21 September 2015
One of the things that I try to pass on to others is the art of decision-making, blogs John Bowen.
It is something that began to fascinate me as I moved through the ranks of management and began to recognise the differences between managing and leading and is something that I am still wrestling with.
We talk about performance management, the "if you can't measure it, you can't manage it" school of thinking, and while this is correct in many ways it is also flawed. The old industrial school of thinking where production was ongoing and you could measure output visibly was the breeding ground for time-and-motion studies that later rebranded themselves as organisation and method studies, among other names (those that such practices were inflicted on had their own names for them too).
Such performance measurement relies of factual data and there are many sectors where performance can be managed in this way. Much of my professional background is in logistics and supply chain management. Nowadays, the power of technology means that passing a product's barcode in front of the scanner at the cash register can drive the supply chain way back past the warehouse and through to the production of the consumables involved in packaging the item, let alone the contents of said packaging.
But all of this assumes that the numbers being used are true and while in a retail environment they will be very accurate indeed, there are other areas of management where the truth is much more elusive and comes down to what we believe to be true more than anything else. This is why we still need people to use their experience, judgement and risk appetite to make decisions.
What is truth anyway? In most cases it what we choose to believe and even numbers can be presented so as to be misleading; lies, damn lies and statistics anyone?
What can you believe? That will depend on where you are getting the information from, how complete it is, and whether or not you choose to trust the data and its source. Recently I was working with a client on deciding what piece of equipment to buy and one element of the process was a financial appraisal of the options. A spreadsheet had been used to calculate the NPV (net present value) for each option, but there was something that didn't look right to me and so we checked.
The spreadsheet was wrong. Why, we weren't sure, but the person who set it up had used the NPV plug-in and perhaps somewhere in the way that they did that they inadvertently corrupted the calculation. It didn't make any difference to the ranking of the options, but it did give a false figure for each of them, and the client had been using that flawed spreadsheet model for three years: People trust things that they believe to be true.
When we need to make decisions we need to use the best information that we can make available and use our judgement, but we should always be prepared to test the things that we hold true. In many ways there are no right or wrong decisions; the outcome of our decision is usually judged after the event, often some time after and we can all make very good decisions with that benefit. The key to decision-making is often just the ability to make one and not to dither - and that is where the better leaders start to really earn their crust because it takes courage.
The truth will be whatever each of us decides it is.
John Bowen is an FM consultant