>by Don White
In order to “Get America Right” we need those in Washington to make the very best decisions always. This series of articles is designed to pose to the administration both the need for better decisions and a way Obama and his cronies in the House and Senate can come up with the best for America.
For the Obama Administration — or for anyone, really — it’s imperative that there be a battery of decision coaches.
What will stop Barak Obama and his staff, and most of us, from doing so is arrogance. We may have been to college. We might even be Phi Bett Kappa, own a doctorate, be well educated and think now we know everything and can manage or do anything.
But believe it or not, few people have been trained in how to make decisions. Most of us are almost completely self-trained in decision-making.
Herbert Simon, the 1978 Nobel Prize laureate in economics, or scholars like Daniel Kehneman and Amos Tversky, could probably train this kid Tim Gaithner who runs the U.S. Treasury and make a better public servant out of him. Or they could train Rahm Emanuel and others who seem to be stumbling over their White House vetting and appointment decisions.
Simon, Tversky and Keneman have taken a detailed look at how real people make decisions. Much like a swimming coach analyzes each action of a swimmer’s strokes, dives, or turns, or a baseball batting coach gives tips to a slumping hitter which can raise batting averages fifty to a hundred points, these professors could offer Obama and Congress some much needed help.
For example, Major League Baseball hitting coaches recognize that at times even all-star players fall into bad habits, dipping their front shoulders, shifting their weight too soon, over striding, or taking their eyes off the ball.
Likewise, even the smartest people make mistakes in ways that cause them to overlook the best options. They may fail to illicit key factual information because they have too much confidence in their judgments or too much pressure from inexperienced bosses to prepare opinion papers or to decide immediately.
Just as good swimming and baseball coaches have developed ways to overcome the most common errors in their athletes,
decision-making researchers are developing ways to overcome the characteristic errors of self-taught decision makers.
I’ll bet Obama — and a lot of CEOs — have never thought about that. Today, there are even mathematical models for people to follow, and it doesn’t matter if you’re a Democrat or a Republican.
Ever heard of “behavioral decision theory?” We’ve got PhDs in the Pentagon who should study this subject if we are ever to do what President Obama has mandated, that is to cut military procurement costs and minimize cost overruns, regardless of the thousands of industry lobyists working to expand prices. The same methodology will be necessary in health care as we struggle to reduce doctor and hospital care expenses without jeopardizing the quality of medical care in America. The cutting must meet the exacting eyes of all Americans and be accepted by everyone, and withstand the critical scrutiny of the best minds in science and medical care. You can bet these decisions will have to overcome a lot of critical “drag” because of the many opposing interests and toes to step on, and you can’t just mandate it unless the tide of public and professional opinion is on your side.
At a time that he seems to be losing even his staunchest Democrat support in Congress over his multi-trillion-dollar spending proposals, Obama needs to do a super-human job of selling these things and that will take more than just a dark, smoke-filled arm twisting session. It will take great timing and preparation, which requires huge investments in good decision-making before the plan is formulated, endorsed and forwarded.
In their book Decision Traps, J. Edward Russo and Paul J.H. Schoemaker talk about cutting costs in advertising, for example. Part of the answer is stating the problem in new ways. Advertisers “needed to ask,” the authors said, “how do other kinds of businesses cut costs without reducing perceived quality?”
In what ways is an advertising agency like a McDonalds restaurant offering a limited menu, or a university, or a hospital, a doctor, or the Pentagon?
What they did may anger some liberals. They started curtailing unprofitable services they offered to clients. They introduced efficiency measures based on careful analysis of the actual cost of various services. This is precisely what government intends to do with doctors and hospitals to bring down costs, and everyone isn’t going to like it. In fact, America may wake up some day and find it’s oce pristine medical care looks more like the Canadian model. Then where do the wealthy go for better treatment, Finland?
They rethought the prices of services, introducing lower prices for low, off-season service, such as a period between new-car models for an ad agency specializing in automative clients.
Do doctors and hospitals have their busy and slow seasons?
By reframing their view of the business, they acieved major steps back toward prosperity, said Russo and Shoemaker.
Research shows that people in numerous fields tend to make the same kinds of decision-making mistakes. So, whatever kinds of decisions government or industry have to make, they can likely use the insights a small group of researchers have developed.
In the next edition, I will highlight the top ten decision traps.