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A 5-Step Model for Testing Leaders’ Decisions

Posted on by Isaac Baker

*Estimated read time = 5 min.

*Short on time? Skip to the 5-Step Model below, then contact me to discuss how I may assist you and your organisation in testing and informing your decisions.

Email me -> ibaker@livingstones.com.au

Phone me -> +61 7 3833 1200

How do most leaders justify their decisions? Do they test the effectiveness of their decisions with an incremental and sensible approach? Or do they sink a substantial time, effort and monetary investment and hope for the best, only to later find out whether it was a “good” decision?

Leaders’ decisions have a disproportionately large impact on the successes and failures of organisations. For this reason, it is crucial leaders’ business altering decisions are based on solid empirical evidence. Decisions with massive ramifications require rigorous testing and supporting evidence, with such consequential decisions ranging from strategising a change in company direction, to implementing a change management initiative, to venturing into unchartered markets, or even to incorporating a new technological platform.

It is my contention that leaders should not gamble with their decisions. Instead, they should thoroughly test their important decisions and its assumptions on a small scale, then gradually scale their decisions once supported by empirical evidence.

I offer a common-sense, but sorely underutilised approach to decision-making in business.

This approach applies a scientific methodology to empower leaders to make more effective and less risky decisions while avoiding unnecessary time, effort and money wastage.

A 5-Step Model to Testing and Making Decisions

I propose leaders adopt our 5-Step Model for testing and informing their decisions. This approach to testing important business decisions is based upon the scientifically rigorous ‘Randomized Control Trial’ (RCT) methodology, which is seen as gold standard protocol for verifying the effectiveness of interventions (e.g., psychological and drug treatments).

In the context of business, this approach involves creating alternative versions of a decision and randomly implementing these decisions to teams, departments, or locations within an organisation. Even without generating alternative decisions, a decision’s effectiveness can be compared to a group that does not receive the decision (i.e., a control group).

A Case Study: Testing Wellbeing Initiatives

In this case study, a CEO and the board of a company wish to implement a large-scale wellness initiative to their +10,000 employee organisation. Senior leadership have worked with experts to amalgamate their wisdom, time and resources to devise the perfect initiative. It is now set to be rolled out en masse throughout the organisation. In one fell swoop, this initiative is hoped to increase job satisfaction, boost mental wellbeing, and cut stress for employees.

All aboard the success train! Next stop, monk-level enlightenment and mental wellbeing. Right?

There is one thing that doesn’t sit quite right with me: Can we not do better than “hope” to inform our decisions?

The answer: Yes, we can do better. We need proof that the initiative (i.e., decision) has and can work. Here is why:

  1. a)     How can we be certain the initiative will work?
  2. b)    Has the initiative been tested in preliminary phases before making the decision to implement a large-scale rollout?
  3. c)     Has the initiative been tested and compared to others that may be equally, if not more, effective?
  4. d)   Ultimately, are they willing to spend $100,000s to $1,000,000s on an unproven initiative?

Our 5-Step Model remedies these issues by testing the decisions and informing the most optimal decision to make. The model is outlined below, as applied to this case study on wellbeing initiatives.

The 5-Step Model offers a robust, valid and risk-averse approach to testing and informing important business decisions.

As a behavioural scientist, I am well positioned and eager to offer my skills and expertise to guide your organisation in implementing our rigorous 5-Step Model.

Do feel free to contact me if you’re interested in discussing how this process works or how behavioural science can help you and your organisation. 

Email me -> ibaker@livingstones.com.au

Phone me -> 61 7 3833 1200

Written by Isaac Baker

Isaac Baker

Isaac has a strong passion for understanding the science of human behavior to create unique, specialised interventions to solve complex people problems.
Through the lens of psychology, behavioural science and behavioural economics, Isaac works across the Livingstones suite of services in organisational development, bringing a data-driven approach to inform culture diagnostics, behaviour change and targeting improved individual, team and organisational decision making to improve business performance and effectiveness.

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