Making Complex Decisions: Structure, Engagement and CommunicationBy Niels Versfeld | Fri, 10/08/2021 - 13:06
Today more than ever, business leaders and their teams face increasingly complicated decisions. Within drilling, operations are more complex physically and virtually. To add to this, the number of stakeholders we engage with has increased dramatically. This trend toward increasing complexity is impacting most industries. The current vogue has been to assume that mountains of data will provide solutions to our problems. However, the critical point is how we use this data and other sources of evidence to make good decisions. Since the evidence itself is not the solution, leaders need to learn how to use the best available evidence to make unbiased decisions.
What is a complex decision? The Stacey Matrix defines a “complex” decision as one where there is very little agreement among stakeholders on what the goal is and very little certainty on how to achieve that goal2. Sound familiar? Decisions such as these require structure, engagement, and communication to turn the evidence they gather into decisions and actions.
Decision-making requires a structured process to reduce human biases. If the problem is well defined and understood, then routine processes and answers make sense. However, complex problems require consideration to define the problem before attempting to solve it. Albert Einstein famously said, “If I were given one hour to save the planet, I would spend 59 minutes defining the problem and one minute resolving it.”
One easy way to define the problem is to use the journalist’s five Ws: Who? What? Where? When? and Why? After you have defined these, try to change your perspective on the issue. Look at the issue from up close but also from afar. What is the larger picture that the problem is part of? Is the issue similar or different to other issues? What issues are critical to address? Once we have defined the problem, what approaches have been taken with these types of problems in the past? At this stage, companies need to engage stakeholders to ensure the problem is defined correctly, and that potential blind spots are identified.
Complex problems often exceed our individual ability to understand them and we tend to approach them with preconceived notions and assumptions. Therefore, engaging others, especially those outside your company, helps reduce blind spots when assessing issues and creating possible solutions. What is known about the issue now? What are the issues that people are struggling with and what future issues have people not yet addressed?
Many of us increasingly reach out to colleagues and practitioners to help define a problem and company information is a rich source of evidence that can be mined. If the problem isn’t well known by you but well known by others, then consultants often are a good source of evidence. An often-overlooked aspect in business is to engage with the academic literature for the thoughts and problems being examined. What is this evidence logically telling you? What parts of the evidence are different than you assumed? Once you have a better appreciation for the problem and current approaches you will be better positioned to consider all the evidence and create the best answer. Cordax Evaluation Technologies, a sister company to Simmons Edeco, has used engagement with many parties to help develop innovative new tools and solutions for formation evaluation.
A good decision is of no value if it cannot be communicated and followed through. We need to spend time beforehand thinking about who the decision will impact and how the decision will be communicated. Two-way communication is required to build a common understanding around the problem and solution. Again, engagement with different stakeholders early in the definition process and while making these decisions will help ensure alignment. At Simmons Edeco, this approach has helped us to create innovative, multiple party agreements with our customers, financing affiliates and fellow service companies.
While structure, engagement and communication cannot ensure that every solution will be 100 percent correct, they can ensure you have made the best decisions possible given the circumstances. The world doesn’t appear to be getting less complex and the organizations that can deal with this complexity will be the leaders of the future.