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The Role of Creativity In Decision Making

Many people, when making business decisions, believe that they perform an unbiased review of all or a significant number of alternatives and then select the best alternative that addresses the issue.

In business literature, this is referred to as the rational decision making process.  Organizations that have a corporate decision-making process often adopt a rational process.  It has the benefits of simple logic and fits nicely with modern management styles.  Its purported strength is that it provides structure and discipline ensuring that a full range of options are reviewed in a logical and comprehensive manner.

 In the real world, however, it stumbles on its implicit assumption that all information is available to make a logical and rational decision.  Most business decisions have significant uncertainty associated with them.  Rather than using rational decision processes, most business decisions are made using heuristics, the process of mental shortcuts that people use for reaching decisions when faced with limited and incomplete information.  While heuristics have been demonstrated to produce good results in situations where there is high uncertainty; cognitive biases, group dynamics, cultural biases and decision styles can have a major impact on the decision that is reached (Krahulic, 2016).  Depending on the individuals involved, the time available to make the decision, other work, and personal demands the actual decision made can vary widely even if the available information is the same.

Work by Dan Lovallo and Olivier Sibony (Sibony, 2013) suggest that people make decisions in very different ways.  They identified five different decision-making styles and noted that while each style has strengths and weaknesses, the effectiveness of any given style is dependent on the nature and context of the decision that is being made.  In the same scenario, very different decisions can be reached depending on the personality of the person making the decision.  Studies show that, even in very controlled environments, decisions have high variability due to personal approaches to decision making (Daniel Kahneman, 2016). 

Harnessing Creativity and Innovation

Because of uncertainty, the underlying biases and decision styles of individuals and the dynamics of interpersonal relationships it is highly unlikely that organizations ever truly execute rational decision making processes.  While theoretically attractive, rational decision-making processes are not well aligned with the way individuals actually make decisions.

Given that, it is difficult to see how an organization can depend on a rational decision process to produce consistent and auditable decisions.  This leads us to question whether we can find a different or modified approach that recognizes the human factors of decision making, provides an auditable decision process and creates high-quality reproducible decisions.

Heuristics have been shown to be able to produce high-quality decisions rapidly in situations of high uncertainty but are subject to numerous biases that influence decision making outcomes (Dietrich, 2010).  In normal decision-making, these biases tend to be unconsciously applied resulting in unauditable decisions that have high variability.

To create an auditable process that can perform reproducible decision making, management must be able to control human factors such as cognitive biases and group dynamics.  One tendency of people using heuristics to approach a decision is a rapid and somewhat random selection of a preferred option which is then further confirmed by focusing only on information that supports the option. To counteract this, processes need to be put in place that promote the unbiased identification of all available options. This requires a creative approach to decision making that brings new and novel opportunities to the table and allows a full range of options to be evaluated and acted upon.

Creativity is the ability to identify novel ideas while innovation is the ability to convert creative ideas into reality.  Creativity leads to innovation.  Innovation leads to effective and efficient operations.

To increase creative thinking, John Cleese, the well-known actor and writer, identifies two modes of thinking.  The “Closed Mode” is a mental state where one is focused on doing.  At work, it is the mode we are in most of the time.  It is very effective at dealing with common tasks and has the added benefit of demonstrating activity or busyness.  The “Open Mode” by contrast is the mode where creativity can happen.  It is a relaxed, contemplative and exploratory mode that allows the subconscious to creatively evaluate an issue, question or problem and provide creative insights.

He goes on to define the conditions required to use the “Open Mode” to foster creativity.  They are:

  • Create mental and physical space from other demands
  • Set aside a dedicated period of time that is long enough to allow open thinking to occur
  • Identify when the result is required to be finalized
  • Have the confidence to play and explore without bounds
  • Use humor to move quickly into an open thinking space

The “Open Mode” is challenging in a business environment since the results are somewhat unpredictable, it looks a lot like not accomplishing anything and there is no final answer where one can identify that the activity is complete and successful.  In many cases, it is an uncomfortable state to be in because of its lack of structure and clear goals.

However, the “Open Mode” allows one to explore creative options in an unstructured manner and identify new opportunities, relationships, and challenges.  After the period of open creativity, a return to the “Closed Mode” allows specific critical evaluation that may lead to innovative solutions.

“Open Mode” thinking addresses the need for creative insights that are the cornerstone for providing innovative solutions to corporate issues and opportunities.  The challenge comes with integrating the opportunity for “Open Mode” thinking into a normal business environment that is results oriented.  The “Open Mode” can be used to expand horizons, overcome biases, and develop creative thoughts but it needs to work in a structure that aligns with an organization’s normal work environment.

To address this, Tyra has created tools that help to establish “Open Mode” creativity while overcoming cognitive and cultural biases that prevent good options from being identified.  The Context Analysis toolset is a one-day interactive session that combines “Open Mode” thinking to provide a creative environment with an underlying framework to provide auditability.

By combining Context Analysis sessions with an organization’s subject matter expertise, Tyra’s other decision-making tools and Tyra’s ability to evaluate and design decision-making processes, specific questions can be addressed and general corporate decision-making skills can be improved.

In summary, Tyra’s Context Analysis is an enabling process, not a recommendation process.  It quickly provides the context and confidence needed for a decision maker to make and timely decisions that are creative, auditable, actionable, and appropriate.  For more information, visit our website or contact us at This email address is being protected from spambots. You need JavaScript enabled to view it..

References

Daniel Kahneman, A. M. (2016). Noise: How to Overcome the High, Hidden Cost of Inconsistent Decision Making. Harvard Business Review, October.

Krahulic, G. (2016, September). The Science of Rational Decision Making . Retrieved from Tyra Information Strategies: http://www.tyrastrategies.com/blog-articles/84-the-science-of-rational-decision-making

Sibony, D. L. (2013, April). Early-stage research on decision-making styles. Retrieved from McKinsey&Company: http://www.mckinsey.com/business-functions/strategy-and-corporate-finance/our-insights/early-stage-research-on-decision-making-styles

The happy Manager. (n.d.). Rational Decision Making Model. Retrieved from The Happy Manager: http://the-happy-manager.com/articles/rational-decision-making-model/