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The Value of Communication in Team Decision-Making

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The Value  of Communication in Team Decision-Making
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The Value of Communication in Team Decision-Making

To most of us, understanding the inner workings of decision-making may appear like a complicated task. How do you even do that with a process that’s so hard to measure or express in hard numbers? How do we know that we’ve made the right decision at the right time? Well, we can’t, just because there are so many things that can affect the outcome of a problem—organizational structure, past experiences, cognitive biases, and so forth.

However, that is not to say that there aren’t ways to confidently improve the quality of a team’s decisions. On the contrary, according to research, the path to better decision-making lies through effective communication. And this is precisely what this blog post is all about.

Let’s dive right in, shall we?

What is decision-making

What is decision-making?

The process of decision-making has been extensively studied by a wide array of disciplines, ranging from mathematics and sociology to psychology, economics, and beyond. Philosophers try to understand what our decisions say about us. Historians scrutinize how leaders choose to act in moments of pressure. Organizational behavior attempts to understand what people within a company can do to achieve better outcomes.

As employees, we make dozens and even hundreds of conscious and unconscious decisions on a daily basis that have a massive effect on a company’s success and overall performance.

There’s also great diversity in terms of the types of decisions we make. On the one hand, we can categorize decisions based on the effects they have in an organization—they can be strategic, tactical, and operational. The first are the ones that set the course of a company. The second has to do with how things will be done. The third are the ones that employees make to keep the organization running.

On the other hand, we can think of types of choices based on the way they are made. Some people like to follow their gut, which pretty much relies on intuition to guide them through a complicated situation. In contrast, others choose a more analytical, thoughtful style of business communication and decision-making.

And it’s fair to say that both have their merits and shortcomings. When people follow a more intuitive path, they often fall prey to cognitive biases, logical fallacies, and so forth. However, an analytical and calculated style may not at all times be applicable, especially when people find themselves in situations with no precedent—this is where leaders should follow their gut and make choices that “appear” right.

The point of this post, however, isn’t to defend or attack any particular type of decision-making. Instead, we’re interested in bringing the people that surround a leader to the front and underlining the value of effective team communication while deciding upon important outcomes as a collective.

And to make a stronger point, we’ve got some research to back it up.

What does research have to say

What does research have to say?

Dan Lovallo and Olivier Sibony are behavioral economists who have conducted a five-year study that documented and analyzed 1,048 business decisions and how they affected the organization’s revenue, profit, and market share. The main idea behind the study was to understand how people approach making complicated business-related decisions and surface the kinds of biases managers are most susceptible to.

More importantly, this study didn’t take into account minute issues like the line of stationery a company should buy—these choices revolved around critical problems such as whether a company should expand into a new country, make changes to the organizational structure, or release and develop a new product or service. The study also thoroughly analyzed the outcomes of this decision and how they impacted ROI, profit, and a variety of other essential parameters.

The researchers also tried to understand how managers made important decisions and what the process was like.

A few questions they asked the participants of the study were:

  • Did managers consider more than one viewpoint?
  • Were managers open about the things they were uncertain about or the things they did not know?
  • Did they request the participation of people that had opposing viewpoints on the course of action or outcomes?
  • Were they open-minded about seeing evidence that contradicted their standpoints?

The findings

The study found that while a more analytical and data-oriented approach is always useful, having a well-optimized decision-making process typically yields far better business choices. Basically, high-quality data and experienced leaders are an awesome combo. Still, it’s not enough if the decision-maker didn’t challenge their biases and hear a broader spectrum of opinions that differed from that of their own.

Bias seems to be a severe problem that harms the quality of a business’s decisions. The main reason is that having access to a diverse set of opinions will allow a team to surface low-quality analysis. The reverse, however, is not true. The highest-quality analysis is pretty much useless if differing opinions aren’t given a chance. Fundamentally, as a manager, if you refuse opinions that are different from your own, you’re creating an echo chamber that will most likely harm your organization in the long run.

And most likely, there’s no way to overcome the tendency to jump to narrow or reactive conclusions without consulting a broader group of specialists. This is typically the best way to overcome the so-called “recency bias” that often lures managers and decision-makers into putting a stronger emphasis on recent events and losing sight of the big picture.

It’s safe to say that mere openness to hearing differing opinions isn’t enough. Managers should seek to have their opinions or decisions challenged by asking a variety of questions that will aim to disconfirm their standpoint like:

  • What could go wrong if we do this?
  • What is the biggest potential obstacle you can see in the solution we have proposed?
  • If you follow my proposed approach, what might happen that we haven’t thought about?
  • What haven’t we considered? What are we missing by taking this approach?
  • If we follow this plan, what problems might arise?

Improving your team’s decision making

Improving your team’s decision making

We recognize that saying “just hear differing opinions” might be a slightly simplistic strategy when it comes to making critical decisions that have a massive impact on an organization and its bottom line. Here’s a more detailed breakdown of how managers can counteract echo chambers and open up to better choices.

Focus on the problem first

Superior communication and team decision-making starts with proper framing of the issue at hand. Often, the way a problem is presented to a team happens to be presented in a way that boxes people into a small number of solutions.

Research suggests that nearly three-quarters of the time, management teams only explore one alternative before making a decision while having more than one would dramatically improve the outcomes.

Normalize disagreement

As social animals, we’re inclined towards agreeing with what our peers or superiors say. This bias is often very harmful to the quality of the decisions made in an organization. It’s essential to normalize critical thinking and active participation in conversations for professionals of all seniority levels.

Back in 2011, Larry Page returned to his CEO position at Google, and one of the things that he intended to change as soon as possible is the so-called “consensus culture” and, as a result, boosting the efficiency of decision making. An important part of this strategy was to ensure that every meeting has to have both a decision to be made and a designated decision-maker; otherwise, the meeting shouldn’t happen at all.

The reasoning behind this is rooted in the idea that overarching agreement typically makes things rather slow. While taking more time to make a decision does provide you with a more analytical and in-depth view of the problem, it also opens you up to missing opportunities, especially in fast-paced environments.

Therefore, the best way to approach complicated business decisions is opening up to a broad spectrum of opinions, assessing the benefits and downsides of each, and doing so reasonably quickly.

Tools for group decision-making

Tools for group decision-making

Using a framework or model for decision-making can help your team reach an informed, actionable decision while avoiding some common obstacles.

The ladder of inference

As we mentioned previously, removing bias from decision-making is absolutely essential, and it’s much easier to do this when you have a framework available. A great tool that will help you achieve better group reasoning is the ladder of inference. This method allows you to structure problem-solving in a sequence of steps that range from receiving data to drawing conclusions. Here’s a brief breakdown of the process:

  • All the participants of the meeting should analyze the problem through the data that is available to them, both qualitative and quantitative.
  • Each person should identify data points that they find important or that simply grab their attention and, for the time being, ignore everything else.
  • All the participants should aim to interpret the data that caught their attention.
  • As a result, you’re able to draw conclusions that step from these interpretations.

This is an excellent framework that will both reduce the amount of bias the decision-maker is exposed to, as well as help them gain access to a broader range of opinions.

The nominal group technique

An excellent tool for including all the team members in the process of decision-making is the nominal group technique. It’s a brainstorming method that enables all the people in a collective to participate in problem-solving and express their opinion on the importance or validity of particular solutions.

Basically, all the participants of the meeting should come up with a solution to a problem that needs to be addressed. All the decisions are then voiced, discussed, and voted on. It’s important to mention that you can always tailor and adjust this technique to suit your needs.

The RAPID model

The RAPID model enables teams to distribute ownership over different facets of the decision-making process. There are five roles assigned to different employees:

  • Recommend
  • Agree
  • Perform
  • Input
  • Decide

The bottom line

Good decision-making lies at the heart of a business’s success. While managers are responsible for the decision they make as a leader of a team or department, that doesn’t mean that they have to disregard their colleagues’ input. Being afraid of hearing opposing opinions will only hurt the organization’s bottom line in the long run and prevent them from making good choices.

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