Decision-Making for Grown-ups

In this talk Liz introduces different ways of looking at the world that help us choose the right approach, including Cynefin, a framework for making sense of situations depending on certainty or uncertainty; Wardley Mapping, which lets us understand our organizational and technical structure as it evolves; and Real Options, the principles of which help us to postpone decisions until we have more information.

Find out how these lenses and their associated tools are helping modern leaders to navigate their changing landscapes and ecosystems with clearer insight, less frustration, less risk and faster delivery.

Transcript

1. Liz Keogh
   @lunivore
   http://lizkeogh.com
   @lunivore
   

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2. “Humans do not make rational logical
   decisions… they pattern match with either their
   own experience, or collective experience
   expressed as stories. It isn’t even a best fit
   pattern match but a first fit pattern match.”
   - Dave Snowden, “Managing for Serendipity”
   @lunivore
   

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4. @lunivore
   Diego Delso, delso.photo, License CC-BY-SA 4.0
   

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5. Google effect
   Apophenia Pareidolia
   Confirmation
   Bias
   Actor-
   Observer
   Bias
   Illusion of
   Control
   Insensitivity
   to sample
   size
   Omission
   bias
   Negativity
   bias
   Naïve
   cynicism
   Fundamental
   Attribution
   Error
   System
   justification
   Worse-than-
   average
   effect
   Illusion of
   transparency
   Trait
   ascryption
   Cryptomnesia
   Choice-
   supportive
   bias
   Forer effect
   Normalcy bias
   Bandwagon
   effect
   Decoy effect
   Hyperbolic
   discounting
   Restraint bias
   Stereotyping
   Distinction
   bias
   Pseudocertainty
   effect
   Pessimism
   bias
   Optimism bias
   Moral luck
   False
   consensus
   effect
   Anchoring
   Congruence
   Overconfidence
   effect
   Loss Aversion
   159 Cognitive
   Biases on
   Wikipedia
   

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7. Stephen Bungay, “The Art of Action”
   @lunivore
   Intent
   Outcomes
   Plans
   Actions
   Effects Gap Knowledge Gap
   Alignment Gap
   What we expect our
   actions to achieve
   and what they
   actually achieve
   What we want people to
   do and what they
   actually do
   What we would like to
   know and what we
   actually know
   

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8. Stephen Bungay, “The Art of Action”
   @lunivore
   Intent
   Outcomes
   Plans
   Actions
   Effects Gap Knowledge Gap
   Alignment Gap
   More Controls
   More Instructions
   More Information
   

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9. Information Arrival
   @lunivore
   t
   Information
   Point at which
   most decisions
   are made
   

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10. @lunivore
    Material in this slide is Copyright © 2017 Cognitive Edge Pte Ltd..
    Used with kind permission.
    “Innovation Cycle” with thanks to David J. Anderson
    Commodities
    Differentiators
    Build on
    Spoilers
    The Innovation Cycle
    

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11. @lunivore
    Complicated
    Obvious
    Chaotic
    Complex sense-analyse-respond
    sense-categorise-respond
    probe-sense-respond
    act-sense-respond
    Material in this slide is Copyright © 2017 Cognitive Edge Pte Ltd..
    Used with kind permission.
    Cynefin
    

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12. @lunivore
    

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13. @lunivore
    Complicated
    Obvious
    Chaotic
    Complex sense-analyse-respond
    sense-categorise-respond
    probe-sense-respond
    act-sense-respond
    Governing constraints
    Fixed constraints
    Enabling constraints
    No effective constraint
    Good Practice
    Best Practice
    Emergent Practice
    Novel Practice
    Material in this slide is Copyright © 2017 Cognitive Edge Pte Ltd..
    Used with kind permission.
    Cynefin
    

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14. Estimating Complexity
    5. Nobody has ever done it before
    4. Someone outside the org has done it before
    3. Someone in the org has done it before
    2. Someone in the team has done it before
    1. We all know how to do it.
    

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15. @lunivore
    5 4 3
    2
    1
    

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16. @lunivore
    Complicated
    Obvious
    Chaotic
    Complex sense-analyse-respond
    sense-categorise-respond
    probe-sense-respond
    act-sense-respond
    Governing constraints
    Fixed constraints
    Enabling constraints
    No effective constraint
    Good Practice
    Best Practice
    Emergent Practice
    Novel Practice
    Material in this slide is Copyright © 2017 Cognitive Edge Pte Ltd..
    Used with kind permission.
    Cynefin
    

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17. A Wardley Map
    Simon Wardley
    CC-BY-SA 3.0
    

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18. Julian Birkinshaw’s Organizing Models
    Bureaucracy
    Position
    By Rules
    Hierarchy
    Extrinsic
    Rewards
    Meritocracy
    Knowledge
    Mutual
    Adjustment
    Logical
    Argument
    Personal
    Mastery
    Adhocracy
    Action
    Opportunity
    Experiment-
    ation
    Achievement
    @lunivore
    

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19. @lunivore
    “Our comforting conviction
    that the world makes sense
    rests on a secure foundation:
    our almost unlimited ability
    to ignore our ignorance.”
    

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20. Observe data
    Filter data
    Generate assumptions
    Draw conclusions
    Build beliefs
    

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21. Deliberate Discovery
    -- Dan North
    Assume ignorance
    Assume second order ignorance
    Optimize for discovery
    

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22. Real Options
    -- Chris Matts
    Options have value.
    Options expire.
    Never commit early unless you know why.
    

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23. Correlated in Retrospect
    n
    t
    @lunivore
    

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24. Where are your
    commitments and investments?
    @lunivore
    Yearly
    budgeting
    cycle
    Up-front
    analysis
    work
    Work done
    but not in
    use
    High cost
    of making
    ready for use
    Regulatory
    requirements
    Quarterly
    / rolling
    budget
    Regulatory
    feedback
    Lightweight
    planning
    Small,
    frequent
    changes
    Great
    engineering,
    continuous
    deployment,
    culture of
    change
    

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25. “Crossing the Chasm”
    -- Geoffrey Moore
    @lunivore
    

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26. “The LASCOT Community”
    -- Chris Matts
    @lunivore
    

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27. Concepts from this talk
    Wikipedia: Epiphany vs. Apophany
    Dave Snowden: Cynefin
    Liz Keogh: Complexity Estimation
    Simon Wardley: Wardley Mapping
    Julian Birkinshaw: Bureaucracy, Meritocracy, Adhocracy
    Daniel Kahneman: Thinking, Fast and Slow (System 1 vs. System 2)
    Dan North: Deliberate Discovery
    Chris Matts: Real Options
    Bjarte Bogsnes: Beyond Budgeting
    Chris Matts: Communities of Needs vs. Solutions
    Dave Snowden: Governing vs. Enabling Constraints
    

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28. @lunivore
    Liz Keogh
    liz@lunivore.com
    @lunivore
    http://lizkeogh.com
    

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