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Being wrong versus being confused


Which is worse? Being wrong or being confused?



Gary Cokins
Gary Cokins
Let’s start with some definitions. To make a wrong decision means you were mistaken and erroneous. Your decision was incorrect for the problem to be solved or opportunity that could have been realized. (There is also an immoral, unethical, and illegal connotation; but that is a different variation of a poor choice. To be confused means you are baffled, bewildered, and perplexed. You cannot be positioned to make a correct decision because your thinking is muddled and clouded.

Embracing analytics can resolve both conditions.

Cultural issues related to wrong choices

An example of being wrong might be if you purchased a large top load clothes washing machine that did not fit in the space that a traditional front loading washer would have fit. Using the same example, being confused would be if you did not understand the differences between the two types of washers in terms of benefits, water consumption rates, and so on. The result typically is you postpone the decision.

Postponing a decision from being confused reduces the risk and possibly the embarrassment of making a mistake but it also can mean missing the opportunity to have gained. Both involve risks. Different cultures approach risk in different ways.

Geert Hofstede, a Dutch researcher in social psychology, has authored provocative research about Eastern versus Western culture’s attitudes toward risk that sheds light on multi-cultural differences with risk appetite and decision making. One of Hofstede’s studies developed an Uncertainty Avoidance Index (UAI) that measures a nation’s (or a society’s or organization’s) tolerance for uncertainty and ambiguity – its appetite for risk.

To abbreviate the details of the study’s findings, it is convenient to describe the two countries with cultures representing opposite and extreme ends of the UAI continuum. By better understanding these contrasting behavioral differences, project champions striving to successfully business analytics may better succeed. In Hofstede’s study, UAI scores can range from 0 (pure risk takers – such as casino gamblers) to 100 (pure risk avoiders – very cautious and conservative). Of all the nations, Americans ranked lowest implying fewer rules, less attempts to control outcomes, and greater tolerance for a variety of ideas, thoughts, and beliefs. In contrast, Japan ranked highest in its UAI score implying high levels of control in order to eliminate or avoid the unexpected. A type of culture such as Japan does not readily accept change and is risk averse.

Is your decision making an Eastern or Western type?

How can UAI apply to managing organizations? My belief is there are obstacles and barriers that are slowing the adoption rate of business analytics. They are no longer technical ones but rather involve people, culture, and human nature’s resistance to change.

How would you personally assess the UAI of the organization you are employed by or one you keep an eye on or am involved with? Does it have a low UAI (USA-like)? This implies having self-concerned employees, less conformity, reliance on intuition and gut-feel to “wing-it”, avoiding rigid rules, low acceptance of authority, low trust levels, and reasonable tolerance for conflict, tension, and dissent.

In contrast, is your organization at the other extreme with a high UAI (Japan-like)? This implies being collectivist with needs for consensus, more conformity, very analytical, strict and enforced rules, high acceptance of authority, high levels of trust, and little tolerance for conflict.

Implications for success with analytics

Ultimately all organizations will need to create a culture for analytics and fact-based decision making. Regardless of an organization’s type of culture, what this all means is we must elevate the importance of organizational change management and behavior modification. Inevitably we will need to learn change management as “on the job” training.

So which is worse? Being wrong or being confused. They are both bad with adverse consequences. Why not be smarter and safer at the same time?

Gary Cokins, CPIM
(gary.cokins@sas.com; phone: 919-531-2012)
blogs.sas.com/content/cokins

Gary Cokins (Cornell University BS IE/OR, 1971; Northwestern University Kellogg MBA 1974) is an internationally recognized expert, speaker, and author in advanced cost management and enterprise performance and risk management systems. He is a Principal in business consulting involved with analytics-based enterprise performance management solutions with SAS, a global leader in business intelligence and analytics software. He began his career in industry with a Fortune 100 company in CFO and operations roles. He then worked 15 years in consulting with Deloitte, KPMG, and EDS. His two most recent books are Performance Management: Finding the Missing Pieces to Close the Intelligence Gap (ISBN 0-471-57690-5) and Performance Management: Integrating Strategy Execution, Methodologies, Risk, and Analytics (ISBN 978-0-470-44998-1). Mr. Cokins can be contacted at gary.
cokins@sas.com
123 words.

Mardi 29 Mai 2012
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