The Decision Strategist

As what is essentially a research consultant, I run into a fair amount of joking, nudging, and winking when I start to talk about ’surveys’ and ‘focus groups’.

Fortunately I work with data and statistics, so I get to claim a little bit of distance from the more laughable methods.

Regardless, it has me thinking about how consultants are generally perceived and very expensive and ineffectual. I think the idea of hiring someone to research and evaluate a problem or policy, though it has it’s issues, isn’t inherently bad. The methods themselves are terribly bad. It really comes down to one thing:

A few consultants are exceptionally good and the rest spend a lot of time surfing the web.

It’s true of any industry that there are a few exceptional people and/or businesses and the rest are mediocre, but with consultants the mediocrity is easily visible. The problem then isn’t that all consultants are hacks, but that it is difficult to tell whether a consultant has done a good job.

In other words, the signal to noise ratio (Paul Graham) is poor.

There are copious examples of situations with a poor signal to noise ratio (SNR). Consider the employer trying to figure out if the employee is working, the lender evaluating a potential borrower, regulators eyeing a company and any application process such as for school, work, Ycombinator, Peace Corps, or hiring a babysitter.

If you have a background in Game Theory, you might notice that poor SNRs tend to exist in a principal-agent situation. A principal-agent situation is one in which one person/organization has something and the other person/organization wants it. The possessor (the principal) has to decide whether to give it to the desirer (the agent). A poor SNR exists because the agent is always motivated to present themselves in the best light possible, and so the principal has to do their best to see through the presentation to determine actual quality. In other words, the agent is actively reducing the SNR.

So back to consultants. The mediocre consultant will choose to purposely increase the amount of noise in the presentation of their work because they realize that 90% of perception is how you look and not what you say (to cite an irrelevant and entirely made up statistic). Further, it is easier to increase the value of your work by making it look spiffy than by doing better quality work (to a point).

From the point of view of the person who hired the mediocre consultant, they have little incentive to attack the consultants work unless it is obviously shoddy. The hirer doesn’t want to be the person who hired a bad consultant, and so will only attack the consultant’s work if it is obviously shoddy.

Is it any wonder that the industry as a whole is a joke?

The consultants holy grail is to discover the aspect that separates excellent consultants from mediocre ones and make that the center of their work. It also has to be easily discernible but not easily faked.

Somehow I think the only thing that qualifies is thorough hard work.

-zot

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Today is Sunday, which means it’s time for the Sunday Morning Strategic Discussion (I’ve really got to work on getting it done before noon). Bait and switch tactics are used all the time in politics today, and there was a great example several days ago with the reaction to the Moveon.org advertisement about General Patraeus.

A bait and switch in retail is when a business offers a product at below cost, but then says the item is out of stock and offers a different item at a higher price. It works because people are willing to pay a higher price to overcome the disappointment of not getting the original item.

In politics the bait and switch is when a group makes a big deal about an issue to shift damaging attention away from themselves. It almost always works.

The reason it works is because the switch issue chosen is something that can be framed in terms of principles that are universally held. In the General Betray Us issue, the Republican party tends to choose an issue they can frame in patriarchal terms such as respect, responsible, morality, honor, and hero. No politician wants to be seen as against those issues.

Democrats tend to choose issues such as Bush’s veto of child health care, that can be framed in terms like giving, caring and children.

Clearly neither party wants to tackle the most important issue at hand, which is getting the US out of Iraq. There are plenty of voters who no longer want us in Iraq, but not a lot of people who think it is a good idea to pull out and leave the country in shambles.

It’s an intractable problem, and the people that come up with a strategy to fix it will gain a lot of political capital. Only there may not be a solution. If history is any guide, occupying forces only succeed if they are ruthless enough to commit virtual genocide and maintain total control over information (such as China in Tibet), a tactic that few in the US or the rest of the world would sit still for.

I don’t have a strategy for getting out of Iraq, and in my experience most people have nothing to suggest. Difficult though it may be, I think it’s time we started to consider solutions. Let’s start with goals. Part of the difficulty of the situation is that we don’t share common goals. Depending on your political leanings, you may think our current goal in Iraq is any or all of the following:

• Fight terrorism
• Ensure cheap access to oil
• Spread Democracy
• Stabilize the country enough to leave
• Ensure global dominance

And many more I’m sure. Our views are so disparate on this subject that there is little wonder we have no coherent strategy for what we are doing in Iraq.

Every analyst of the Iraq War focuses on what is wrong in Iraq, but I have a different take that people don’t want to hear: we won’t be out of Iraq until we fix our own problems. Most importantly, until our fractured nation can arrive at some common ground.

Let’s start by looking at some alternative points of view. If you’re conservative, consider reading these posts:

• Common Dreams
• Develnet
• Scott Teresi

If you’re liberal, start with some of these links:

• Right Wing News
• Conservative Voice
• Clarion

And then there’s the libertarians:

• LewsRockwell

Pretty crazy isn’t it? We will not be successful in Iraq until we reconcile these views. It may not seem like a big step, but until we have a common goal and reason for our existence in Iraq, we cannot begin to measure success or failure there, or determine how and when we should leave. There can be no real strategy.

If you have ideas about a strategy for Iraq, or a reason that you think we’re in Iraq that I missed, let me know. As always, I’ll post your responses next Sunday.

I’m tired of listening to both parties as they jockey to place blame. It’s time to shift the dialogue towards a solution.

- zot

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In response to last Sunday’s post of the strategic value of meetings, Bob weighed in with a couple of other suggestions

Discuss (in a personal meeting) with the people in charge of the meetings what their goal and ajenda is, and if they are open to hearing from me lay out a non-emotional, non-judgemental list of what I think could improve the meetings based on what their stated goals are;

Give my input about what I think would be a better use of company time/resources demonstrating what the pay off is from my persepctive;

Depending on my standing in the pecking order, employ skills to help focus and move things along, or keep a low profile;

Try to maintain collaborative and positive relationships with as many co workers as possible;

Finally, if I can’t find the leverage to shift the culture from toxic to productive, I get very busy trying to learn why I missed the true nature of this company when I was deciding to hire on, develop a job search strategy, and get out of Dodge. Life is too short–and too full of opportunities–to waste it where I don’t fit in, there is a lack of focus and teamwork, and mutual respect is lacking.

Bob brought up a couple of good points that I hadn’t considered. First is that if you have a good enough relationship with the people who run the meetings, you can meet with them directly to discuss the value of meetings and your ideas for improving them.

Second is that the quality of management can have a lot to say about the organization itself. If the meetings are poorly run, what other ways is the organization wasting your time or holding back the development of your skills?

It’s definitely something to think on. In today’s world it seems like no one (in my generation) stays at a job more than 5 years or so. What is the optimal length of time and how do you decide when it’s time to move on?

I’ve generally used the rule that when you are past the peak of learning and growth you should start to look elsewhere, but the location of that peak has as much to do with the individual as the company. Perhaps passing the learning peak is a sign of personal complacency more than limited options.

That’s it for this mornings ponderables.

-zot

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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

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