Saturday, February 09, 2008

How do we decide when to make a decision?

James is sitting browsing through the year old magazine and wondering what all the other people in the waiting room are here for. There is an old couple sitting next to each other talking quietly who smile politely when he catches their gaze, a young pretty girl in a short skirt who looks miserable and pale, workman in dirty work cloths holding his arm. He looks like he is in pain, probably an accident. Jams notices the pain in his stomach as it start to get sharp again. He first noticed that pain a few days ago and it hasn't really gone away. It eases off at times and at other times it is quite painful. He is worried, it might be an ulcer or cancer even, maybe he should have come to see the doctor sooner. He keeps pushing that thought to the back of his mind. He looks back to the old magazine.
Shelly is looking at the recent stock market prices. They have been a bit all over the place recently. She wants to invest but is this a good time? Some people are saying this is a good time to buy compared to last month and others are saying that in all likelihood the market prices will fall further in the coming months and maybe over the year. If only she knew what to do.
Arthur is trying to workout if this is a good time to start a full scale root and branch reorganisation of the business. Market conditions are tough and we certainly need to do things differently to boost the profitability of the company. If we do this now will it cause too much disruption at a time when everyone really needs to concentrate on the business and on making things more efficient or will it be just the tonic we need? Clear out the less profitable parts, get the bits working better that need to change and sort out the management structure. Hmmmm.

Why is it that people decide to do what they do when they do? For example why do people decide to start an organisational change programme when they do, or go to the doctor when they do, or buy or sell on the stock market and a million and one other decisions we make when we make them?
All of these things like most things in life fluctuate naturally. Organisational efficiency or effectiveness, pain or illnesses, the stock market fluctuate naturally. Very few if any events or processes have a smooth 'glide path' where the changes are wholly incremental and equally progressive. Fluctuations and variation are a natural part of any and every complex situation. So given that change is part of the system and that the rate and direction of the change is also variable and frequently defies prediction with any degree of certainty there comes a question. When we make a decision to make a change, like go to a doctor or sell / buy or do something to change things how do we decide when the best time is to do any of these things? What is it that prompts most of us to make a decision especially when things are uncertain?
In the next blog we will have a look at something called the Regression Fallacy and how it gives us the illusion of success and frequently wrong foots us.

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