus pandemic a complex or complicated problem?
It might sounds like semantics. But understanding why the Coronavirus pandemic is a complex situation and not a complicated situation is critical to knowing how you should make decisions.
So to understand what is going on we need a little bit of academic theory:
As Kurt Lewin said “There’s nothing so practical as good theory”.
The Cynefin framework
The Cynefin framework is a conceptual framework used to aid decision-making. Created in 1999 by Dave Snowden when he worked for IBM Global Services. It is a mental model that helps you work out how best to make decisions.
Cynefin offers five decision-making contexts, or ‘domains’, that help us identify how to perceive situations.
- obvious
- complicated
- complex
- chaotic
- disorder
To save time, let us focus on complicated and complex.
The complicated domain consists of the “known unknowns”. A typical example is flying a rocket to the moon, or building a skyscraper. This problem is hard to solve. But it is solvable in advance, with the use of experts and lots of analysis.
These problems are not dynamic or changing. For example, the challenge of flying a rocket to the moon today as it was in 1969.
Complex problems are different.
The complex domain represents the “unknown unknowns”. Situations are changing and in constant flux. You cant see the relationship between cause and effect, there are no right answers. Problems are not solvable in advance.
Examples of this include raising a child, stock markets or battlefields. These environments / problems are dynamic.
You cannot plan exactly what to do in advance, because the environment reacts and interacts with your actions. As you act your environment changes, and so your plan and actions have to change.
As an example, anyone who has brought up a child will know how your best laid plans often unravel when you interact with your child. What works with one of your children is perhaps the opposite that works with another.
Coronavirus is a complex problem. If we enact policies like social distancing then the situation adapts, and we have to re-assess the situation before we continue.
But who cares? Well, the best way to solve a complicated problem is the worst way to solve complex problem. You need to adapt your decision-making approach during the Coronavirus pandemic.
Careful who you believe
Why do I use time on this? Well the biggest problem is that you can’t trust expert intuitive judgements in a complex environment.
Some academics have another name for complex environments. They call them low validity environments.
In 2009 Daniel Kahneman and Gary Klein published a seminal paper on expertise, titled “Conditions for Intuitive Expertise, a failure to disagree”. These are two heavyweight intellectuals.
One of the main conclusions from that paper is that expert intuitive opinions are no better than tossing a coin in a low validity environments.
This is a big problem because our natural reaction is to listen to the opinion of experts during a crisis. But it turns out from hundreds of academics studies that their judgements do not give better outcomes that tossing a coin.
So what does this mean for you? You need to be careful about what experts you listen to.
“So what do?” I hear you mumbling, (if you have read this far). Well the answer answer lies in the framework of a dead American fighter pilot called John Boyd.
The OODA loop
The OODA loop is the cycle observe–orient–decide–act, developed by military strategist and United States Air Force Colonel John Boyd.
John Boyd started his career as a fighter pilot and developed the theory to explain why one pilot wins over another in a fighter jet dog fight.
The OODA loop describes how one should direct one’s energies when operating in a complex and dynamic environment. The faster you can go through this OODA loop the better you will perform.
You do the OODA loop all the time as an individual. When you are driving a car, you see someone in front breaking. Their brake lights turn red, which you see (observe). You understand what this means for you in this context (orientate): He is slowing and if you dont break you will crash. So you decide to break (decide), and then put your foot on the break and press (act). Now you flip back to observe to see if you are breaking enough. And so the decision-making loop continues…
This is easy to do as an individual in a simple environment. But doing this with lots of people in a complex environment is hard. Doing well it well is really hard.
So how do you do the OODA loop with your business/organisation/team during the complex environment of the Coronavirus pandemic?
The answer lies in tool called the Military Decision Making Process. This tool allows your business/organisation to gain external situational awareness in sync with coordinating your internal activities. Both while moving towards your organisational goals. This process is shown under. (Credit to Kristan Wheaton).
In the next article I will share a civilian version of this tool. I will explain how you can operationalise this in your business/organisation/team.
This tool will help you make the best possible decisions during Coronavirus and avoid making costly mistakes.
But for now…
But until then let me leave you with one mental model you can use in your decision making. I will pick back up on this thought in the next article.
Break you’re your decisions into Phase 1 and Phase 2.
Phase 1: You are information collection mode. You source information, analyse it, make assessments and are open to perspectives. Here you have a deliberation mindset
Phase 2: You are in action mode. You have chosen between options, made a decision and now you are focusing on executing the plan. Here you have an Implementation mindset.
Getting people on the same page about what phase you are in will help your team make the best decisions.
