Commentary: Decision making is always a challenge. Afterall, how does one make good decisions? Good decisions are sound decisions. Sound decision making is both a science and an art. One has to understand the process and structure of making decisions then develop their own experiential style. This comes with practice and diligence. Nonetheless, making good decisions is trainable and can be learned.
Decision Making in Operations
Operations come in many flavors; manufacturing, general business, healthcare and a host of other operation types. While the detail, jargon, and industry processes may vary dramatically, general management of operations falls back on common principles of managing money, manpower, machinery, and methods/processes/workflows. In this mix many things can go awry. The operations may deteriorate through a series of cascading engineering casualties, complex external factors may disrupt the operations in unfavorable ways, or the process steps may be missed or forgotten creating decision making challenges in a crisis environment. The goal will be sage management of the event(s), tasks, and risks to the operations. During such crisis events, rapid decision making demands are often placed on operations managers. How well they make decisions and manage the event can determine the amount of time to recover and the magnitude of recovery cost.
Understanding the types of decision making and when they are useful is a first step but there is more. Designing operations and information flows to aid in decision making is another part which take time. Most successful decision makers have run through scenarios, in advance, and have a method of approaching decisions. First, let's discuss the decision making types based on thinking style then we will explore other parts briefly.
Critical or Analytical Thinking
What does the data show? This question characterizes analytical thinking. Analytical or critical thinking is ideal for exposing deep rooted issues, complex relationships, and quantifiable outcomes. Critical thinkers are people who have developed thoughtful and well-rounded beliefs that guide their choices. Critical thinking is coupled with reason which is an outcome of the ability to learn. The critical thinker:
· Carefully analyzes and evaluates beliefs
· Views situations from different perspectives
· Supports viewpoints with reason
· Thinks critically about the personal 'lens'
· Synthesizes information into informed conclusions
· Selectively draws on credible information principle to the analytic lens
One challenge of this style of thinking is that often there is a tendency to become too data driven or overtly data focused. Analytical thinking can result in analysis paralysis as efforts to gather more and more data overwhelm the decision process. Other styles of thinking lend well to operations management on a more day-to-day level. Critical thinking is more for the long term.
Gut or Instinctive Thinking
This style of thinking is generally useful for putting ideas into practice. It is coupled with a hands on, rolled up sleeves, experienced know how also known as thinking from-the-gut. Gut thinking falls back on instinctive feeling about the circumstances and results in sage judgment calls. Operations managers who are particularly adept at gut thinking use a technique called thin slicing. Thin slicing results from experience or substantial histories. Those good at thin slicing can strip away extraneous data and pick out seemingly insignificant tidbits that tend to be critical indicators or tale-tale triggers for highly accurate assessments and judgments.
Good gut thinking takes experience and training in order to react correctly as circumstances emerge. The entrepreneurial spirit is born from gut thinkers. They know what works and what does not work instinctively.
Thinking from the gut is more emotional and rational. When in gut thinking mode, thinkers should be cognizant that becoming too emotional has its drawbacks as well. Thinkers can become emotionally attached to decisions. When this happens, poor emotionally based decisions begin to increase and may surpass the good emotionally based decisions.
Creative Thinking
The creative thinker relishes in the elements of surprise and breakthroughs. While many people place a reliance on incorrect axioms such as 'necessity is the mother of invention', the truth is the opposite applies, 'invention is the mother of necessity'. Rarely do people know what they need even though they may know what they do not want. Invention and/or innovation create and drive needs through creative expression. Raychem former CEO Paul Cook remarked, "What separates the winners and losers in innovation is who masters the drudgery. The creative process starts with a brilliant idea. Next you determine whether, if the brilliant idea will worked, it would be worth doing from a business standpoint. That's the exhilarating part. It may be the most stimulating intellectually, but is it also the easiest. Then comes the real work - reducing the idea to practice. That is the drudgery part" (Taylor, 1990).
Creative thinking aides in determining potential outcomes and options as part of the decision making process. Breakthroughs are associated with creativity. The creative process requires several abilities:
1. Creating Possibilities: This is process of lighting an inner fire or having the bulb come on. Many methods exist for achieving breakthroughs.
2. Pinpointing Real Issues: The ability of sorting through the noise to expose the origin of an issue. Often the origin of an issue is multi-dimensional stemming from behavioral and psychological traits within the organization and staff.
3. Pattern Recognition: Pattern cognition is the ability of making sense out of complexity. It affords the inventor a means of screening a cloud of noise into meaningful trends for exploitation and/or exploration.
4. Managing Chance: Often meaningful discoveries are not being sought after but instead are stumbled upon in pursuit of another discovery. Creative thinkers who are able to discern golden egg opportunities stumbled upon then channelize them into profitable products or services have a talent.
5. Detect and Transcend Boundaries/Barriers: Often life circumstances, training, and incorrect axioms place unnecessary boundaries before the thinker. Identifying these obstacles and traveling past them is the mark of an independent thinker. The unknown or unseen realm is filled with possibilities and opportunities.
6. Apply Analogies: Being able to spot analogies reveals knowledge that can be transferred to another context. The knowledge base is said to be transferred to a target invention.
7. Systems Thinking: Realizing the interplay of components and how all things are affected and interconnected.
8. Visualization: Imagination is far more important than knowledge says Einstein. This technique permits the inventor to travel places unknown and see things from unusual perspectives. It is often coupled with combinatory play or toying around with ideas combining them in various ways.
9. Embracing Failure as Successes: Learning from ones mistakes and building on them without losing enthusiasm.
10. Multiplying Insight: Invention often spawns invention. This is the ability of the inventor to note other opportunity from within opportunity.
Part of the creative process understands the basics of design. The three component basics are:
· Visceral: Concerns itself with appearances.
· Behavioral: Concerns itself with pleasure and effectiveness of use.
· Reflective: Concerns itself with rationalizations and intellectualizations.
All three are interwoven with cognition and emotion that is necessary for design. Depending on the mix of these component elements, the creative transitions from highly functional and bland in appearance to not-so functional and artsy. The creative process involves many things which can be generalized as innovation having the element of surprise. Creative people use a host instruments to enhance their creativity.
Albert Einstein practiced image streaming and visualization. His theory of relativity was an outcome of an image stream where he pretended to be a photon of light travelling through space in his minds eye. Leonardo Da Vinci is the most creative person known in human history. He employed seven Da Vincian principles that guided his creativity. These seven principles as discerned by Michael Gelb are:
· Curiosita: Curiosity; an insatiably curious approach to life and unrelenting quest for continuous learning.
· Dimostrazione: Demonstration, a commitment to test knowledge through experience, persistence, and a willingness to learn from mistakes.
· Sensazione: Awareness and experience of senses, continual refinement of the senses, especially sight, as the means to enliven experience.
· Sfumato: Up In Smoke, a willingness to embrace ambiguity, paradox, and uncertainty.
· Arte e Scienza: The Art of Science, Development of the balance between science and art, logic and imagination, Whole Brain thinking
· Corporalita: The whole body, cultivation of grace, ambidexterity, fitness, and poise.
· Connessione: Everything is linked, recognition of interconnectedness of all things and phenomena. Systems thinking.
Many techniques may be found on the website MindTools where a variety of tools and approaches to being creative are highlighted. There is no pattern or standard approach to creativity. There are instruments that can be combined in interesting ways.
Combining Thinking Styles
A critical need in high tempo operations where rapid decision making occurs is a way to run compressed time operational simulations of critical systems. This kind of tooling should allow the operations managers, on a hunch, to easy and quickly run on-the-spot simulations in which they can easily conduct combinatory play that can illustrate potential outcomes in short bursts into the future.
A survey on the market of simulators indicates little that is commercial off-the-shelf and/or out-of-the-box ready simulators. However, there are simulators that model process, flows, life cycle, and production. Each has to be 'loaded' for the specific operation under consideration and generally runs on a power machine. One way without computers is to organize the operation in terms of a flow or velocity of revenue and cost streams. For each hour of impact costs can be tallied quickly. In the case of positive risk returns where the operations is highly productive revenue or gains can also be compounded quickly as well.
Selection of a predictive model is important. Present models represent the current situation and are updated in the current moment then projected or extrapolated into the near future. Future models reside at some instance in the future and are adjusted by current data or future contingency data. The future model is regressed to the current for a matchup. Each approach has its merits and can yield very different outcomes. Running see models in compressed time could give operations manager’s insight into system behaviors on the fly. These are tools to assist in the decision making.
Other methods in assessing risk include an on the fly operational risk management methodology. In this approach, risk acceptance levels are predetermined. Subject matter experts, SMEs, are huddled to identify and assess risk in an ongoing effort as required. Emerging risk that is determined significant is then monitored and managed.
Even though tactics and tools are available, nothing beats experience.
References:
Taylor, W. (1990). The business of innovation: an Interview with paul cook. Harvard business review. Resourced April 25, 2012, http://hbr.org/1990/03/the-business-of-innovation-an-interview-with-paul-cook/ar/1
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