Why Did You Do That?
1. “Because that’s what you do.” I can’t conceive of any other way of doing it. General Motors seemed to have reached this point before its bankruptcy – one observer commented that a core management skill seemed to be the ability to explain why nothing was possible.
2. “Because that’s the way I’ve always done it.” This is habit, or conditioned reflex. The decision was probably made unconsciously, but I could at least in principle recognise an alternative if someone presented it.
3. “Because I considered several options and chose the best one for this particular set of circumstances.” This is flexibility.
There’s a hierarchy of sophistication, rising from 1. to 3. We all use all three strategies, and that’s right. You can’t apply 3. to every decision – life’s too short, and many situations don’t merit it. If we applied 1. to everything, we’d never have learned to walk, never mind do our jobs.
Over time, decisions tend to move down the hierarchy. The first time, we have to think it through. The more we deal with similar situations, the more we reduce the decision process to rules, habits or conditioned reflexes. That’s mostly sensible too.
The more problematic area is decisions which need to move up the hierarchy. Questions which in the past could be dealt with according to habit and precedent need to be thought through. For instance, a company may assume that all customers are profitable and therefore welcome all sales. This is either because the concept of “revenue associated with negative profit” doesn’t exist, or because that’s the way it used to be. Now the cost of acquiring a new customer has risen, the margins are lower and the customers less loyal. The result is that some customers are losing the company money.
The more unusual the times, the worse the state of the economy, the more likely it is that decisions need to move up the hierarchy.
The question: pay attention to the decisions you take every day. Identify those that you take according to habit or precedent, or where you don’t see an alternative. If you actually thought these through, using whatever data was available, would you come to the same conclusion?