“Heat” – How to Train Your Decision Making

In one of the greatest gangster movies of all times,”Heat”, lies hidden deep wisdom for all decision makers big and small. It is not that you should change your business model and start robbing banks, hire Al Pacino or even that you have to grow a moustache and goatee to succeed. But our decision making is clouded by two problems that can be attributed to how our brains work. They can be overcome by heeding the advice of “Heat”.

Cool feature…
Before deciding to do something most people will investigate the possibilities. This is the first place where your decision making could go wrong. People have a tendency to attribute too much importance to the first information they get. This is sometimes called the anchoring bias. The effect is that all subsequent evaluations will be affected by that first thing you see even though that information is irrelevant.

It could be that you are looking to invest in a new Customer Relationship Management system for your company and you hear about a vendor that has close integration with facebook. Again this is a cool feature, but essentially irrelevant. All subsequent CRM systems will be reviewed in the light of whether they have facebook integration.

Jeans suck!
After having seen a couple of alternative solutions to your problem you will start to develop hypotheses based on your gut feeling, for example that products from Germany are inherently more robust. You may have seen two or three examples of this. Here comes the next hurdle: the confirmation bias. The confirmation bias makes you look primarily for confirmatory evidence and attach more importance to it than to contrary evidence.

It could be that in your recruitment process for a new ambitious account manager you encountered two polite applicants from, say, London. This has made you develop the hypothesis that people from London are polite. If an impolite applicant from London comes along, who may forget to shake your hand, you may not attribute his geographical origin any value in your evaluation. Chances are that you will use another hypothesis, for example that people in Jeans are impolite and this is why he is not as polite (at this point you have forgotten that the first applicant from London also wore jeans, but at that time you didn’t pay attention to it). You just made that up on the spot to make sense of the evidence.

Psychologically it just feels a lot nicer to have your hypotheses confirmed, than having them contradicted, even to the point where you make up new ones just to have some confirmation.

30 seconds flat
Flash back to “Heat”. At one of the absolute highlights of the movie the policeman, Vincent Hanna, who hunts the gangster Neil McCauley decides to have coffee and talk with Neil. At the climax of this conversation Neil McCauley says the sentence that has also given the movie its name: “Don’t let yourself get attached to anything you are not willing to walk out on in 30 seconds flat if you spot the heat around the corner.”

This is deep wisdom, because, if applied with sufficient discipline it will eliminate the above named decision problems. You should never get attached to any idea. Period. It doesn’t mean that you should change your opinion or hypotheses incessantly. Rather it means that you should always be psychologically prepared to abandon an idea if you find that evidence does not support it.

This is more difficult than you think. But so is pole vaulting. Yet, pole vaulting can be learned. This is done by training. And train, you can. Teach you, I will: Next time you are making a decision try the following.

  1. Before you start searching for information write down your hypotheses. That way it will be easier to challenge them
  2. When you research your alternatives write down all the new hypothesis you develop
  3. Make sure to continually test your list of hypotheses in your evaluation process
  4. All previously evaluated alternatives should also be checked against the new hypotheses
  5. Every time you find sufficient evidence against an hypothesis. Strike it from the list.

You can train this on everyday decisions like choosing the right restaurant for you wedding anniversary (yes, it’s not enough to bring home Chinese take away), buying a new TV (we all know you need it) or even finding a new boyfriend/girlfriend (I know, not necessarily an everyday decision, but still..)

Photo by Michael Gil, MSVP @flickr

The Hexagon Framework for Selecting the Right IT system

Companies are wasting millions of dollars every year on failed Commercial Off The Shelf (COTS) system acquisitions. The symptoms are well known: budget overrun, missed dead lines, bad quality and bad client supplier relations. Even when the acquisition project in itself is a success there is no guarantee that the system will ever deliver the expected benefits, because the expectations of functionality were never properly aligned with the business goals.

In order to avoid this we have developed an evaluation framework called the Sensor Six Hexagon Framework. It will guide your COTS evaluation through the most important criteria and increase the likelihood of success for your COTS acquisition. The Sensor Six Hexagon Framework operates with six groups of criteria:

Functionality – This aspect considers how the software is to be used. For example which business processes it is meant to support, the usability and specific functions. The purpose of evaluation here is to ascertain the degree to which the functionality is useful. What does the system do?
Implementation – The purpose of this group is to evaluate implementation process. How long will it take, how big is the suppliers experience and cultural compatibility. Here all criteria related to the project of making the COTS functional are considered. How will we implement it
Risk – As the name suggests the risk group has to do with all aspects of what could go wrong. Is the product immature or is security low? Is the supplier just about to go bankrupt? This type of questions should be asked here.
Strategy – Has to do with a long term orientation for the supplier as well as the customer. The customer might want to consider whether this supplier fits with his strategy, but also whether he thinks that he as a customer belongs to a key segment of the supplier.
Integration – is about how this system will work with all other systems in the enterprise. Is there a well known way to integrate it? Does it have a well defined interface?
Operation – Once it has become implemented how is the systems operational aspects: Support, performance, upgrades etc.

The framework is based on empirical research from 10 client cases of COTS acquisition. They were grouped into successes and failures. Based on what was done in the evaluation process we were able to conclude the following
1) All succesful projects had evaluated criteria from all six groups of the Sensor Six Hexagon framework
2) All failures could be predicted from the failure to evaluate properly before acquiring the COTS system
3) The more criteria and the more thoroughly they were evaluated the higher the likelihood of success
4) No single criterion stood out as the most common cause of failure. Every failure was due to a missing evaluation of a unique combination of criteria

The Sensor Six Hexagon is available as a template in Decision Orchestrator and we also use it in consulting as basis of our Accelerated COTS Acquisition Process (ACAP), but anyone can benefit from it. Contact us for a whitepaper describing how. The benefits of using the Hexagon Framework is larger success rate, quicker decision process, and alignment to your companies strategic and operational goals.