Helping Managers Make Better Decisions

Dr. Tanja Beck­er: Indeed it has. I’ve had to face three dif­fer­ent dif­fi­cul­ties right from the start. For one thing, of course, there’s look­ing after my chil­dren twen­ty-four hours a day. Then there’s the sober­ing image of planes parked at so many air­ports in Ger­many alone. And final­ly, there’s the vul­ner­a­bil­i­ty of a start-up that had begun to show very pos­i­tive incom­ing orders and now has to deal with new chal­lenges result­ing from the virus.

Beck­er: Sim­i­lar to many self-employed peo­ple or restau­ra­teurs, start-ups of course have not accu­mu­lat­ed the liq­uid­i­ty to counter the very rapid effects of a sud­den drop in sales. As you noted, we began by focus­ing on air­lines and other com­pa­nies in the trav­el indus­try. This sec­tor was the first to be hit by the virus, and will be the last to recov­er. That means we had to pivot and focus on other clients and mar­kets. The signs are slow­ly sug­gest­ing that we’ve taken quite a suc­cess­ful tack. One of the key fac­tors for suc­cess as a start-up is the abil­i­ty to rethink prod­uct devel­op­ment and strat­e­gy.

Beck­er: Train­ing is cru­cial for han­dling that type of predica­ment. It pre­pares us in tar­get­ed ways for con­crete sit­u­a­tions, but it also helps us inter­nal­ize approach­es and pro­ce­dures. You might have heard of the “avi­ate, nav­i­gate, com­mu­ni­cate” prin­ci­ple, for exam­ple. In sim­ple terms, the first thing to do is to keep the plane in the air. Then you want to work on its loca­tion and direc­tion. Only then do we com­mu­ni­cate with flight safe­ty per­son­nel or our col­leagues in the cabin. Train­ing not only pol­ish­es your skills but also rais­es your level of expe­ri­ence. This helps build up a pilot’s abil­i­ty to take action and make deci­sions intu­itive­ly in actu­al prac­tice. That in turn frees up capac­i­ties to deal with addi­tion­al prob­lems. To put it sim­ply: faced with an emer­gency sit­u­a­tion, I as a pilot should have suf­fi­cient reserves to con­cen­trate on the essen­tials and not become hec­tic in the process.

Beck­er: It might be slight­ly pre­sump­tu­ous to say the method can guide some­one com­plete­ly out of a dan­ger zone. How­ev­er, very com­plex sit­u­a­tions can arise on a plane, which are def­i­nite­ly com­pa­ra­ble to the pan­dem­ic and its effects on the oper­a­tions of a hos­pi­tal or large com­pa­ny. Deci­sion-mak­ers often find them­selves faced with the typ­i­cal dilem­ma of more than one option. And the FORDEC method helps select the option with the low­est impact …

Beck­er: That’s the idea, yes. The FORDEC method uses a deci­sion-mak­ing process based on oper­a­tions research. The under­ly­ing sci­en­tif­ic prin­ci­ples apply not only to the deci­sion-mak­ing process­es in avi­a­tion but also to other areas, includ­ing every­day life or wher­ev­er humans are involved. We often make our deci­sions on an ad hoc basis, or are influ­enced by our pref­er­ences and assump­tions. We tend to use heuris­tic prac­tices like trial and error. But pre­cise­ly that type of prac­tice is often sub­ject to cog­ni­tive bias. That’s because peo­ple are rarely able to objec­tive­ly and com­pre­hen­sive­ly com­pile all the facts rel­e­vant to a given sit­u­a­tion. FORDEC enables us to achieve this goal rel­a­tive­ly quickly—without using com­plex deci­sion­al matri­ces like prob­a­bil­i­ties or the math­e­mat­i­cal oper­a­tors need­ed in pre­scrip­tive deci­sion-mak­ing.

Beck­er: FORDEC com­bines a stream­lined pre­scrip­tive deci­sion-mak­ing process with both expe­ri­ence and the prover­bial gut feel­ing. That’s impor­tant in avi­a­tion, but sure­ly also in med­i­cine and busi­ness. A descrip­tive approach will obvi­ous­ly make use of human expe­ri­ence. Pilots have to be aware of heuris­tic ele­ments and cog­ni­tive bias­es. That’s why train­ing is so impor­tant for them. They have to school their pow­ers of dis­cern­ment, and be ready to use them imme­di­ate­ly if called upon.

Beck­er: The “F” stands for “facts,” and a key part of the method con­sists of ana­lyz­ing the facts of a sit­u­a­tion. This is based on com­pre­hen­sive sit­u­a­tion­al aware­ness. Which in turn is an essen­tial part of a pilot’s every­day work—including the abil­i­ty to draw on past and present infor­ma­tion as well as mak­ing a prog­no­sis for the future. The avail­able “options” in avi­a­tion might be var­i­ous alter­na­tive air­ports or unsched­uled land­ings. In other sec­tors, these might include invest­ment deci­sions, treat­ment meth­ods, or dif­fer­ent process­es or tech­ni­cal sys­tems. The “risks and ben­e­fits” include eval­u­at­ing the rel­e­vant options by means of defined cri­te­ria such as safe­ty or oper­a­tions. So the option of land­ing at an air­port from which you couldn’t take off again would not make much sense if you only had a minor tech­ni­cal prob­lem. Mov­ing on to the “deci­sion” stage, this is where the choice is made by tak­ing major con­sid­er­a­tions like safe­ty into account. Deci­sions in peri­ods of cri­sis should ensure that the core oper­a­tions, or cen­tral proces­sor, of an enter­prise still func­tion in order to ramp them up faster again when the time comes. After “exe­cut­ing” the req­ui­site actions—here we’re at the “E” in FORDEC—you then move on to the “check,” which is a point that is often neglect­ed. But it can be very impor­tant to eval­u­ate your deci­sions, also with respect to any changes in the under­ly­ing con­di­tions.

Beck­er: I would def­i­nite­ly sup­port that idea. That’s the rea­son why many com­pa­nies have their own com­pre­hen­sive selec­tion pro­ce­dures and devel­op­ment tracks for top man­agers, or use the ser­vices of spe­cial­ized providers. The qual­i­ties to be eval­u­at­ed are open to dis­cus­sion, how­ev­er, and would depend not least of all on the company’s phi­los­o­phy or on gen­er­al cul­tur­al con­di­tions. But the actu­al selec­tion of lead­er­ship per­son­nel is just one side of the coin. As expe­ri­ence in avi­a­tion shows, fur­ther devel­op­ment of lead­er­ship skills with the help of work­shops, train­ing pro­grams, and also test­ing is an area that could be pur­sued more con­sis­tent­ly. Stud­ies in the avi­a­tion sec­tor have shown that iso­lat­ed sem­i­nars are not ade­quate because the knowl­edge gained at such events will dis­si­pate if not applied.

Beck­er: Top man­agers have a high level of respon­si­bil­i­ty for peo­ple and their com­pa­nies, but not nec­es­sar­i­ly direct­ly for human lives, with the excep­tion of the health­care sec­tor. The main dif­fer­ence between pilots and man­agers, includ­ing doc­tors, is that we as pilots are also always direct­ly affect­ed by the deci­sions we make. Specif­i­cal­ly, our lives are also at play. A depart­ment head at a mater­ni­ty hos­pi­tal here in Ham­burg hit the nail on the head in describ­ing the dif­fer­ence between doc­tors and pilots. If med­ical deci­sions always direct­ly affect­ed the deci­sion-mak­ers as well, the need for reg­u­lar fur­ther train­ing in human fac­tors would be obvi­ous. There would also sure­ly be a dif­fer­ent approach to deal­ing with error. This insight can be sim­i­lar­ly applied to many other parts of the econ­o­my.

Beck­er: To my mind, the abil­i­ty to reflect on one’s own deci­sions and per­for­mance is cru­cial for mod­ern lead­er­ship per­son­nel. But that’s not what we cur­rent­ly see in either busi­ness or pol­i­tics, espe­cial­ly fol­low­ing poor deci­sions. Peo­ple can ruin their careers if they open­ly address their mis­takes. This is a flaw in the sys­tem at large. We need to bring about a fun­da­men­tal change here, although that will take some time. How­ev­er, a good first step for lead­er­ship per­son­nel would con­sist of an ongo­ing series of train­ing and edu­ca­tion, also in the form of coach­ing. One shouldn’t for­get the fact that a CEO is often alone with his or her deci­sions.

Beck­er: The role of lead­er­ship per­son­nel is chang­ing not only because of the greater com­plex­i­ty aris­ing from glob­al­iza­tion, dig­i­tal­iza­tion, and arti­fi­cial intel­li­gence, but also due to new chal­lenges posed by employ­ees’ chang­ing needs and desires. Lead­ers have to be able to inspire. Their job descrip­tion extends beyond sim­ply man­ag­ing a sys­tem. They need to devel­op authen­tic lead­er­ship qual­i­ties, to be aware of their sta­tus as role mod­els, and to moti­vate their employ­ees in keep­ing with the aims of their com­pa­ny. Peo­ple are not nec­es­sar­i­ly born lead­ers, but they do con­tin­u­ous­ly devel­op their qual­i­ties over the course of their pro­fes­sion­al and per­son­al lives. A key part of lead­er­ship suc­cess con­sists not only of tech­ni­cal exper­tise but also of inter­per­son­al skills.

Beck­er: Lead­ers can only be suc­cess­ful over the long term if they rec­og­nize the impor­tance of psy­cho­log­i­cal well-being for those in their sphere of influ­ence, and how they affect that state of being. They must be able to instill trust, com­mu­ni­cate hon­est­ly, and value those around them. They should bring a num­ber of impor­tant qual­i­ties to their job in the first place. But some types of inter­per­son­al skills can be taught, includ­ing both com­mu­ni­ca­tion and deci­sion-mak­ing. And for lead­ers to apply the prin­ci­ples they learn in prac­tice, their com­pa­nies need to have suit­able basic con­di­tions with respect to things like feed­back, meet­ing rules, and hier­ar­chies. This is why I use not only train­ing and con­sult­ing but also the holis­tic approach of accom­pa­ni­ment. The first step con­sists of exam­in­ing var­i­ous human fac­tors in the form of audits. We then for­mu­late cer­tain mea­sures and put them into prac­tice togeth­er with the employ­ees. But the process is not yet fin­ished, because it’s impor­tant to con­tin­ue accom­pa­ny­ing them to mea­sure suc­cess, sim­i­lar to the “check” step at the end of the FORDEC method. Above and beyond that, I’m con­vinced of the rel­e­vance of con­tin­u­ous devel­op­ment for lead­er­ship per­son­nel. Indi­vid­ual coach­ing or spar­ring part­ners over the long term are some of the ele­ments of my approach.