Waves: Crash or Rise
How reactive or proactive is your organization in its operational decision-making?
I recall a particular moment in my career. My company had just hired a new EVP of Operations who was currently addressing the corporate operations support technical group of which I was part.
He came out strong and read us the riot act. Part of his message was, “You bring us the problems, and we’ll make the decisions.” What he meant was, the leaders would be making the decisions around here, not the engineers, thank you very much.
Senior leadership felt it necessary to remind this technical group of who was in charge. This fellow took an initial meeting as an opportunity to assert his authority. Nice to meet you, too!
Practitioners bring problems with options and recommendations. Leaders make decisions. Shouldn’t that be how it works? I thought that seemed rather reasonable, aside from the way it was delivered.
Then I had a second thought. What was going to change?
In years prior, I had become a student of the operations management game, although it is certainly no game. Ours is a serious business. I’d watched carefully how operational leaders acted and reacted to the challenges they faced. In particular, I became interested in how they made their decisions. Let’s just say I came away wanting.
I was wanting because I had context for what great decision-making might look like. I’d gone outside my organization to learn what the good and best asset management practices were. I’d begun building and learning from a strong international network of talented practitioners.
When I viewed my organization and its leaders through this new lens I saw things differently. Our organization was very reactive. Our operational leaders seemed to bounce from one serious issue to another.
We talked a good game about making data-informed decisions, but the truth was our leaders often didn’t know how to integrate quantitative data or qualitative expert judgement from subject matter experts into their intuitive models. They primarily used their experience and judgement to make decisions from the hip without a suitable level of input or rigour.
We had long-range plans but blew them up with regularity. The decision-making, un-making and remaking were very inefficient and ineffective causing lots of churn for resources inside the organization. All this guaranteed decidedly mediocre operational outcomes that our benchmarking results confirmed.
“The most important decision you will make is how you will make your decisions.”
All this reminded me of the surf and my love/hate relationship with the ocean.
Many years ago, my family was vacationing in Maui, Hawaii. We spent one day with family friends at Big Beach, also known as Makena or Oneloa Beach. This beach is renowned for its short-breaking, pounding surf. We heard its other nickname was “brokeback beach”.
Big Beach Warning Signs
It was a beautiful day in paradise, the same as every day. The winds picked up while the waves grew larger as the afternoon progressed. Many people were playing in the surf. I decided to take my boogie board out for some fun. I was having a blast and I was selective in my choice of waves. The small ones I’d let pass. The big ones I’d dive under. The just-right-sized waves I rode.
All was well until one particularly large wave rolled in. I tried to dive under but the wave caught my board. In a moment my board and body were flipped and the breaking wave pounded me headfirst into the surf. I heard a crack as my neck snapped back.
“Oh, no, what have I done?” was my first thought. Stunned, I was tossed around under the wave as it proceeded and recessed. I somehow found my feet and tried to stand. “Am I alright?” I wondered. Another wave hit me from behind and I went under again but thankfully was pushed into shore. I stood again. My family and friends who had been watching were standing now, very concerned. Like a zombie, I plodded slowly to the edge of the water to collect myself and assess the damage.
I had sand embedded in my forehead from the impact but otherwise, I was unharmed, or so it seemed. The incident scared me terribly. I shook for hours. It took days and weeks to recover. Each day that trip my neck grew more sore and stiff. Even more alarming, I had numbness in my pinkie fingers. Had I suffered some nerve damage after all? Better that than a broken neck, I supposed. I saw my friend and chiropractor for treatment when I returned home. Fortunately, the numbness disappeared after a few weeks.
I was so lucky to survive that ordeal without permanent injury or even death. I thought about worse outcomes and the impact not just to me, but my family. The warning signs were there. I wasn’t careful enough and it almost cost me dearly. I learned my lesson. I decided to stick to surfing out past the break from that moment on.
Sometimes our leaders are figuratively standing near the shore getting pounded by the surf. They get bowled over by a big wave and struggle to regain their balance and breath before the next wave hits. Rinse and repeat. It’s ugliness and chaos to be at the mercy of an angry ocean. These are the reactive leaders who just can’t get seem to get fully on top of their operations. Sure, it’s still a day at the beach but nothing is rewarding about it.
Leaders in progressive organizations are the surfers on their boards riding the waves. These are proactive leaders who see trouble coming and take full advantage of every opportunity. Riding that wave, being one with the ocean is to achieve a state of beauty and grace.
What’s the difference between a reactive or proactive leader? A proper surfboard, some quality lessons and a willingness to get out beyond the breakers. Leave your troubles behind and enjoy the ride of a lifetime.
We can live beside the ocean
Leave the fire behind
Swim out past the breakers
Watch the world die
- “Santa Monica”, Everclear
Courageous leaders in progressive organizations need to get out past the breakers. To accomplish that, you need a good framework for decision-making.
Decisions are structured choices made under conditions of uncertainty and complexity. There is a formula for good decision-making underpinned by good problem-solving.
Be deliberate. Anticipate what important decisions need to be made. Understand how to make the best decision possible at every opportunity, or the wave will pummel you into the surf. Less than optimal decision-making a major source of value leakage in organizations.
What is the decision to be made?
What exactly is the problem being solved?
When is the best time to make the decision?
Who ultimately makes the decision? Who needs to contribute and how?
What knowledge do you need?
What confidence do you need in that knowledge?
What are the alternatives to be evaluated?
How much rigour should be applied congruent with the complexity?
Should you be satisficing or optimizing?
What constraints are in place and can they be challenged?
What biases are at play and can they be minimized?
What if you’re wrong? Can you live with the consequences?
Great leaders empower their organizations to make consistently more good decisions than they use to, and better than their peers. There’s a finite number of decision types in asset management. Each decision type can be set up to deliver more good results. It pays to develop a structured framework to recognize and enable the best decisions at every opportunity.
Our EVP of Operations turned out to be a decent leader, despite the rocky start. Ultimately, not much changed. That leader and the organization as a whole never fully embraced holistic and integrated asset management practices.
The company never took full stock of their decision-making processes or build a framework to handle the multitude of choices it faced. The organization went along seemingly satisfied with its mediocrity as it continued to be battered by the surf, the same as every day.
Scio Asset Management Inc. empowers operational leaders to See. Think. Decide. Act.