Decision-making in times of uncertainty
We make decisions all the time, from moment to moment. Many are easily, almost unconsciously, made. Others keep us awake at night.
What is it about different types of decisions that makes them easy or hard?
Where decisions are easy, the course of action is an obvious one — or the outcome is of little importance. If I am choosing dinner in a restaurant I know that I like risotto and even if that choice produces a bad outcome it’s no biggie - it’s only one meal.
Where decisions are hard, it’s not obvious which action will produce results that you will be happy with and the consequences of the decision may have a large impact.
Reactions to uncertainty
Uncertainty is something that can make us feel nervous, especially when the stakes are high. Often, we will look for ways to reduce that uncertainty, and to reduce the risk of the outcome. This can manifest through planning, research, consulting an expert. Sometimes this is effective, but sometimes no matter how much advice or information you accumulate you still feel just as uncertain. You can get stuck in analysis paralysis, where you keep analyzing but the uncertainty doesn’t diminish and the risk of a bad outcome remains high.
Understanding the nature of your decision
There are a number of different contexts in which you may need to make a decision. These contexts can be characterized using the Cynefin framework (it’s Welsh, pronounced kuh-NEV-in).
Obvious
The situation is straightforward, a solution already exists and everyone knows what the Best Practice is. Your approach in this case is to:
Sense → Categorize → Respond
Example: Parking your car in town.
Sense = What shape is the parking space? What objects surround it?
Categorize = Is it a side-by-side space or a nose-to-tail space?
Respond = Drive in forwards/backwards or parallel park. There is really only one way of doing it (OK, handbrake turn in is an option, but I never use it myself).
Complicated
A complicated situation is where everything is ultimately knowable, but you may not know all the details yourself. In this case you can spend time getting yourself up to speed or consulting an expert. This is the domain of Good Practice. Your approach is:
Sense → Analyze → Respond
Example: You want to work for yourself, how should you set up the business?
Sense = You gather information about being a Sole Trader, a Ltd company and so on.
Analyze = You look at your personal needs and assess which one is best for you. Maybe you talk to an accountant to get advice.
Respond = You pick an option and proceed. There were a number of options that could have been suitable but you found your preferred one.
Complex
A complex situation is where there are some aspects that cannot be known, and therefore, doing the same thing twice could result in different outcomes. Your actions sit within a dynamic system where no matter how much information you gather, it would be impossible to guarantee that an action will cause a predictable effect. I’m betting that if you ever felt analysis paralysis it was because you were in a complex situation.
This is the domain of Emergent Practice. You try safe-to-fail experiments to help you gather more understanding about what works and what doesn’t. Gradually, you discover patterns that help you become more effective. Your approach is:
Probe → Sense → Respond
Example: You are writing a comedy routine .
Probe = You put together some material that you think could work, you try it out at a low-risk event.
Sense = What do people laugh at? Is there any pattern emerging?
Respond = You try changing some things to see whether it gets more laughs. You repeat the process, learning as you go.
Chaos
A chaotic situation is one where events are “too confusing to wait for a knowledge-based response. Action — any action — is the first and only way to respond appropriately. (Patrick Lambe)
When you have no idea what to do and no way of finding out what to do — and waiting won’t help — then you take a stab in the dark.
This is the domain of Novel Practice. Your approach is:
Act → Sense → Respond
Example: You are lost in a forest (this happened to me, luckily it wasn’t a survival situation).
Act = You walk in a straight line in one direction.
Sense = You come across a road at the edge of the forest.
Respond = You walk down the road. Depending on what happens next you may still be in the chaos domain (still not clear what to do) or you may move into a complex (you have a clue to guide you), complicated (you know where you are but not how to get home) or simple domain (you see a sign pointing where to go).
Use the right protocol for the right situation
Knowing that there are different contexts for decision-making is very helpful. We are better equipped to assess what kind of decisions we are making and what the correct protocol is in each case.
