From time to time I will publish something under the heading “Decision Coaching 3.0.” The 3.0 designation means the blog post is something I think will be valuable to both executives and coaches. Typically it will be something about business culture or management trends.
I have discovered an amazing book, “The Puritan Gift: Reclaiming the American Dream Amidst Global Financial Chaos.” The book was on the Financial Times best seller list in 2007. I don’t know how I missed it. It has incredibly good reviews by impressive people. Peter Drucker said, “Tremendously interesting and impressive.”
Myron Tribus also reviewed it. Tribus was former Director of Advanced Engineering Studies at MIT, and former Undersecretary of State for Industry in the 1970′s. He said,
“I felt like a small boy who went out to shoot squirrels and came back with an elephant … I would insist that every person enrolled in the study of technology should be required to read The Puritan Gift before reading any other management book.”
This book is an elephant in a world of squirrel-sized business books. Edwards Deming would love this book. For several well written, in-depth reviews go to Amazon.com. Amazon reviewers like David Howard give it 5 stars.
The 2 authors of “The Puritan Gift” are brothers. Ken Hopper is a life long professional engineer with an interest in business history. Will Hopper is an investment banker. Their partnership is a model for what will have to happen if American industry is going to recover. We need leaders who have hands on knowledge about how products are designed and built. We need engineers who understand the craft of negotiating the world of modern finance. Business has an over supply of clever, confident MBA’s narrowly trained in the intricacies of mergers and acquisitions, accounting, and finance. We need leaders (and followers) who manifest the Puritan values of Rectitude, Pragmatism, Teamwork, and Leadership.
I’ve summarized some highlights of the Hopper book in two graphics. The first slide answers the question, What is the Puritan Gift? What culture did the Puritans bring with them from England in 1620? See the slide on the left.
The second is a visual summary of the history that the Hopper’s so eloquently review in the book. (See the slide on the right.) The Puritan Gift came to America on the Mayflower. The gift was given to the Japanese after WWII by a handful of Americans who were part of General Douglas MacArthur’s occupation. More recently the Gift has been passed to China. Where the Gift goes, industry thrives.
Japan and China have been realizing the fruits of the Puritan Gift. Meanwhile American industry has been overrun by professional managers and (so called) experts. For the most part these people 1) have no real higher purpose, 2) they have no aptitude for mechanical skills; 3) they have a moral outlook that puts self interest paramont; and, 4) they have little ability to gather, galvanize and marshal financial, material and human resources to a single purpose at whatever scale.
Hewlett-Packard is an example of a company that was built on the Puritan ideals. The founders, Bill Hewlett and David Packard, were hands on engineers and managers. They fostered a culture of of teamwork. Today their legacy of making the world a better place continues through their support of Stanford University and many other good causes.
Somewhere in the 1990′s Hewlett-Packard turned to professional and (so called) experts for leadership. The goal was growth. Today I read in the San Francisco Chronicle that HP is considering 25,000 job cuts. Under the leadership of professional managers they shed their instruments group (a bastion of engineering pride) and acquired Compac and EDS. Their recent tablet (read iPad) launch was like watching the Keystone cops. They launched the tablet product with an unfinished operating system, aborted the product launch, fired the CEO, hired a professional manager CEO (Meg Whitman), and announced that they would resurrect the tablet program. The company deserves better.
I believe decision coaching can be an effective way of moving business back to a culture of leadership, pragmatism and teamwork. Coaches can be developed from within the organization. Preferably they are people with strong technical training and experience. Coaches can move teams away from the winner-take-all, advocacy-based negotiation taught in most business schools. A good coach can move a team toward mutual learning and design.
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Stephen Covey, the author of “7 Habits of Highly Successful People,” has written a new book, “The 3rd Alternative.” In the book Covey makes the case that when faced with virtually any dilemma we can usually find a 3rd path. The 3rd path is usually preferred by all parties involved.
For example, suppose I want to eat Chinese food and my wife wants to eat French. In Covey’s model neither one of us has to lose if we can find an avant guarde restaurant that does dishes that are a mix of the best of Chinese and French cuisine.
In strategic decision making, the “3rd alternative” is called the Hybrid. In decision coaching our goal is to help a team find a solid, innovative strategy. We seek a strategy that will incorporate the best parts of all the alternatives we might seriously consider implementing. In other words, a hybrid.
Steve Jobs found a hybrid strategy as he built the new Apple. Today Apple is the best parts of a software company and the best parts of a hardware company. The glue that holds it together is the operating system. How do we find these hybrid solutions?
The Collaborative Design process is the best answer I can come up with. The process starts with framing the problem and laying out the alternatives. See the figure at left. If this is done well there is usually some tension between the alternatives, e.g., do we go for high performance or do we go for low cost? To resolve the tension, we gather information and evaluate the alternatives. By doing this we usually learn what is important and what is “good” about each option and what is “bad” about each. My experience in scores of strategic decision projects is that we can usually construct a “Hybrid” strategy that significantly outshines anything we were originally considering.
For example, in 1990, General Motors decided to develop an all new C5 Corvette. The old Corvette was tired and Japanese competitors were closing in. The team put in charge of Corvette planning was split. Some wanted a Corvette that would outperform the Batmobile, a Corvette that would insure that GM had “bragging rights. A Corvette with the “right stuff.”
The market researchers and systems engineers on the team had a very different vision. They believed a “kinder, gentler” car might be more in line with customer needs. A Corvette that was easier to get in an out of, one with more room in the cockpit, and a trunk big enough for 2 golf bags. A third group, driven by financial concerns, wanted the team to consider a minimalist option, i.e., a face lift and some quality improvements. The three options are laid out in the strategy table on the left.
In the analysis phase the team learned that the “Kinder, gentler” had the best overall prospects. Once the engineers learned the bottom line value of improving “comfort and convenience” they quickly figured out how to get much more for less money —- a hybrid. The transmission was moved to the rear (a transaxle configuration) to allow more foot room AND better weight distribution. A new hydroforming technology was used to drop the door sill so the car was easier to get in an out of AND lower costs. And, a trunk was added, just big enough for 2 golf bags. See the figure on the right. The car was comfortable — fast — and fun to drive.
The car was a winner. Car and Driver magazine said the car was “virtually perfect.” The Society of Automobile Engineers declared it the “best engineered” car of the 20th Century. GM could not make enough Corvettes to meet demand. The basic design is still going strong.
The strategy process is like drilling for water in the desert. Our initial alternatives are like test wells. We drill them quickly and use what we learn to decide where to drill the production well — the “Hybrid.”
The Organizational Development staff at General Motors studied different strategic decision processes in the mid-1990′s. In one study they estimated that the “hybrid” strategy was 30 to 200 times more profitable than the best “test well” strategy.
The slides used in this blog are from the Coach’s Guide to the Collaborative 
Design Process.
The mission of Baker Street is to provide decision coaches with the things they need to be successful.
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A New Profession: Decision Coach
A new profession is emerging. The publisher of Baker Street described the profession in a talk at the INFORMS Business Analytics and Operations Research Conference in Huntington Beach, California. You can review the slides from that presentation here.
Professional decision coaching requires a profound knowledge of decision making process, analytical tools, and applied probability. In addition it requires knowledge of facilitation, project management, and organizational learning.
Baker Street offers 3 publications that are fundamental to decision coaching:
(2) Coach’s Guide to the Collaborative Design Process
(3) Coach’s Guide to the Decision Analysis Process
Each of these publications is a set about 50 slides that can easily be used by consultants or team leaders to inform executives and train teams. They reflect the learning of 35 years of strategic decision coaching experience.
The mission of Baker Street is to provide decision coaches with the things they need to be successful.
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LinkedIn Survey Results: A good outcome is the same as a good decision. True, False, or “I don’t know.”
Three weeks ago I posted this survey on several LinkedIn Groups. The groups are mostly concentrations of consultants, strategic planners, and researchers. There were about 700 votes.
The results are summarized in the figure on the left. 18 percent of the votes were for “True.” 78 percent for “False.”
The survey gives a rough indication of the level of understanding (or misunderstanding) there is about decision making among relatively sophisticated groups.
“False” is the correct answer A good outcome is not the same as a good decision. Imagine a drunk deciding to get into his car after a party and driving himself home. Suppose he arrives home without incident. We would say he had a good outcome. Did he make a good decision? No. He made a bad decision. Good outcome — bad decision. Good decisions can lead to bad outcomes when there are uncertainties involved, and likewise, bad decisions can lead to good outcomes.
This begs the question of what a good decision is. For a discussion of that topic see my earlier blog post, What is a good decision?
There were many thoughtful discussions of the “good outcome/good decision” topic on LinkedIn. One person quoted Napolean, ” Given the choice between a good general and a lucky one, I would pick a lucky one every time.” Napolean was no fool. He certainly knew that mistaking luck for wisdom is dangerous. It encourages all sorts of bad management behaviors (as someone else on LinkedIn pointed out.)
Another person quoted Machiavelli, “The actions of all men, and especially of princes—which it is not prudent to challenge—are judged by their results.” We all want good results. Surely Machiavelli knew that a good decision increases the probability of a good result. That’s why we want to make good decisions.
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Decision Coaching 2.0: Is enterprise modeling headed for a shakeup?
Here in Silicon Valley it seems like the standard greeting is, “What is your business model?” Entrepreneurs are diligently trying to raise money for new ventures. Young geniuses who barely know how to discount a cash flow are busy sorting out their “value chains” and “value propositions.”
The standard textbooks on business modeling are Michael Porter’s “Competitive Strategy” and “On Competition.” The essence of these books is summarized in the figures labeled, “Forces Driving Industry Competition,” and “The Value Chain” at the bottom of this blog post. Michael Porter has an active website where you can go to learn the lingo and stay up to date on business model thinking at Harvard.
My current favorite book on thinking about business models is “Business Model Generation,” by Alexander Osterwalder and Yves Pigneur. The authors capture the elements of modern business modeling and the key strategic interactions. They use clear graphics and up to date examples.
Veterans know that every business decision is linked to a business model. Hewlett Packard couldn’t make their TouchPad decision without thinking about its impact on the rest of their business. What would the TouchPad do to their portable computers? And how would it fit with their R&D portfolio?
A McKinsey survey of the types of decisions that executives have to make is shown on the left. Product decisions, like the TouchPad are right up on the top.
In all but the simplest strategic decisions we need to build a spreadsheet or computer model. The model needs to capture the parts of the business that are relevant.
If there are more than 4 variables involved in a decision then it is a mistake not to use a model. Human beings are capable of keeping track of about 3 things at a time. Computers seem indifferent to complexity.
Building business or enterprise models has always been a sort of boutique industry. Typically the models are dominated by the finance departments or bureaucracies. (The “Bean Counters” as Bob Lutz likes to call them.) Decision teams under pressure often skip the step of modeling markets, activities, channels, partnerships, and relationships because they don’t have the talent, the time, or the money.
I think the world of business modeling is due for a big shake up. A California start up, Kaggle could bust model building wide open. There is recent article in Forbes is titled, “Your Model Against Mine.” The article describes a bit of Kaggle’s business plan. Kaggle is funded by some of the top venture capitalists in Silicon Valley. They are currently focused on data-driven predictive models. This is understandable given the current focus on “big data,” analytics, data science, etc. This is bound to change.
I predict that within the next 5 years organizations like Kaggle will extend their scope to include even the most sophisticated top down business and enterprise models. When this happens corporate and government decision teams will be able to specify the elements of their enterprise that they consider relevant. Within days a computer realization of the model will be delivered – fully tested, benchmarked and linked to important data bases.
I hope I am right. More decision makers will have better, lower cost models. They will make better decisions.
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Linkedin Group responses to the question, “What is your favorite framing question?”
Two weeks ago I posted a discussion topic on several Linkedin groups. The post was “What is your favorite framing question?”
Many people commented. A few of their comments changed my frame. No surprise. That’s what framing questions (or exercises) are supposed to do.
Here is an edited selection of the comments. Read more…
What is a good decision?
Bain Consulting started a new initiative recently, “The Decision-driven Organization.” I like the idea of looking at a company through the lens of the decisions that it makes. Decision making is where thinking and doing overlap. There is a lot of leverage in that overlap. Read more…
What is your favorite framing question?
Framing is probably the most important aspect of strategizing or decision-making. Too often we get the right answer to the wrong question.
Good framing starts with good questions. What are the good framing questions? Read more…
Barabba tells all in new book
Vince Barabba is a market research and strategic planning guru. He knows a lot about listening to the Voice of the Customer and how big organizations make decisions. In the 199o’s he was the executive in charge of Corporate Strategy and Knowledge Development at General Motors.
Vince came to GM from Kodak. Before that he was the Director of the Bureau of the Census — twice, under two different parties. Early in his career he was part of the brain trust that helped put Ronald Reagen in the White House. Remember, “It’s Morning in America.”
Vince is still at it. As we speak he is a member of a citizen board responsible for voter redistricting in California. This is a smart man with lots of solid experience.
I worked with Vince when he was at General Motors. He was there from 1985 to about 2001. I was there from 1989 to 1997. Vince was my client and my mentor. I was leading a team of consultants from Strategic Decisions Group (SDG) at the time. My team went wherever Vince asked us to go. We were at the eye of the hurricane. It was a fantastic opportunity to learn. Vince’s team was teaching an elephant how to dance. Read more…
A new profession is emerging: decision coach
I believe decision coaching is emerging as a new profession. The objective of this blog post is to explain why this is happening and to describe the decision coach. This new professional helps teams make good decisions by providing process, tools, facilitation, and project management. I believe that decision coaching will be the handmaiden that brings management science and engineering into top levels of corporations and government.
Coaches are needed wherever teams are engaged in a repetitive game. They are responsible for building a team, teaching best practices, and carrying lessons learned from one game to another and from one season to the next. The coach and his staff are a repository of knowledge and skills. The coach is also the focus of team learning and knowledge management. The players go on to other pursuits. The coach stays.
WHAT ARE THE STRATEGIC DECISIONS AND HOW DO THEY GET MADE?
A McKinsey Consulting survey of 2,327 executives from the full range of industries, regions and functions shows the goals of strategic decision-making.
The natural way to make these decisions in most organizations is to form a team. The team consists of three groups:
1) Decision makers. Usually these are executives. As Peter Drucker said, “ Decision making is only one of the tasks of an executive. It usually takes but a small fraction of his time. But to make decisions is the specific executive task.”
2) Stakeholders. These are people who have a strong interest in the decision. They are often the people who will do the implementation. They have the profound knowledge of “how things are done around here.” Many of these people are strong advocates, they have a position that they want to promote or an interest they want to protect. These people are a fountain of innovative ideas and they are authorities on “what is possible around here.”
3) Experts. These are the scientists, cost estimators, market researchers and other experts that the team relies on for information. They are specialists in important topics. Their responsibility is to provide data, models and judgment in an unbiased way. They are also a source of innovative ideas.
Usually the team muddles through. Decisions do get made. Too often the experience is frustrating and inefficient. Executives get impatient with the unfocused deliberations of the team, they grab the ball and they run with it. Many opportunities for innovation are lost. Implementation is clumsy for a long list of reasons. There is little or no learning. People go on to do their operational jobs. The next “strategy team” starts from scratch.
Teams work better and the prospects for a good decision are better if a fourth role is defined: the decision coach. The coach brings 4 important things to the table: process, tools, facilitation, and project management.
I’m going to describe what I believe is the ideal coach, at least for the kinds of decisions identified by McKinsey. (Few people have the full portfolio of coaching knowledge and skills. The person who did would be a sort of “super coach.”)
PROCESS
A coach needs to be proficient in 2 processes. The first is the decision 
analysis (DA) process as conceived by Professor Ron Howard in the 1960’s. The process combines decision theory, system analysis, and probability theory in a practical, straightforward way. The DA process is the analytical backbone of the second process, Collaborative Design.
You can see from the slide to the right that the Collaborative Design process begins with framing and ends with synthesis. Inappropriate framing is the root cause of most bad decisions. Decision coaches have to be good framers.
Synthesis is the skill that takes us from analysis to design. Design is the intersection of analysis and synthesis. I remember a college course titled, “Electric circuit design: analysis and synthesis.” The design concept has been a part of engineering for a long time. Steve Jobs would probably call synthesis “connecting the dots.” Apple is good at it.
I define “collaboration” as the situation when all parties try to follow the aims, assumptions and action repertoire of the Chris Argyris Mutual Learning Model. See the figure under “facilitation.”
TOOLS
Decision coaches have a bag full of tools. The ones I have found most useful 
are listed in the figure below. They range from framing tools like decision hierarchies to the Bayesian updating of information.
Virtually every complicated decision will involve models. Computer based mathematical models are a powerful way for groups of people to think together and bring expertise from many disciplines to bear in a rigorous way. It takes skill to build models that are technically sound. It takes even more skill when many people are involved. An experienced coach knows how important it is that the team takes ownership of the model(s). It has to be “our model,” and not “the model” or “your model.”
In the mid-1980’s Herb Simon, the first winner of the Nobel Prize in economics, gave a lecture at Stanford University. He discussed the slow, but unrelenting march of critical thinking about complex social problems.
Toward the end of his talk he stated that he thought the computer-based, mathematical model was perhaps the greatest invention of all time. I was a bit taken back. I was expecting him to suggest something like the microprocessor, not the esoteric computer models I was building at the time.
He went on to explain that these models were so important because they offered the first opportunity for groups of people to think collectively and rigorously about very complicated problems. Individuals can model parts of the problem and then combine their knowledge with that of other people in a transparent, logically consistent way. Humankind has never had this capability.
When used properly, these models are like meta-neural networks. They combine the thinking of many brains. They capture the thinking in a way that can be shared and refined by many people spread out over the globe. Model building and validation is an important skill for coaches. Typically, it is not a skill of the executives, stakeholders, or experts.
FACILITATION
Meetings and interviews are the blocking and tackling of organizational decision-making. A professional level of understanding of best practices in leading meetings and conducting interviews is a coaching requirement.
We know that we are subject to a long list of cognitive and behavioral biases. The coach is familiar with the important ones and knows how to mitigate their effects. The anchoring and availability biases are well known.
In group settings, the most destructive bias is the confirmation bias. We tend to hear only those things that are consistent with what we already believe. Just listen to a political debate on any issue.
At a higher level, the real challenge for coaches is knowing how to overcome organizational defenses. How do you get teams to talk about the warthog standing in the corner of the room? What if the warthog is the boss? Good inference is crucial to good decision-making. How can we get good inference when so many forces are working against it? Coaches can learn to recognize organizational defenses and the ways of dealing with them. These defenses are what make working with groups of people so challenging.
My enjoyment of team facilitation took a big bump up when I learned about Action Science from Chris Argyris and his colleagues. I learned about the difference between the descriptive Unilateral Control model (the way we naturally think and act) and the normative Mutual Learning Model (the way we say we should think and act.) Once I understood the concepts and mastered some of the facilitation tools I could recognize what was happening in conversations and intervene in a constructive way. Professional life was more rewarding and more enjoyable.
Finally, a coach knows how to put together good presentations. It is painful to watch good work go up in smoke because the presentations are bad. If you want to pick some low hanging fruit in a project, help the team put together a professional quality presentation. The President of the United States and I share the same mentor here, Edward Tufte.
PROJECT MANAGEMENT
Project management is what brings it all together. A good coach will know how to:
1) Select people and organize them – People determine the frame, the 
alternatives, the quality of the analysis, and the synthesis. The first question an executive will ask about a project is, “Who was involved?” They know that the people are the cornerstone of quality and credibility.
2) Select a process – Do we need a few facilitated meetings or full-blown campaign project?
3) Select tools – What level of modeling is appropriate? Which software do we use?
4) Develop a schedule – Speed needs to be balanced with cost and quality.
5) Estimate costs – There is always a bottom line.
KNOWLEDGE MANAGEMENT AND LEARNING
“When important decisions are not documented, one becomes dependent on individual memory, which is quickly lost as people leave or move to other jobs. In my work, it is important to be able to go back a number of years to determine the facts that were considered in arriving at a decision. This makes it easier to resolve new problems by putting them into proper perspective. It also minimizes the risk of repeating past mistakes. Moreover, if important communications and actions are not documented clearly, one can never be sure they were understood or even executed.”
From Doing a Job, by Admiral Hyman G. Rickover
It is the decision coach who is responsible for retaining lessons learned from one project to the next. The role is vital to organizational learning.
SUMMARY
A new profession is emerging: decision coaching. Decision coaches will combine many roles that are currently played by management consultants, strategic planners, and high level analysts. A handful of organizations have recognized the role and have benefitted immensely.
