Monday, February 13, 2012
I started looking into some work by James March and the his thoughts on the decision making process. He suggests there are two basic models for making decisions.
1. We weigh up the alternatives and calculate consequences then pick the one that yields the most value. This is the standard model in economics for decision making, that assumes we are rational and make choices based on the logical outcome that benefits the individual.
2. Is decision making based on identity considerations, Who am I? What situation is this? and what do people like me do in this type of situation? This type of decision making is much more based on principles to the individual.
These two decision making alternatives were interesting summaries of decision making. It definitely supports the work I have been reading about brand thinking and consumer behavior. That people naturally making decisions partly based on logical choices, but likewise are driven by internal drives and emotions as well as self identity.
As I dived deeper into the work on decision making, there were various discussions around the decision making process and methodology, which is basically outlined as :
1. Discover the problem
2. Define the problem
3. Define the Objectives
4. Think of Alternatives
5. Work out consequences
6. Make Trade Offs
Of course suddenly it made sense to me that this of course is reflective of the design thinking process, which in itself requires many decision making choices. So it makes sense that these two areas of methodology should have overlap and similarities. The early phases of discovery, rolling into definition followed by building alternatives or prototypes, ending with analysis and making the final result. Of course as such many of the design thinking tools can be used, to help in the decision making process, such as brainstorming, the 5 whys and user research.
In decision making important things to consider are, how we frame the problem. The framing of problems and finding the right questions are going to yield different results, so getting it right early on is going to save much time and effort later. Donald Schon, has written about this issue in his book "The Reflective Practitioner". Wording can go along way to changing peoples thoughts and ideas.
Decisions are not always rational and it should never be discounted that we are emotional creatures and that may affect the decisions we make. Our ability to keep our attention on a task, remember information and clearly think about problems can also have impact on our decision making.
I am not the only one to have noticed this similarity and Dan Saffer, put together a nice slide presentation here on decision making and design.
Summarizing some of the decision theories he outlines in his presentation.
Utility Theory - Each decision has a cost or consequence, as well as a benefit. We weight the benefits against the consequences to arrive at the best choice. Sometimes though the comparisons are not objectively the same. Sometimes the decisions are subjective and then it becomes an individual choice that has other influences, that maybe less rational.
Descriptive Theory - This is about how we actually go about making decisions. It suggests we are driven by forces that try to avoid regret, like loss aversion. We rationalize our decisions to ourselves so that we do not feel regret later. One of the interesting phrases that is used is the term "satisficing" the combination of satisfying and suffice. The idea is to reach a level of just good enough, that makes it easier to make decisions, rather than striving for perfection. Considering the huge amount of data and information we have to process in modern times this is good way to optimize decision making. In his book "The Paradox of Choice" Barry Schwartz mention this problem with consumer choices being to many, "satisficing" is a potential way to avoid becoming frozen in decision making for a consumer.
Decisions surround us everyday, we have to make easy ones, and sometimes very hard ones. Along with this we sometimes have a great deal of time to make those choices and other times it has to be in a blink of an eye. What I like is that designers and design thinking methodology offers one possible way to systematically make the decision making process work in business and new product development teams. Not by guessing but by consideration, learning, building then evaluating. What is clear is that it is not always possible to know which is the right path, but having some form of process can help start the journey.