The Decision Strategist

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

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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

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Previously I’ve talked about strategy in 9-11 conspiracy theories, human behavior in the information war and strategy of cooperation versus competition. For this Sunday’s strategic discussion, I wanted to present a scenario from one of my favorite science fiction books: The Moon Is a Harsh Mistress by Robert Heinlein. The book is a great study of a small colony in a unique situation working to establish independence from their rulers. They have no military weapons and little in the way of resources, but they have an artificial intelligence that is sympathetic to their cause.

The strategic lessons in The Moon Is a Harsh Mistress are applicable to any guerilla scenario, and indeed are recognizable by anyone who follows guerilla tactics. All of these tactics are being used by people in Iraq to combat the U.S. Perhaps the next Sunday discussion should involve a discussion of tactics from the point of view of the occupier.

The Scenario

Colonists of the moon, all prisoners or descendants of prisoners, are ruled by the Authority which is appointed by Earth. They are trying to overthrow the Authority and install a severely limited government (remember when there was a political party that advocated limited government powers?). The colony is essentially an anarchy. Few rules are enforced by the Authority except those that generate revenues for the Authority (and hence for Earth). The colony industry revolves around mining, and women are a very small minority.

The important points are:

• The colonists have no weapons.
• If they overthrow the authority, Earth can attack them and there are no weapons on the moon.
• They have access to a friendly AI who controls all computers on the colony.
• There are other colonies on the moon that they must either coordinate with or act alone.
• Earth is dependent on minerals and ore from the moon, which are shipped to earth regularly via a giant gravity catapult.
• Women are a severe minority and are treated with great respect.

The Analysis

The Moon Is a Harsh Mistress is written from the strategic perspective of the colonists trying to overthrow rule from Earth. Anyone who has read the book will know the strategy the colonists use, but we can extrapolate some of the key points here.

• Use the environment to your advantage. There are two ways that the colonists use their environment to their advantage. One is that they use the urban structure of the moon colony to merge with the public and become undetectable. The other is that the moon has a gravitational advantage over the earth. This gives them their only real weapon, which is launching gigantic rocks at Earth. Because of Earth’s gravity, they need only a small amount of fuel to get the rocks falling to earth. It’s a classic example of turning weaknesses into strength by thinking outside the box.
• Exploit cultural differences. The soldiers of the Authority are from Earth, and their treatment of women is significantly different. Moon colonists react violently to the way the soldiers treat women. Creating a lot of opportunities for soldiers to be rude to the female colonists creates animosity.
• Emphasize strengths. The main strength of the colonists is their friendly AI “Mike”. Mike serves as a coordinating center to which different cells of colonists report. In this way no more than one cell can ever be compromised.
• Avoid weaknesses. The colonists are severely underarmed. Direct confrontation with soldiers would be suicidal. Like any guerilla group, the colonists fight small skirmishes and fade into the populace when reinforcements arrive.
• Conserve resources. A major problem on the moon is a lack of resources. Every time the moon sends minerals to Earth, their value decreases. The situation is made worse by the lack of organic material. One of the first goals of the colonists is to institute mineral trading on a mass-exchange basis. Every ton of minerals shipped to Earth must be replaced by a ton of material from Earth.

I’m sure there are intricacies and ideas I’m missing here. As with all posts, I welcome your thoughts and comments. As with all Sunday strategic discussions, I will post a summary of your points in next Sunday’s post.

-zot

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Here is a real-life situation for our Sunday morning strategy discussion:

A friend of mine was planning on attending Law school, and was advised to notify his employer, which he did back in November 2006. Nine months later, he isn’t going, but is looking to move on.

One of the major reasons for wanting to leave the company is that since telling them he was going to law school he has been more or less marginalized and consequently has become demoralized and no longer motivated.

Let’s go back to that fateful day in November…

The Situation

You work for a company that is average. Average in that it pays ok, gives good benefits, looks reasonable on the resume, but is hindered by excessive middle management and organized in a way that actively discourages independent thought and initiative.

You’ve applied to a program or a job that won’t start for nine months. When and how do you tell your current employer that you might be leaving?

The Strategy

I don’t understand why anyone would suggest notifying your employer when there is any uncertainty. Doing so is basically an act of good faith on your part, but with no guarantee (and a lot of evidence to the contrary) that your company will return the favor.

This is a situation between two actors that lends itself very well to a game theory approach.

Your basic choices are to:

1. Give no indication except your two week notice (no cooperation.
2. Notify once you’ve been accepted at the new position (partial cooperation).
3. Notify after applying (full cooperation).

Upon hearing that you are leaving, your employer has the following choices:

1. Treat you like a valued employee, still giving you raises and responsibility (full cooperation).
2. Downgrade your status and marginalize you until you leave (partial cooperation).
3. Fire you (no cooperation).

It’s a three by three matrix with payoffs that look like this (employer choices are in each column, employee choices are in each row):

Job Strategy: Employer in Columns, Employee in Rows

If you don’t know how to read a payoff matrix, the first number in a cell is the payoff to the employee and the second number is the payoff to the employer. Each cell corresponds to the choice made by employee and employer. For example, If the employee cooperates fully and the employer only partially cooperates, the payoff to the employee is -1 and the payoff to the employer is -1.

I doubt the payoffs correspond directly, but they approximate well enough. We can see here that the employee wants fully cooperation from the employer, but he can only ensure that by not cooperating at all (to the greatest cost for the employer). If he cooperates partially or fully, it is in the interests of the employer not to cooperate at all.

Of course, this may change if you trust your employer. I’ve notified my employer of the possibility of my joining the Peace Corps, but that’s because I trust my current director to consider my welfare and recognize that it is in the organizations benefit to keep me involved (and I need her recommendation).

What have all of you done in this situation? How has your employer responded? If you have suggestions for modifying the payoff matrix let me know.

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