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THE LEADER FRAMEWORK
“Good outcomes are what we desire, whereas good decisions are what we can do to maximize the likelihood of having good outcomes”
J. Celona e P. McNamee
THE RELEVANT CONTEXT
We are all Decision Makers, both at work and in private life. We make around 35,000 decisions every day from the simplest to the most difficult; for the simple ones we use the empirical rule, based on experience, but for the difficult ones we could use decision-making processes that involve more people, with specific skills and knowledge, supported by tools that facilitate decisions, and allow to create value.
Yet even in decisions which contemplate great complexity and uncertainties, many of us rely on our own experience.
Will it be the right choice?
Why today, more than ever, must we have a proven and reliable decision-making process, so that people can decide with confidence, consistency and commitment in a world full of uncertainties and great volatility?
The reason is simple: we miss many opportunities because we are Humans. It has been widely proved in the past 30-40 years and by various psychologists – Amos Tversky and Daniel Kahneman among others – that, when a person has to make a decision in an uncertain situation, they will mostly use “intuitive thought” resorting to heuristics, that is to mental shortcuts deriving from our evolution, which lead to biases and to wrong decisions, rather than taking advantage of creative, inclusive, rational processes.
Indeed, there is much evidence that the brain is naturally inclined to prefer being in its comfort zone, in situations where it can control everything; it also has the tendency to simplify reality based on its mindsets, to refuse alternatives and underestimate risks.
Confident in our abilities our decisions
- are often based on intuition, namely irrelevant, non-reliable or inadequate information.
- rely on advocacy culture and presume that we reached a quality deal, excluding other alternatives a priori. We don’t really know what we lost
- address the problem in a wrong way and end up facing the wrong problem
- don’t look for the greatest realizable value, because we are used to the “good enough” syndrome and stop at the first, or the second, option we are provided
- are sabotaged by biases, emotions, and false hypothesis subvert rational thinking
Managing a team, a department or a company to succeed means making fundamental decisions firsthand, evaluating others’ and exposing yourself giving valuable pieces of advice. And you have to do this in the context we live in now, rapidly changing and unpredictable. Often with a tight deadline and not enough information. In such situations, it is often counterproductive relying on intuition and on your usual techniques to solve problems. By doing this, we fall victim to unconscious biases that hinder our ability to make the best decisions.
To make a better choice in our real world, we cannot ignore the awareness of our human nature, that is fallible or we make mistakes. And the greater the complexity, the greater the mistakes.
WHAT IT MEANS TO MAKE QUALITY DECISIONS
Some research helps us understand the importance of making better decisions.
Decision-making drives 95% of the business performance (Source: Bain & Company)
Only 15% of the global business population feels “engaged”(Source: Gallup)
According to Fingertip (www.fingertip.org)
- 59% of employees find decision making #1 problem at work
- 51% of decisions are not aligned with the organizational strategy
- 33% of work time is spent on waiting decisions to be made
It turns out that making quality decisions, always consistent with Corporate Identity and Strategy, can make a difference in a highly volatile and uncertain world.
To make a Quality Decision means
- Asking the right questions and not giving the correct answers; otherwise, there is a process of advocacy with employees and colleagues, thus losing many opportunities. About 80% of decisions are made by intuition or advocacy. Think about how much value, assumed as an opportunity, is dispersed. Asking the right questions leads to a mitigation of the main cognitive biases – Overconfidence, Confirmation Bias, Anchoring and Groupthink –(1)
- Engaging the right people working on a shared goal means fostering diversity, which implies looking at the problem or opportunity from different points of view to enrich the initial idea
- Recognizing that your idea is as valuable as that of others (intellectual honesty), then evaluating the different scenarios (different strategies and business models) allows you to increase the chances of success and reduce risks
- Gather reliable information on these scenarios and evaluate them simultaneously with the values and risks to have a decision based on logic and not on intuition, and identify the one that generates the highest Value
- Choose not the one that attracts us or our boss, but the most consistent solution with the goal set, with the corporate identity and strategy in place
By acting in this way, we have eluded many of the mental traps our brains experience every day:
- preference to solve problems in the comfort zone, according to what we know – experience
- tendency to simplify reality according to one’s mental patterns
- preference to reject alternatives, as it is complex and confusing
- tendency to underestimate risks because we feel confident in what we know
- tendency to selfishly choose the most straightforward way
THE LEADER FRAMEWORK
Have you ever wondered how your manager figure will have to change to:
- create more inclusive, confident, grateful, open and impartial behaviors and become a sustainable leader yourself?
- make things happen and at the same time improve business performance with the help of all and have an impact on society and the environment as well?
The Leader Framework derives from the open multidisciplinary methodology Lean Decision Quality® (https://www.stratego.life/en/lean-decision-quality ) based on Neuroscience – how people commonly make decisions – and Science of Prescriptive Decisions – how people should make decisions -.
The Leader Framework is a visual strategic tool for everyday use to enhance and systematize Collective Intelligence – Integrated Thinking – to always find the best possible solution and maximize the value of our decisions (investment).
A framework that both managers and collaborators can use to ask the right questions, give sense and awareness to what you are doing, involve strategic stakeholders, ask yourself the possible alternatives, reflect on what is known and what is not and, finally, how to put together knowledge, alternatives and desired values to make a quality decision.
To better understand The Leader Framework, a brief description of Lean Decision Quality® is given, also called the decision wheel. It’s made up of five steps:
- the first 4 steps represent the decision-making process, from the definition to the objective development up to the taking of a decision
- the tread consists of Identity – Vision, Mission, Culture & Structure – and Corporate Strategy and it accompanies the goal along its entire path to generate a continuous alignment
- Step 5, Commitment to Act, is a fundamental step to transforming an alternative’s potential value into real value, passing from thinking to acting.
The Leader Framework, the synthesis tool of Lean Decision Quality®, allows us to define goals, purpose, stakeholders, alternative strategies, and choices clearly. Used recursively it enables you to develop a strategic and systemic mindset.
It consists of three questions:
- What are we going to do? -> corresponds to our real goal (e.g., launching a product, making an event, opening a new store, evaluating a new production plant, buying a machine, founding a startup, creating a company spin-off, entering a new market, etc.). “What” corresponds to the strategy of the target
- Why are we doing this? -> corresponds to the purpose of the goal (what we want to achieve: increase sales, profit, my production, my brand awareness, my eco-sustainable impact, etc.). “Why” corresponds to the goal we want to achieve, both in terms of Vision and in terms of analytics (numerical objectives), asking us what the context is behind the choice.
- Is it consistent with Corporate Identity and Strategy? -> corresponds to the question of whether the goal is aligned with Vision, Mission, Values, Skills, Structure and Strategy in place. A non-alignment would lead to doing something useless for the organization. Of course there are always exceptions. If I revolutionize my business, the question to ask is how should my eventual mission, skills, structure and strategy change?
Note: It often happens to confuse What with Why, as Vision and Strategy are unclear or have not been shared. Objectives not well defined generate confusion both for those who define them and those who receive them.
Who do we involve, and with whom do we share the decision? -> Who we involve corresponds to the involvement of the functional or inter-functional project team depending on the type of strategic-tactical-operational objective. With whom we share the goal is referred to internal stakeholders (sponsors, experts, operational part, etc.) and external stakeholders (partners, suppliers, customers, experts, etc.). Involving people allows us to enrich our decision-making framework, making us see the problems/opportunities from different points of view and reducing complexity, mitigating risks and adding value to the decision.
Note: It often happens to solve problems in our comfort zone: the reason is that we are overly confident in what we do or in the capabilities of our organization.
What are our alternatives? -> corresponds to wondering if what we have in our mind is correct/wrong or creates little/much value. This allows us to disengage from the initial idea and evaluate several opportunities, primarily to increase the likelihood of success of our initial goal.
Note: The solution is often unique, or the alternatives are two or three and quite overlapping. This does not add much value compared to the initial idea. Options must be very creative, compelling, achievable, and significantly different.
It’s made up of three questions:
- What do we know, and what do we not know? -> corresponds to whether we have reliable information to support the alternative or the two alternatives that we bring forward, and the main uncertainties.
- What are the reasons for our choices? -> corresponds to assess the alternative or the two alternatives that we bring forward, values and risks to the choice (e.g. if the most valuable alternative, in terms of profit or sales, also has the most investments, will it be chosen or will it be preferred one with lower risks and values?)
- Are they consistent with the goal, identity, and strategy in place? -> corresponds to whether the alternative chosen meets our initial requirements (KPIs) and what we are deciding is aligned with our identity and strategy.
Note: The sources of our information and uncertainties are often not clearly stated. In addition, only values are very often measured, and risks omitted.
So what’s the big advantage of starting with an idea, exploring the alternatives and then choosing the best one? Well, if we start from this assumption, we get two advantages: if our initial idea, once the different alternatives have been explored, gets to be the best we are even more determined to carry it out – so we do nothing but enhancing it –, otherwise we choose the alternative that generates more value for us (i.e. value can be understood as profit, eco-sustainability, number of people to be hired, etc.).
The sentence to keep in mind is “only with knowledge we decide the idea“
Do we commit to resources allocation and action taking? -> corresponds to transforming potential value into real value. A thought without action remains an end in itself. The application allows generating commitments both of the decision-maker and of the team that will develop an operational plan.
The Leader Framework allows us to have quick and immediate feedback on our daily decisions without leaving anything to chance.
The Leader Framework has a “structured visual approach” that allows you to share goals and strategies, which can sometimes be challenging to explain or understand, in a more straightforward and intuitive way.
Below are real cases that allow the immediate understanding of the framework to be able to replicate it independently both in business and in private life, on all occasions that provide allocations of financial and temporal resources.
The purpose is always to find the best solution, which maximizes the value of our decision (investment).
WHY USE THE LEADER FRAMEWORK
- Effective: Enable lateral, analytical and systems thinking, necessary to always maximize the value of your investments, minimizing risk and complexity
- Replicable: thanks to its versatility and adaptability, it can be replicated in all the decisions you need to make yourself, and easily transferred between colleagues, with partners and customers
- Fast: reduces decision-making time without affecting the effectiveness of decisions and shortens execution time, thanks to the active involvement of stakeholders and the streamlined and essential structure of the framework
- Easy to use: an easy, visual, flexible decision-making approach, with enlightened questions, step by step, guides you towards the goal and actively involves your team in decision-making processes, creating a climate of trust, respect and responsibility
- Crystal-Clear: defines a common business language that facilitates clear, compelling and transparent communication between stakeholders, avoiding possible misunderstandings
- Engaging: activates Collective Intelligence and allows you to identify risks, reduce complexity to quickly find solutions to complex problems, and seize the best opportunities
- Consistent: guides you in making decisions that always align with your company identity and strategy, avoiding image damage and waste of resources
Having a method means pursuing a goal, having a logical order and a plan, to reach the purpose you want to get to. The method enables you to always move forward, progress, go beyond, explore, evaluate, decide, grow and get better.
As Stewart Brand says: “We can try to change people’s minds, but we’re just wasting time. Let’s change the tools in their hands, and we change the world”.
The goal of The Leader Framework is to help people engage in strategic and systemic thinking daily, in a recursive way, as well as to understand the exact organizational and neurological dynamics that govern the making of more sustainable decisions, inclusive and profitable, both in business and in private. This results in boosting self-esteem and a strong incentive to develop potential to accelerate performance, productivity, and motivation to do.