Uncertainty and change make for tough decision making. CFO SA's Graham Fehrsen offers tips to help.
What decisions will you be faced with in 2019? Some will be easy but most are likely to be complex and multifaceted with more than one right answer. The mental and emotional pressure you will face when making decisions, in a time of increasing uncertainty, is enormous. Developing the skills and insights necessary to deal with this reality is perhaps some of the most important work you can do.
The Nobel-Prize-winning psychologist Daniel Kahneman made a significant contribution to our broader understanding of perception and judgement, the building blocks of decision making, in a groundbreaking career. Perhaps the most important finding in his work was that even those with training in the statistical theory of prediction regularly make incorrect judgements when faced with high levels of uncertainty. This is because our brains simplify thinking by relying instead on a limited number of heuristics or short cuts.
Knowing this and how to deal with it is critical to your decision-making ability.
Combining the level of uncertainty and change creates a challenge unlike any other and there are very few executives are not intimidated by the task at hand – whether they’ll admit it or not. And when we’re faced with this level of stress we easily fall back into old habits and survival thinking, which can prove highly detrimental. But all is not lost – a recent McKinsey paper, Leading with Inner Agility suggested there are some ways to create more agile mental and emotional practices:
- “Pause to move faster” – taking time out to consider the information at hand and not deciding immediately is one of the hardest things to do when chaos is all around and it feels like time is of the essence but science has shown we make infinitely better decisions using this technique.
- “Embrace your ignorance” – part of solving new and often unique problems lies in our ability to accept we don’t know and asking others to help us see things from different angles.
- “Radically reframe the questions” – you can do this by diversifying your network and asking others to help you rethink the most important questions you’re wrestling. This process allows you to lift the lid on other perspectives and grow more comfortable with the unknown.
- “Set direction, not destination” – a lot of this is about giving people around you clarity on the purpose and impact you have in mind and then empowering them to make decisions on how to get there.
- “Test your solutions – and yourself” – this last part is closely tied to the four practices above and it is the way you can take the steps towards greater agility.
I wish you all the best in your quest for agility in 2019. I hope that in 2019 you’ll take full advantage of the incredible learning and networking platforms that CFO South Africa offers to help you on your journey.