Decision Making

PLI SmartBrief, an online newsletter I subscribe to, recently ran an item  entitled “How to tell which job posts to skip over” which reminded me of a session I attended several years ago at a PDC [Professional Development Consortium] conference on “How Business People Reason.”  The presenter, Peter C. Briant, was a former Professor of Economics and Accounting at McGill University and was leader of a 4-day program at McGill Executive Institute called “Accounting and Finance: Real-world financial skills for non-financial executives, top management and small business owners.”

“A decision is a moment in the process of time.”

Dr. Briant used that statement to begin his presentation.  “In this life and in our past decisions there is no future, only ever present decisions that work themselves out over the future.”  He used these statements to emphasize that rational decisions are made in the present, without regard to past or future.

He based his presentation around a very simple situation.  One many of us have faced, which is probably why it has stuck in my mind for so many years.

“Someone working for you says, ‘I have another job offer but I am willing to stay here.”  Dr. Briant asked what information the manager needs in order to decide to keep this employee.  The audience volunteered:  work record; present salary; nature of the work; investment in training replacement; reason for leaving; motivation to stay; precedence; budget; what is the other offer; and impact on my organization.

All good comments but Dr.Briant identified the issues as:

• Interests of the organization – today;
• What is the person’s value to the organization – today;
• Do we need the function – today.

Those issues are all in the now.  There is no mention of how much was already invested in training the employee or what it will cost to hire and train a replacement.  While these may be underlying issues, they were not identified as primary considerations.

The presenter explained the four keys to rational decision making:

1.  Be here now! The decision must be made in the present, based on the situation that exists at the time the decision is being made.  To do that the decision maker must classify the information as Past, Present and Future and then focus only on the present.

2.  Ask the right question! This requires the decision maker to analyze the present situation and reduce it to a core, fundamental question that can be answered “yes” or “no.”  If the question is right, there will be no ambiguity in determining the rational decision.

3.  Think as an investor! Disregard your relationship with the employee and put yourself in the shoes of the investors in the organization.

4.  Use objective criteria! In other words, stick to the business aspects in this phase of decision making.  Dr. Briant advised starting out seeking a rational decision, then moving to the emotional and ethical considerations as appropriate.

Key #2 is important.  “Ask the right question.”  So what was Dr. Briant’s question in this employment situation?

“If he was not on our staff right NOW and we were looking to fill that position NOW, would we hire him?  If the answer is “yes,” make an offer to keep him.  But  if the answer is “no,” let him go to the other job.  Sweet and simple.

Dr. Briant expanded that this kind of reasoning can also be applied to personal decisions.  However in those situations this method of decision making may not always provide the final answer, as there may be emotional or ethical or financial considers to factor in.  But it does put things in perspective and provide clarity on how you really feel NOW and where you draw the line.