The Dozen Decision-Busters for 2013 (Karrh on Marketing)

by Jim Karrh  on Monday, Jul. 23, 2012 12:00 am  

Jim Karrh

"Jim, welcome to July, the official start of the fourth quarter around here!" I heard that comment a week ago while leading an implementation workshop. Those marketing, sales and product managers were working to finish 2012 strong but clearly with an eye toward 2013 too.

It is officially 2013 for much of the public sector, and the private sector is beginning to crank its strategic and marketing planning machinery. Now is a good time to review, and put into place, the clear thinking and solid processes that will lead to good decisions soon.

These days I spend much of my time either 1) helping organizations through research and executive facilitation to produce a sound strategy or 2) taking the strategy as given, then helping a field-level team implement it. I've seen firsthand that most problems with implementation come not from the limitations of a team or budgets but rather from biased decisions in creating the strategy itself.

It's difficult, if not impossible, for individuals (myself included) to recognize and fix their own biases alone. But executives can - with the proper tools and some outsider perspective - recognize and neutralize biases within their teams.

The legendary psychologist Daniel Kahneman and his colleagues have suggested using a checklist to find any destructive biases in teams and their strategic recommendations. I will share 12 pieces of such a checklist that are useful to consider, whether you are an executive who will be evaluating the recommendations of a team or part of a team that will be making and presenting recommendations yourself.

  • Errors from self-interest. The bias toward rationalizing our own interests is powerful; it shows up in decision-making from marketing executives to physicians and nearly every profession in between. Who has a stake in the decision going a certain way?
  • Recommenders falling in love. I'm not talking about them falling in love with one another but rather with their own recommendations. This is the "affect heuristic" through which we pump up the benefits and minimize the costs when evaluating something we like. It is difficult yet important to keep emotions in their place.
  • Dissenting opinions. When the U.S. Supreme Court makes a less-than-unanimous decision, there is openness about which justices disagree with the majority opinion and why. Of course, those justices have a lifetime appointment and are probably less susceptible to groupthink. You, on the other hand, should be skeptical of any false veneer of unanimity from a team. We've found that deliberately adding more diversity of backgrounds and points of view to the team can at least ensure there is no rush to agreement solely for agreement's sake.
  • Ignoring credible alternatives. Planning groups, like all of us as individuals, are prone to generating one promising idea then jumping to evidence that supports it. A good practice is to force everyone to come up with at least two plausible alternatives to the proposed recommendation along with pros and cons for each.
  • Overlooking what isn't in front of you. Kahneman has pointed out that our intuitive minds tend to build a coherent story based upon available evidence. We have to fight our own instincts to consider what is missing. A good practice is to develop a list of the information to consider and how to approach it before the team begins sifting through things.
  • The wrong comparisons. Sometimes a "saliency bias" can take hold, through which a very memorable event clouds judgment. I've seen this creep into team discussions when, for example, a recent success story is used to bolster the case for a decision, even though the success story was a weak comparison for the decision at hand.

Now is a good time to consider the people who will be making recommendations and decisions for the coming year, along with the very specific processes to follow.
In my next column, I will share the final six decision-busters - along with suggestions for building a better evaluation process within your organization and making it stick.

(Jim Karrh is the founder of Karrh & Associates and director of MarketSearch, both of Little Rock. See JimKarrh.com or email him at Jim@JimKarrh.com.)

 

 

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