Decision-Making – Page 10 – understand-culture

Evernote’s Context

This is how Evernote – evernote(dot)com – describes their new service called Context:

„As you use Evernote, our Context algorithms try to find other information that is likely to be useful and relevant to whatever you’re working on. Our goal is to show you information that will help you improve the quality of your work, without you having to think about searching for it. It’s like having a super smart research assistant always by your side.

Currently, Context can display three types of information when it finds something relevant to what you’re working on: your prior notes, shared notes from your coworkers if you’re an Evernote Business user, related news and articles from Dow Jones and our other partners, and relevant people from LinkedIn. In the future, we’ll add other sources that we think would be helpful to Evernote users.“

comprehensive

Comprehensive: covering completely or broadly. First known use 1614. Synonyms: all-embracing, all-inclusive, broad-gauge, compendious, complete, encyclopedic, cover-all, cyclopedic, embracive, exhaustive, full, global, inclusive, in-depth, omnibus, panoramic, thorough, universal. Antonyms: imperfect, incomplete, partial.

Root Cause Analysis

Root cause analysis is a problem solving method which identifies the original cause of error, as opposed to simply addressing the symptoms.

Root cause analysis is critical in those areas in Germany where sustainability is important, where seemingly minor mistakes can lead to major damage, where error occurs time and again, especially in technical areas. Every type of quality analysis relies on root cause analysis.

If products are returned as defective, roots cause analysis is employed immediately. Each and every form of research and development works at the root level. Where more is required than treating symptoms, root cause analysis comes into play.

Pareto

The Pareto principle: Also known as the 80-20 rule, stating that in many situations approximately 80% of the effects come from 20% of the causes.

Vilfredo Pareto, an Italian economist, documented in the early 1900s that 80% of the land in Italy was owned by 20% of the population. Pareto went on to observe that 20% of the pea pods in his garden contained 80% of the peas. It has become a common rule of thumb in business that 80% of sales come from 20% of clients.

The 80-20 rule could be a metaphor about the American approach to many things, or at least about an element or aspect of the Americans approach. Americans tend not to be perfectionists. Not because they do not recognize and honor striving for the best. But because in many cases attaining, reaching, accomplishing that extra 5% is in many cases “simply not worth it”.

Worth. Value. Does the customer want that extra degree of engineering excellence? Is it necessary to calculate that many digits behind the decimal point? Is that depth of analysis necessary in order to make a decision?

80% is often enough. For Americans, depending on the situation, 60% is enough. Depending on the risk-benefit relationship, even less is enough.

Limited, but Relevant

Americans prefer gathering limited, but highly relevant, information, and fast. Comprehensiveness costs time, and must be justified by its value. All information sources should be considered, provided that there is sufficient time. Americans also accept subjective (non-quantifiable) information sources, such as personal references. Their credibility, though, is judged based on experience (track record) and reputation.

For Americans, however, information gathering serves the pragmatic purpose of information analysis, which in turns serves decision making. Information gathering, thus, is seen early in direct connection with the end goal. If enough information has been collected in order to perform good analysis, there is no reason not to move on to the information analysis step in the decision-making process. Information gathering is not an academic exercise.

Because Americans also see the complexity inherent in many decisions, they prefer to break down decisions into sub-decisions, into particulars. This allows for more focus on key elements of the broader decision. The analysis of the information should then be quick and pragmatic. Objective tools are helpful and should be used, but also combined with experience and common sense. Americans are willing to trust their intuition.

Analysis and Intuition

Good decision making in the American context means a healthy balance between objective analysis and intuition.

Intuition: The ability to understand something immediately, without the need for conscious reasoning; a thing that one knows or considers likely from instinctive feeling rather than conscious reasoning. Late Middle English denoting spiritual insight or immediate spiritual communication. Latin intueri, to consider.

Empiricism. Observation. For Americans, intuition is experience-based knowledge, called on immediately. Intuition is more than a spontaneous thought, a “gut reaction”, a hunch. Americans trust the judgement of the experienced, the wise, of those “who have been there”.

But not to the exclusion of objective analysis. Americans are constantly coming up with new ways to quantify what is deeply human, what in its essence cannot be quantified. It’s a question of balance. When to go with the objective analysis, when with intuition? Can they be combined?

Star Trek. A brilliant television series. Late 1960s. Deeply human, created with little frills, eye-candy, special effects. Instead it tapped into the human imagination, the greatest source of special effects. Kirk is intuition. Spock is reason. Tension between the two. But it worked.

“Paralysis by Analysis“

‘Paralysis by analysis’ – a phrase often used in the American business context – describes over-thinking that leads to a reluctance to make a decision, and in doing so exhausts the available time in which to act.

In Aesop’s fable The Fox and the Cat the fox boasts of hundreds of ways of escaping while the cat has only one. When they hear the hunting dogs approaching, the cat climbs quickly up a tree while the fox in his confusion was caught. The moral: “Better one safe way than a hundred on which you cannot reckon.” In Hamlet, Shakespeare writes of Hamlet’s flaw of thinking too much: “sicklied over with the pale cast of thought.”

Analysis: ‘In the final (or last) analysis’ means when everything has been considered. This phrase is used to suggest that a statement expresses the basic truth about a complex situation. Late 16th century. Medieval Latin from Greek analusis, from analuein unloose.

Reluctance: Unwillingness or disinclination to do something. Ambivalence: The state of having mixed feelings or contradictory ideas about something or someone. Hesitation: The action of pausing or waiting before saying or doing something.

Pride comes before the fall

Deutsche Telekom – German Telecom – has had several stock offerings. Its first in 1996 was accompanied by a carefully orchestrated marketing campaign which was a huge success.

People who had never owned stocks flocked to the T-Aktie, to T-Shares. The Aktieneuphorie – stock market euphoria – in Germany lasted for several years.

The share price at the first offering was 28.50 DM (14.57 Euros), at the second 39.50 Euros, then 66.50 Euros. On March 6, 2000 the T-Aktie hit its highpoint of 103.50 Euros.

From there it was all downhill. On September 30, 2002 it was at 8.42 Euros. At the beginning of 2015 it just about at 16 Euros.

Shareholders sued Deutsche Telekom in 2008 in Frankfurt. Their claim was that Deutsche Telekom misinformed them about the true value of the company’s real estate holdings, as well as other incorrect statements in their financial statements.

Over 17,000 shareholders demanded roughly 80 million Euros in damages. The court case focused on whether the shareholders were sufficiently informed about the level of risk.

The marketing hype of the T-Aktie was criticized by the shareholders after the fact. “Such marketing campaigns are not appropriate for selling stocks. This isn’t laundry detergent, not toothpaste,” said Jürgen Kurz, head of the German Society for the Protection of Securities Holders. “People should buy stocks in companies, but they should be informed about the risk they are taking.”

The Süddeutsche Zeitung – one of Germany’s leading newspapers located in Munich – wrote at the end of 2014: “The T-Aktie is not just any old stock. It’s a symbol. It made Germans hungry to invest in stocks, and then killed that appetite for years to come. The investors felt cheated, tricked. Unrequited love. Today only half as many Germans hold stocks as in 2000.”

Intuition

Intuition. Latin intuitio: immediate understanding, recognition, seeing; to understand a situation, problem, dilemma immediately and without discussion or reflection. “Dein Verlangen nach Intuition blockiert den natürlichen Fluss der Wahrnehmung.” Your desire to be intuitive blocks the natural flow of perception. (Irina Rauthmann, German writer)

“Intuition, sprunghafte Einsicht, deren Schritte nachzuholen sind.” Intuition, sudden and erratic understanding whose steps need to be retaken. (Dr. phil. Manfred Hinrich, German philosopher, professor, journalist, author of childrens books)

“Intuition ist der natürliche Gegenpol zur Konzentration – nutzen sollte man beides, jedes zu seiner Zeit.” Intuition is the natural opposite of concentration. Both should be used, but at the right time. (Rüdiger Keßler, German philosopher)

“Intuition ist Intelligenz mit überhöhter Geschwindigkeit.” Intuition is high speed intelligence. Unknown.

External Expertise

Germans often involve external experts, who have a broader Überblick, in a critical decision making process. As a neutral party they can ensure that the most current analytical techniques are employed, thus minimizing the risk of errors causing serious harm. Even those Germans confident in their ability to execute a critical decision making process will refer time and again to the highest standards in their industry.

Expertise. Analysis performed by a neutral expert. Deep subject area knowledge. “She is considered one of the finest experts her field.”

The Germans believe that truly objective criteria and analytical approaches exist, that they can be identified and used. Germans constantly work towards objectivity. For them analysis can only be of value if objective.

Standards. English standard: something which is considered to be the best in its kind, a model, an example; the quality against which all is compared, measured; norm, measure, a plumb line.

Some of the highest standards for hygiene, for example, are found in German hospitals, restaurants and hotels. To receive several stars requires meeting those standards.

There are labels and awards for almost all products in Germany: Fair trade labels for products from the southern hemisphere; ecology labels for organic foods; safety labels for mechanical and electrical products used in the home or the workplace. All are based on norms and guidelines.