The Decision Strategist

SWOT (Strengths, Weaknesses, Opportunities and Threats) Analysis is sort of all the rage in strategic planning these days, and is typically applied in a business setting to strategize about a certain objective. It is also this week’s new decision making technique, though it isn’t explicitly used in decision making as much as strategy. In this case I’m going to apply it on a personal level to analyze my own strengths, weakness, opportunities and threats.

Part of the popularity of the SWOT analysis may come from it’s simplicity. Once an objective is defined, a list of each aspect is created. This list is used to create a strategy for achieving the objective.

Yet that simplicity is also the source of it’s criticism. SWOT analysis has been criticized because it leads people to think they have done an adequate job of planning when all they’ve done is list four categories of aspects. SWOT analysis allows you to consider the factors that are affecting a situation or objective, but doesn’t provide the strategy itself.

One key for a useful SWOT analysis is to make sure you have an explicitly defined objective. SWOT analysis in the abstract tends to contribute to the error of thinking SWOT is adequate and the analysis ultimately has little relevance. Since I’m doing this exercise on a personal basis, here’s my objective:

To move into more creative work based on idea generation and execution in programming and design.

Corollary: Given the tendency for businesses to reward status quo success over creative innovation, it is likely, though not necessary, that this means a startup or freelance work.

With this objective in mind, the first step of a SWOT analysis is to consider the internal factors: strengths and weaknesses. These should be things that are inherent to the person (or company usually) and not things that involve external factors.

Strengths and Weaknesses

The next step is to consider the external factors: opportunities and threats. These are things like political and economic factors, market trends, situational and environmental changes, etc…

Opportunities and Threats

That’s the complete SWOT analysis process, but I hardly have a strategy at this point. I’ll have to work on developing one and post it later. There are some key things to point out here though.

First is that I listed more positive than negative factors when talking about myself and less positive factors when thinking about the external situation. Is this a result of selective consideration of evidence as a confirmation bias, or is it just the truth of the situation? Something tells me that if I was someone else doing this analysis on me I’d find more negative personal aspects.

Second, there are some things I listed that need qualification or explanation. I should start by saying that I need to go back and revise my objective to explicitly say creative problem solving instead of just creative work. When I think of creative work I’m generally thinking of new approaches to problems, not things like art or poetry (not to dis on all you cool artists out there).

Another thing that strikes me is looking at the lists of strengths and weaknesses, I am much more capable of succeeding that I usually think. One of my perennial weaknesses is that I underestimate my ability to program, but as I work with code more and more, I am finding myself naturally learning and able to do stuff I would have recently balked at.

None of my weaknesses seem particularly strong or debilitating. Further, taking advice that I heard from somewhere (maybe The 4-Hour work Week), I’m going to focus on increasing my strengths rather than eliminating my weaknesses. Why? Because the return on investment for increasing my strengths is exponential, while the return to eliminating my weaknesses is (at least in the beginning) linear at best, not to mention demoralizing.

One the other hand, my biggest concern for any advertising-based revenue source (such as this blog) is that a consumer spending led recession, especially with the astronomically high levels of debt, will result in a significant decline in sales of all kind, including ad-based internet sales.

So that’s a SWOT analysis, and it gives me a basis for examining the variety of factors that will affect my failure or success in obtaining my goal. If you’re like me, you’re thinking that it’s rather similar to other decision making techniques like the Pros-Cons-Fixes method used in What am I doing with my life? and Plus-Minus-Interesting used in Buy vesus Rent Part II.

The only real difference is that instead of considering the pros and cons of each option in a decision, we’re considering the pros and cons of ourself or our organization with respect to an objective, and we’re explicitly separating internal and external factors.

If you’d like more information on SWOT analysis, Wikipedia has a nice SWOT Analysis page and businessballs has some good (though garish and terribly designed) information here.

On an entirely different note, why do so many decision making and strategic planning web sites seem like the digital version of a car salesman? There are only two real possibilities here. Either all these decision making techniques are snake oil, or the techniques are ok but the consultant is about as valuable as a car salesman.

Decision making techniques in general seem useful, but don’t do much to account for decision making errors. In a way they are merely the formalization of methods we do implicitly. Though I think there are real benefits to plotting things out explicitly, I’m not convinced of the usefulness of hiring consultants to do so. My suspicion is that there are a few really good ones and a whole lot of ineffectual ones, just like most other fields. More on this later.

-zot

Popularity: 100%

Vote for this post on: These icons link to social bookmarking sites where readers can share and discover new web pages.

Anyone who has worked with statistics, models, or data of any form has probably run into the situation where someone wants a measure for something regardless of how useful that measure is.

Maybe it’s some version of the conjunction fallacy or other decision making error: A number gives us confidence regardless of how useful the number is.

Or maybe, like valuing the status quo over innovation, it’s a liability issue. Workers and managers want to be able to cover their own ass if something goes wrong. In such cases it’s always better to have some numbers, regardless of how applicable they are.

My bet is on the second reason, and it’s ruining the world.

Take an abysmal measure of inflation: the CPI. Granted inflation is a difficult thing to measure, but there are several bad problems that only make things worse.

The same goes for GDP, unemployment rates (or here or wikipedia) and basically any other measure of economic activity.

But maybe other disciplines aren’t like that? Don’t bet on it.

A friend of mine who is an accountant says that there is enough error and flexibility in accounting rules to make most balance sheets suspect. Consider the value of goodwill and brand value (look at that equation).

Measures of worker efficiency, political polls and statistics in scientific research all have regular problems.

Earlier I was talking about ourreference and discuss our tendency to slap a measure on everything, but the effect is that it causes us to shift our focus to maximizing the measure rather than what we really want.

As a policy analyst, I run into the ‘a garbage number is better than no number’ mind frame regularly. Government officials and big companies, the havens of bureaucracy need a number to justify their decisions. They need something to protect themselves if something goes wrong.

The problem isn’t really that we want to rely on numbers. It’s that we’re making big, important decisions based on numbers that have high measures of error at best or are just plain irrelevant at worst.

Our desire to cover our own ass is causing us to make bad decisions. In complex, important decisions the situation is always more nuanced than the reduction to measures indicates. But we can’t cover our ass if we make a decision based on a judgment call after considering all the complexities of the situation. That is an opinion and is open to dispute.

Yet what do we miss by relying on approximations so heavily? We miss all the subtle implications of the situation that can’t be measured easily or that get lost in the aggregation of data.

We often forego the time and effort of gaining a deeper understanding of a decision in the name of cost and efficiency. For small decisions it might be worth it to search less and ignore more information. But for large policy decisions it is almost certainly worth the effort of getting more information.

So to conclude this long rant (my apologies), lets reflect a bit on the importance of considering things that can’t be quantified, interactions that can’t be written down in a list, and factors that may only be known to us subconsciously.

Our reliance on numbers as the ultimate truth is ultimately misguided.

-zot

Popularity: 17%

Vote for this post on: These icons link to social bookmarking sites where readers can share and discover new web pages.

Our natural tendency when facing a decision is to gather as much information as is easily available and evaluate our options in light of that information. But because we have limited processing power and can only hold between 3 and 7 concepts in our mind at any given time, we can only evaluate a few bits of information. Unless we are using a decision making technique to keep track of all the information, we can’t possibly consider all the relevant factors.

So here is a simple decision making technique for making better decisions:

Ignore Everything But the Three to Five Most Relevant Factors

That’s it. Just consider the three to five most important factors in the decision and ignore the rest of the information. Why? Because if you don’t have the time or desire to plot out and list all the relevant information, you will be unconsciously eliminating everything else anyway.

Consider the benefits of ignoring excess information:

• It takes less time. Information takes time. Knowing that you can only factor in three to five things means you don’t have to spend extra time trying to find information or worrying that you aren’t being responsible. At some point gathering more information has serious declining returns to scale. That point appears to be after roughly five pieces of information.
• Confidence isn’t overblown. More information has the curious effect of making us more confident in our decision without increasing our ability to choose the best option. If we only factor in a few pieces of information, we are more open to hearing other points of few and less personally invested in the ‘correctness’ of our decision.
• Less confusion. Excess information not only makes us more confident, it also has the potential to confuse us so that we can’t decide what the most important pieces of information are. As we start to exceed our natural limits, our mind responds by shutting down reasoning pathways and leaving us a befuddled mess.

I’ve often thought that people who have trouble making decisions (and not just because they are trying to choose the ‘nicest’ option) are hindered by an inability to exclude information.

Not that you won’t ever make an error doing this. But the underlying thesis here is that it is better to make a bad decision and realize that it’s wrong and take steps to correct it than it is to spend a lot of time trying to figure out what to do and then making a decision that isn’t likely to be any better.

-zot

Popularity: 9%

Vote for this post on: These icons link to social bookmarking sites where readers can share and discover new web pages.

This Sunday’s strategic discussion is a little late due to pesky internet problems. Last Sunday’s strategic discussion covered strategy in conflicts where one force is vastly out-gunned. This time we’ll focus on something a little closer to home for most of us: The strategic value of meetings.

Those of us who enjoy being productive share a common hatred of meetings. They are costly and produce very little obvious value. I regularly take work to meetings so that I can think while people are talking. But I read an article recently at Overcoming Bias that made me rethink my approach to meetings.

The main argument of the article is that meetings are not effective from a productivity standpoint, but they are important from a social standpoint. Meetings let us form alliances, assess confidence, and determine heirarchy.

My Old Meeting Strategy

Till now I have generally approached meetings as with a”too cool for school” attitude and image. I bring work so that I can write and think while people are talking. I stare out the window. Occasionally I crack a joke. Generally I don’t have strong opinions.

This strategy may seem self-destructive, and probably is, but it has been my attempt to deal with what I feel is a waste of my time. Meetings generally aren’t run efficiently and endlessly hash over old topics. In my current job they are basically used as a way to disseminate information from the Director. Something that could better be handled with an email.

But if the real purpose of the meeting is to determine social factors. Might I want to approach things differently? In life I have found that doing the hard thing almost always results in honest participation from others. In this case, the hard thing is to engage directly and openly in meetings, even if I feel like they are a waste of time.

New Meeting Strategy

Any good strategy needs an explicit statement of goals. Making use of social work in meetings, my new goal is to become central to discussions and the decision making process of the organization. There are two basic strategies, I’ll call them manipulation and compassion, that I could use to approach this, but only one that I think is likely to succeed.

A manipulation-based strategy in this case would involve making other people look bad by pointing out errors and generally speaking in a derisive tone. While this approach might gain me some measure of authority, it would only lead to resentment on the part of coworkers and dislike on the part of managers. No one likes someone who is rude and lacking respect.

On the other hand, a compassion based strategy would involve validating people’s work and point of view while not necessarily agreeing with them. By treating others with respect, I gain their respect and as I take part in more discussion would become increasingly relevant to decisions that need to be made as an organization. To that end, these are the major points I’m going to try and follow:

• Contribute in a useful way to each topic of conversation that is brought up, but without being derisive. This will be difficult because often I feel like people are repeating questions, preaching, or otherwise taking up verbal space with meaningless noise. The trick here will be to respect someone while trying to minimize irrelevant discussions.
• Be willing to confront issues that everyone is avoiding. This may not be popular in the short term, but hopefully over the long term bringing up difficult issues will encourage more genuine discussion.
• Endeavor to change the perception of the meeting to be more of an exchange of information instead of a top-down dissemination. This means I will have to have valuable information to convey at each meeting. Hopefully my bringing up information can snowball into other people also bringing up information.
• Create a strike team of coworkers who are effective and productive and shift their perception of the meetings. This group can serve as the core that further shifts the behavior of other workers. To some extent I already have this, but though the group is effective, efficient and possibly the most productive group of employees, right now we identify more as mavericks than as the core of the organization.

To often we view a situation as hopeless or unchangeable. Our organization faces serious problems of motivation and productivity, and a strong fear of confronting anyone about failure. Over the past two years, I have essentially accepted this situation and worked to set myself apart from other employees who are ineffective and unproductive. But perhaps the better and more noble approach is to engage the community directly and work to change the situation and improve both moral and productivity.

I’d be interested in hearing what strategies you use to cope with useless meetings or how you go about creating effective meetings. Both are important and useful skills.

-zot

Popularity: 10%

Vote for this post on: These icons link to social bookmarking sites where readers can share and discover new web pages.