News Photo 120324-M-AV740-001 by Staff Sgt. Clinton Firstbrook, U.S. Marine Corps (2012)

Make A Better Decision Using Intuition—With Data!

Forrest Christian Decision-making Leave a Comment

As I said in Just Make A Decision!, my father was an advocate of “Just make a decision!” You might have thought that this meant that he didn’t think that data and information could help you make better decisions.

You wouldn’t be farther from the truth.

My father was a Statistical Process Control expert, which became Quality Control which became Quality Assurance which became just Quality. He started back in the 1960s, before the Quality Control field exploded after the Japanese explosion, before Kaizen and teams were buzzwords.

He loved data.

But only useful data.

He was constantly measuring because he had seen that managers were making harebrained changes to operations because their intuition told them to do something that made things worse.

Make a decision, but you should measure first.

I see this management disease all the time. A friend of mine is a senior project manager who specialises in salvaging hemorrhaging projects. He had taken over a “must do” project required for regulatory compliance. Unfortunately for management, it had already burned through a year of a two year budget with absolutely nothing to show for it. Pete (not his real name) put together a new project plan to try and get the minimum required accomplished by the regulator deadline. And since he was on a salvage job, he didn’t do the usual padding of the numbers.

“This is the bare minimum budget it will take to get the regulatory compliance,” he told the management team overseeing the project.

Their response: “That’s too much! Cut 10%!”

If the firm had an accountability culture, they would be fired along with the manager who hired them.

Simple measurement would have saved them at any point. But the managers are only concerned with one thing: how much is the budget right now? So every project puts together an impossible budget, fails, then during the ensuing crisis somehow gets more money.

[And they should be using Agile software development practices, which are forbidden by management. Another reason to fire them.]

With a Quality Assurance culture permeating the higher levels, they would have been able to measure different areas to know what would like be done and what wouldn’t. They would know that over 95% of their projects end up over budget or only hit budget by drastically reducing requirements or scope.

Almost everything can be measured. Or at least boxed in.

Doug Hubbard has made his business in teaching people that almost everything can be measured. In his book, plainly titled How to Measure Anything: Finding the Value of Intangibles in Business, Hubbard shows how very little effort can yield better estimates of risk.

You can have a better idea, for example, of whether or not an IT project should be undertaken if you can estimate the potential returns and the actual cost to finish.

Hubbard also warns against fake measurement, like the “high – medium – low” risk levels so many managers use. This actually increases risk because it obfuscates reality. Real risk measurement is slightly but only slightly more difficult and yields much greater results.

My father knew when to say “Just make a decision!” because he knew when more information was not going to yield a better answer.

Which is a topic for another day.

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