9 Tips for Effective Decision-Making in Times of Crisis
4th June 2020
Making the right decisions is probably the most important skill you can have in life. In a crisis scenario, the decisions you make are even more crucial than under normal circumstances. The fact that you usually do not have much time and not much resources nor a large error margin in a crisis, puts a lot of weight on your shoulders. Therefore, this article will cover some crucial skills and discuss decision making in general.
1. Find your purpose & your principles
At the core of making decisions you will have a set of rules or constraints, which will help you in making any decision. This is a fundamental set of values/principles that you follow in any decision you make. The basis for your values and principles is your vision. Your vision basically states why you do, what you do. Your principles are how you do things. Obviously, you should have personal values and the organisation/family should have their values. Same applies for the vision. Only when your personal values and those of the organisation – your personal vision and the organisational vision - are aligned, will you make great decisions. If you do not have clear principles, you will end up losing credibility as no one understands what you are deciding.
There are some studies who investigate this further. For example: if you measure commitment to an organisation, employees with a clarified set of personal values will be much more committed than those who do not have a vision and principles. The commitment increases even higher if the personal values and organisational values are aligned. The same applies to family, sports club etc. Only if the company has clear values will you get proper commitment from your people.
Now, this applies for making decisions. If you must decide the future of an organisation in crisis, you need those values in order to know what the right decisions are. This starts with an organisational vision and then goes into the organisation’s values. If you look at your organisation now and there are no clear values or nobody follows them, you should fix this now. When you are in crisis and you realise that you do not have a purpose or a clear set of principles, you will either make bad decisions or you will lose valuable time by first working them out.
In our family’s big crisis, we did not really have clear values, and thus making decisions was an extremely hard thing. We also did not have a clear vision for why we are doing what we are doing. It has been done like that for hundreds of years, so why ask? In other cases that I experienced we worked out the values when we realized things were going pear shaped. This was already much better than in instances before, but still not ideal.
The Golden Circle © 2013 Simon Sinek, Inc.
2. Take care of your productivity muscle
Another crucial resource in a crisis is willpower. Willpower is like a battery - every decision you take will deplete your willpower. And you will have to recharge the battery to have more willpower. Once your willpower is depleted you will not want to make decisions. If you are forced to make them, they will most likely end up bad. This is the main reason why also in crisis it is important to check your personal health and that of other family members or employees. Eat properly, sleep enough and exercise. Even in a crisis putting in insane hours will only work for some time. Believe me I have been there and done it and once you are exhausted the mistakes, which will be very costly, will pile up.
As mentioned above every decision will deplete your willpower level, thus you should make sure to save your willpower for the most important decisions. Some successful leaders use different tricks to handle this. Some famous examples are Mark Zuckerberg, who wears the exact same clothes every day and has the same routine and breakfast every morning, as this will minimize decisions he has to take. Another good trick is to ditch your car for commuting. While you drive into work you will have already had to make hundreds of small decisions, which have already eaten up some of your willpower. Jeff Bezos as another example only decides important things in the morning. First thing of the day are the important things and after lunch there is no more important decisions. A good tip in a crisis is that hardly ever something must be decided so fast that you cannot wait until the next day. Especially when it is in the afternoon already. Also, it is good to take some time to mull over it. Let your unconsciousness work through the enormous amounts of data that are hidden in your brain.
3. Defy, commit and own
There are three particularly important decisions you should make right at the start of a crisis. These are decisions, which are recurring in a crisis and you might be facing them daily. They will come in different shapes and size, but by making the decisions once at the start you can turn these into habitual decisions and thus safe up your willpower for other decisions. There are three “base level” decisions to make at each turning point and with each problem that arises. What are the three problems/questions then?
Will we make it?
Should I keep going?
Who is at fault?
So, there are three important ingredients to solve these three questions (yes, the title of this paragraph gives it away):
Defy the verdict! No matter what others say, defy that you will fail and go for it!
Commit 100% to the challenge. You will not give up till it is truly over.
Complete Ownership! Own the crisis and stick up for your team. If you are the leader, everything is ultimately your fault.
With these three decisions you will be able to focus on each issue at hand and go into solving it. It will save you the time and energy. Why? Because essentially asking these three questions is pointless, especially in a crisis. Also due to psychological issues like the negativity bias you will mull over these and end up depressed.
4. Understand the laws of productivity
You will probably have heard of these before. There are two important rules in management and life:
Pareto’s law (or Pareto Ratio) states that usually you have a 20/80 ratio or even 10/90, sometimes even higher. Now this ratio means that 80% of the result comes from 20% of the effort. For more detail on this I suggest this article.
The most powerful part of Pareto in a crisis is that it applies to Effort vs Output. Leverage this to your advantage. Especially with decisions to be made of how to allocate resources – for example if you have to decide between customers, focus on the 20% which account for 80% revenue. It might not be according to your personal values but in a crisis, you cannot focus on all of them at the start. You also do not need all the information or need to know all the factors to make a decision. Sometimes you have formulated a plan of action or a solution for a pressing problem, but its only 80% finished and you are not 100% percent sure if it will work. Just go with it, iteration is the key to success in a crisis anyway. Try it and go back to the drawing board if needed. In a crisis you can often be happy if things are 80% done. Perfectionism is for the good times ahead of you after the crisis.
The next law is Parkinson’s law, which basically states that “work expands as to fill the time available for its completion”. Now in essence this means that you will take up all the time you set yourself to do your work. You might notice this in meetings, when you set one hour and 45 minutes are used for chit chat and the important things will be finished within 15 minutes. Parkinson says, that if you set 15 minutes you will save the chit chat and be done with everything. Time is of essence in a crisis and it is perfectly fine to challenge your team. Give them seemingly impossible deadlines and they will find a way to complete the tasks on time. And do not allow for excuses, when it comes to reaching deadlines. Be careful though that you don’t give them impossible deadlines, unless it is externally dictated. But then everyone in the team should give their all to get it done. Also, if a deadline is missed, guess who is ultimately at fault? You are! Either the deadline was too harsh, or you chose the wrong person for the task.
5. Slow down, iterate, pivot
In a crisis one of the most crucial resources is time - it is usually scarce. One would think speed is of the essence, so be fast when making decisions. Well, sadly is not that simple! Pressure is immense in a crisis and thus being quick is not a good advice. You will have many decisions to make when you are tiered, overworked and at times depressed. Would a fast decision be good if your conditions aren’t great? The navy seals are taught that no matter what happens there is always time to think first. Obviously in combat we are talking about a few seconds, but a family or business crisis will usually run on a different clock. There is always a few hours’ time to formulate your decision.
At the same time there is two crucial skills tied to time that you should keep in mind when making any decisions.
The first is iteration, which will help you be less worried of the consequences of your decision. Any solution you will try to execute in a crisis, will (as said above) only be partly ready and thus you will have to iterate. Realising that iteration is a normal part of any solution or process will give you more confidence in your decisions. Be prepared that your decision will not be correct at first and you will encounter obstacles, which may send you back a few steps. That is perfectly fine. From my experience it takes nearly always several tries at something to make it work.
The next important skill is pivoting. Pivoting is the skill of changing direction quickly, which can be essential in a crisis. It was identified that the most important skill in successful start-up teams is the skill of pivoting. Imagine going down one way and you realise that it is just not working, there is nothing wrong with trying another path. Sometimes you will make a decision on Monday and on Tuesday you decide to change direction completely, because new information makes your Monday decision obsolete. Don’t be afraid of changing directions quickly. Being able to pivot will make up for any iterations and thus you gain time.
6. Tap into your subconscious
Your unconscious mind is incredibly powerful. Most of us are only able to use our conscious mind when we make decisions. When you analyse or reflect on things you are using your conscious mind in a very analytical way. This is important and good, but on its own it is not enough to make good decisions. Your subconscious stores enormous amounts of information. I personally advocate new findings that we can probably store more than we think we can. I remember learning in school that 90% of what we encounter in life is forgotten. This is not true. It is just not consciously usable, but it is stored in your subconscious. So how can you tap into your subconscious mind?
You learn to read the signs. You get feelings about things. When you feel sick at the idea of signing a contract, or when you just have this bad feeling about a consultant offering his services, etc. – this is your subconscious trying to tell you something. But how do you handle these feelings? Should you just call of seemingly fine deals because you feel iffy about them? Not necessarily, as the tricky part about your subconscious is, that you don’t know why you are feeling bad. The deal you want to sign might be perfect, but the CEO at the other side looks like the guy who bullied you in school. Or the consultant might do good work but used a perfume that reminds you of a bad experience. Or maybe the deal is actually bad and the consultant a crook. Now, the magic happens when you try to interlink your subconscious and conscious minds. As said earlier take your time to think, people will understand especially when there are big decisions to be made. Try to use your analytical mind to mull over the bad feeling, playing through all possible scenarios and check any missing links etc. Meditate on it, talk to others about your bad feeling and try to get the bottom of it. Usually if you do it, you should find the reasons for the bad feeling.
7. Try the eagle eyes view and worst-case scenario thinking
Eagle eyes view in combination with perspective is a powerful mode of thinking. Try to imagine looking at your situation from above from an objective standpoint. Once you have done that you can go into each parties’ subjective view on things and get an understanding of the situation. This way you will be better prepared and gain more understanding of the situation. This gives you a great basis for role playing and game theory (explained further down).
Thinking in worst cases is used by top athletes like Michael Phelps as they prepare for a contest. They go through all the things that can possibly go wrong. Before deciding, you can go through all things that might go wrong and think through how you could react to that. By doing this every time you have to make a decision, you will be far more confident in them as you have already thought of everything that could go wrong (that you can imagine). No worries, life will surprise you more often than you wish. I mull scenarios over again and again in my head, till I believe that I have gone through all the different scenarios.
8. Use role play and game theory
Role playing and game theory are two extremely useful tools for decision making. They give you the possibility to assess and test different decisions and paths before you make them. Yes, iteration is good, but making sure that you at least throw out bad decisions before making them is even better.
Game theory can come in different forms, you can use tables and you can use decision trees. Decision trees are basic and only work in scenarios where decisions happen sequential. Sequential scenarios are rather rare in real life, especially in a crisis, so probability tables are a better tool to be used in a crisis. Often the probabilities will have to be guessed. After all you will be lacking data and the right tools. But if you get together in your team and asking people with expertise in the concerned areas, you can get a rough idea.
Role playing is a way of iteration in a test scenario and it is often overlooked. It may seem silly to do it, but do not underestimate the power of role play. You can even do this by yourself. Just imagine scenarios and close your eyes and try to play it through slipping into different individuals. It requires a lot of imagination and creativity; thus, it is not ideal for everybody. You can also do it in your team - imagine scenarios and play through them and think of what each party would or could do and play it through. Only by really slipping into different roles and trying to think and see from their perspective, will you be able to make the right decision.
9. Structure your decision making
The biggest risk in making decisions is that we take them in an uneducated manner. A huge number of psychological traps can warp your opinions on things. We enter making a decision often with a predetermined outcome in mind and will manipulate the decision into this direction. Structuring the process of making a decision will lower such risks. Using criteria and score several possible decisions on each of the criteria and take the decision with the best score. This will make you go into detail. This is somewhat similar to evaluating a product design against the previously defined product specification. Often it is also good to speak to your mentor or friends, or other experts and ask them to rate the possible decisions. Read more about structured decisions here.
In a crisis your decisions are vital and often you are put before a make or break type decision. The above-mentioned tools should help you in making better structured decisions and to reduce the amounts of stress that you are facing. Also keep in mind, you are not on your own in a time of crisis, open yourself up to friends and family. If you feel you have no one to talk to about the crisis and need some advice, feel free to drop me an email.
Octavian Pilati is an Austrian entrepreneur with a 29-character long surname and a rich family history. As descendants from the princely family of Khevenhüller-Metsch his family dates back to before the year 1000. For Octavian’s family the most formative event happened in 1730, when Sigismund Reichsgraf von Khevenhüller bought several estates in Lower Austria. By doing so he build the foundation of the family business Octavian is engaged in today. The other Family roots (Pilati, Filo della Torre and del Pezzo) all have similar long histories as the Khevenhüller Family.
The family business brought forth Octavian’s first professional challenge. In the years 2015 to 2018 the company slid into a crisis stemming from a failed investment. Octavian managed said crisis and took over the family business at the age of 29. As a student of mechanical engineering at the TU Vienna Octavian has a deep understanding of technical product development, which helped him to approach the difficult situation in an unusual way.
Octavian is now sharing his experiences and knowledge about family business, family dynamics, crisis and fraud.
Read more from Octavian at www.octavianpilati.com