PE 10: Sway Their Decision Part 1

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This is the first of three podcasts about the psychology of decision making, which is a fascinating and difficult topic, mostly because the way in which people say they decide is often much different from how they actually do. Business communication is ideally completely rational and evidence-based, but we all know it’s more complicated than that. There are at least four approaches to decision-making, which I call Randy, Aileen, Norma, and Gus.

Rational Randy has a mind like a spreadsheet and relies for his decisions completely on a precise calculation of expected benefits, weighted both by priority and probability. Randy wallows in weighing, gauging, estimating, calculating, weighted decision matrices, sensitivity analysis, expected value, and return on investment. He has tons of questions, and likes footnotes, sources and large random samples. When things get complicated, he asks for more data. Randy is officially considered the decision maker, but for all his rationality, he seriously overestimates his influence within the committee. This is because the other members have a quiet conspiracy to let Randy claim credit for their work.

Aileen tends to support Randy. She likes to think of herself as completely rational, but—usually without realizing it—leans one way or the other in reasonably predictable ways depending on how the information is presented. Although she respects facts and numbers, she does not treat them all equally. She’ll pay special attention to some and completely overlook others, sometimes give greater weight to those that are presented as losses rather than gains, or she might let the first ones she hears affect how she sees the next. When things get too complicated for her, she will take shortcuts, although she denies this.

Norma has a strong sense of who she is and what’s important to her, and makes decisions based on norms or rules that are integral to her identity and values. She sometimes aspires to being a better person, and will decide based on the question: What does a person like myself do in these situations? Norma does not get involved in all the different decisions, but when she does decide to get involved, she can carry a tremendous amount of weight—sometimes even veto power. Things don’t often get complicated for her, because she tends to see the world in black and white.

Gus is the laziest but can be the most powerful member of the committee. He decides totally on his gut, what feels right. Gus usually makes snap decisions, and can sometimes change his mind just as quickly. He’s in the driver’s seat when Randy is not paying close attention, and even when Randy gets deeply involved he’s working behind the scenes in cahoots with Aileen and Norma. He’s very jealous of his status and is extremely concerned with fairness. Gus doesn’t like to work hard, so he usually tells the others to just accept his decision, and if they want to use their language to make it more palatable to others, that’s fine with him.

It’s difficult to influence decisions when you don’t know which of the four is in charge, and it’s different for every decision. And what makes it really tough is that all four reside in every individual mind!

We’ll start with what it takes to influence Rational Randy’s decisions, because companies have invested a lot into systems that take the subjective human element out of their choices, which is why we have RFPs that weigh several pounds that feed into weighted decision matrices and algorithms which spit out clear winners and losers. If you’re selling to them, you must absolutely be in their ball park to have any chance of winning.

One model is the weighted decision matrix, which is what Amazon is using to decide where to establish their second headquarters. They’ve narrowed down the choice to 20 cities. It’s a huge decision, and it will be based on eight major criteria.

The other principal model is the investment decision, which includes calculations of differential cash flows, their expected timing, run through a model that adjusts for risk using the expected cost of capital. It’s all very neat and precise; all you have to do is plug in the appropriate numbers and the best logical answer spits out the other end.

Although we know that there’s a lot of room for subjectivity even in these objective models, we have to be able to speak the language and provide the information needed to succeed in Rational Randy’s world for major business decisions. There are three key points:

• Speak the language: business and financial acumen is a key competency to make you a persuasive communicator.
• Answer the mail: you have to have the answers to these questions, or you won’t even get a chance to go any further.
• Start early: it’s your best chance to influence what will be chosen to feed into the rational decision model.