How to make good decisions in times of crisis.
'Stress leads to deficits in good decision making'. (Maier, Makwana & Hare, 2015).
Is your state of mind prepared for making the best decisions in times of crisis?
I have a client, Jerry, who broke down in tears, over the phone, worried his whole business was about to collapse. His sales were down, customers wanted their money back, he only had enough in the bank for a couple of months, and he didn’t think he could keep paying his people. Jerry was in crisis!
If you can relate to this story, then rest assured you are not alone.
Maybe you are an employee, concerned about whether or not you’ll have a job next week or how you will pay the rent or how you will cope if you are unemployed for the first time in your life.
Maybe you are a manger in a company sitting in endless emergency meetings discussing contingency plans, planning how best to maintain some level of business continuity and debating over which staff to keep and which to stand down.
This is a time of unprecedented volatility; it brings to my mind the VUCA model developed by the military for use in war times. VUCA is an acronym (Volatility, Uncertainty, Complexity, and Ambiguity) referring to times when leaders make decisions in a volatile, hostile environments; dealing with constant change; when there is a lot of uncertainty; when issues are complex, there are no simple answers, only ambiguity. A stressful time to make decisions.
Neurological and psychological studies about stress provide insight into how limited our decision-making ability becomes when our mind is faced with a crisis. These studies suggest our thinking becomes very narrow. We tend to focus more on the negative and highlight all the problems without giving any real focus, concentration or attention to finding solutions, i.e. we catastrophise and feel helpless.
When we catastrophise we often react and make quick decisions before considering all the options or the consequences of these decisions. Afterwards, during implementation, we lose time and energy trying to fix the negative flow on effect of our quick decisions, and then, just as quickly, we change the decision which, in turn, causes people to become confused and to lose trust in us as a leader.
It is also common in a crisis, when under stress, to make unconscious bias decisions. One example of this bias I am hearing right now in a few of my leadership coaching sessions is this: “people can’t be trusted to work from home”. Most times, this is based on an example of one person not doing the right thing and the leader generalising this one example to define all people. The result: “See everyone is doing it, we can’t trust any of them!” This generally leads to people feeling frustrated and angry because they do not have the leaders trust.
Feelings of frustration and anger are common during stressful times. Unfortunately, some people don’t know how to appropriately control their feelings and so they take their frustrations out on others. They lose control.
This lowering of emotional control has a negative effect on our ability to make clear and rational decisions. We hate feeling out of control, so we make decisions to take back control, to control our work or home. Here are a few examples of how we might make decisions when that happens:
· We yell and decide.
· We don’t want to feel stuck or helpless, so we decide without a plan.
· We make decisions without consultation with colleagues.
· We make decisions without talking to our partner or family.
· We take control over people’s lives, without their consent, to preserve control.
A decision-making process
Fortunately, there is another way. The Australian Government has completed extensive research into this area and has produced a practical guide on how to make decisions in a crisis. The guide recommends you create a decision-making process like the 6-step process illustrated below.
1. Confirm authority and roles:
Create a process that encourages open debate, brainstorming, checks and balances for bias, and clear decision-making authority and delegations of roles to people.
2. Establish psychological safety:
Leaders need to create a psychologically safe place for their teams. Feeling you are in a psychologically safe environment, where you can express your opinions and voice any concerns is important for clear decision making during a crisis. Establishing psychological safety is the second phase in the Australian Government decision making process.
(Source: Decision making during in a crisis, a practical guide - Australian Government 2018).
3. Use explicit and tacit knowledge:
The third step in the process is to ensure you are using both explicit and tacit forms of knowledge building.
To help creating explicit and tacit forms of knowledge, here is a communication model developed for this purpose.
(This illustration of the SECI model of knowledge sharing was developed by Nonaka & Takeuchi 1996)
Tacit tools include brainstorming, immersion tools or appreciative inquiry methods to explore, share and develop your contingency plans. Brainstorm without criticism. Write it down and then create metaphors and models that other people can quickly understand and use to help them in the crisis.
4. Manage expectations:
One of the biggest challenges you will face is managing expectations. This is the fourth phase of the decision-making process. You must manage your own expectations first, then your employees, family and friends.
A lot of our expectations of a normal everyday life is changing. How do you explain to your children: “Sorry, kids the holiday to Movie World can’t happen, instead we all get to spend the school holidays at home, and no you cannot go over to a friend’s house or meet them at the beach or go to a shopping centre. On top of that, Dad and I will both be working from home, for the next few months, so you can only watch Netflix at night - after we finish work - as we will need the
Wi-Fi for virtual work meetings.”
Discussing each other’s expectations, needs and priorities in a crisis is helpful and is most impactful when you create a new set of expectations and priorities together.
A good technique to use is the stop, keep, start method:
What will keep happening?
What will we need to stop doing?
What will we need to start?
5. Managing cognitive bias:
To help reduce bias always check your decisions and plans with others. Brainstorm and make a list of pros and cons – all these steps can help ensure you are making the best decision possible in the circumstances.
6. Finally, record the decisions.
During implementation we need to accept that mistakes will be made. Be open to changing your decisions and re-record the latest decisions for all to follow. This agile way of thinking is helpful.
It helps to have a growth mindset as this allows you to be flexible, agile and move quickly between changing circumstances.
Psychologist Carol Dweck’s (2017) studies into a growth and fixed mindset showed that when we have a growth mindset, we are less stressed, able to adapt quickly to change and able to cope with uncertainty and volatility.
By being willing to see a crisis as a challenge we can confidently explore and find solutions. By accepting the new and being prepared to learn new ways of doing things, we can move on from old ways and discover new ways to connect and work together.
We can:
· See our team each day via Zoom, Microsoft Teams or face time.
· Trust people to work from home.
· Offer vouchers to our customers so they will come back to use us when all the crisis passes.
· Deliver our products and services in other ways.
· Take time to play games with the children.
· Share funny memes on social distancing.
· Read about how to cope and maintain mental health when self-isolated.
· Sing happy birthday whilst washing our hands with soap.
· Tell yourself: “I’m going to be ok; we are going to be ok!”
In that state of mind….let’s go make some great decisions.
References:
Australian Government (2018) Making decisions in a crisis: A practical guide, Critical Infrastructure Security Division, Home Affairs.
Dweck, C. (2017) Mindset: Changing the way you think to fulfil your potential. Random House.
Farnese, M.L., Barbier, B., Chirumbolo, A. & Patriotta, G. (2019), Managing knowledge in organisations: a Noanaka's SECI model operationalization, Journal of Frontier Psychology.
Maier, S.U., Makwana, A.B. & Hare, T.A. (2015) Acute stress impairs self-control in goal directed choice by altering multiple functional connections within the brain's decision circuits. Neuron. 2015:87(3):621-631.
Rice J. & Rice, B. (2015) the applicability of the SECI model to multi-organisational endeavours: an integrative review, International Journal of Organisational Behaviour, Volume 9 (8), 671-682 - (reference to Nonaka & Takeuchi, SECI Model, 1996).