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Business Decision

Making

How to Think Better

Dr. Eduardo A. Morató, Jr.

Copyright 2012 Dr. Eduardo A. Morato, Jr.,

All rights reserved.

Published in eBook format by eBookIt.com

http://www.eBookIt.com

ISBN-13: 978-1-4566-0968-9

No part of this book may be reproduced in any form or by any electronic or mechanical means including information storage and retrieval systems, without permission in writing from the author. The only exception is by a reviewer, who may quote short excerpts in a review.

About the Book

Business Decision Making is not just about sharpening the manager’s tools and techniques in defining, evaluating and making decisions. It is also about stretching the mind to think better. That means being able to tap into the brain’s patterns of thought, sequencing of ideas and creation of insights. That means being able to see both the big picture by zooming out and the small picture by zooming in. That means being able to ferret out what is relevant, important, urgent, doable, and big enough to matter. That means being able to imagine many different ways of solving problems, finding opportunities and crafting strategies. That means being able to diverge into countless possibilities but converge into one powerful solution or direction. That means being able to program a series of action steps that would convert ideas into reality.

About the Author

With over forty years of managerial, consulting and academic experience, Dr. Eduardo A. Morató, Jr. synthesizes his many learnings into a practical guide book on how to think better and how to make better decisions. Dr. Morató has served multinational conglomerates, multilateral development agencies, national and local governments, public and private corporations, educational institutions and non-government voluntary organizations. His interests span many fields: from finance to organizational development; strategic planning to self mastery; entrepreneurship to business; intuiting to logical thinking; art to technology and science; development management to leadership and governance. He has written sixteen other books with topics as far ranging as his interests. More than anything else, however, Dr. Morató is an educator, a development practitioner and a mentor. He was dean of the Asian Institute of Management and chairperson of Assumption College. He was president or general manager of fifteen public and private corporations. He is currently the chairman of ACE Center for Entrepreneurship and Management Education, chairman of Bayan Academy and president of ABS-CBN Bayan Foundation. His latest passion is to set up a Whole Brain Academy for elementary and high school students, propelled with the vision of changing the education landscape dramatically.

Dedication

To my first boss

Manuel U. Agustines

and

to my scholarship benefactor

Claude M. Wilson, Jr.

INTRODUCTION

Higher order thinking is underrated in business decision making. There are several reasons for this.

First, business managers are persons of high authority whose decisions are mandatorily followed by their subordinates. Since business bosses know this, they become sloppy in their thinking processes. Their unfounded opinions easily become the prevailing laws of the corporation. There is little need for higher order thinking, except when the bosses present to their own superiors. Higher order thinking has, thus, become a rare commodity.

Second, business managers accumulate bundles of experiences over time. When a new situation is encountered, managers rely on their anecdotal stories to fabricate templates of thinking and doing. If the new situation looks like, sounds like and acts like a previous experience, then it is easier to conclude that they are the same experience. Therefore, there is no need to thoroughly think through the new situation. The old and familiar thinking pattern would suffice. Lower order thinking dominates as the preferred path of least resistance.

Third, it is laborious and tedious to gather evidence to prove that the premises in business arguments are true. This effort would require considerable data mining. Once the information are mined, they would still have to recategorized, reclassified, reanalyzed and resynthesized. The next step is to logically link the premises to the conclusions to make the business arguments sound and valid. This means that the premises must logically lead to the conclusions. The conclusions must not be overdrawn or overgeneralized, based on the evidence given to substantiate the premises.

Fourth, business managers prefer to discuss ideas freely, often mistaking meetings and dialogues as higher order thinking when, in fact, they are not. Just because two or more people have “given their two-cents worth” does not mean that great thinking has transpired. The ideas shared are simply individual opinions that have metamorphosed into collective opinions. Over a certain amount of time, the thoughts of business managers tend to congeal into “groupthink”. This means that the opinion of one becomes the opinion of the others, and vice versa. This augurs poorly for business organizations because they are lulled into “mindless action”. Groupthink degenerates into severely constipated thought patterns. Independent analytical and original thinking has become obsolete.

Fifth, the Information Age has created a world inundated with knowledge, which is fast becoming more common than clean air or pure water. Knowledge is such a common commodity that business managers can download almost anything and everything in a short span of time. In truth, many businesses are now complaining that their employees are spending too many hours surfing the net. Worse, they are just chatting, twitting and facebooking. They look busy but all they are doing is entertaining themselves with a cornucopia of juicy trivia. There is very little time spent on purposive thinking that sets objectives clearly, defines the relevant areas of consideration, determines the appropriate criteria, generates alternatives to meet the objectives, evaluates the alternatives, and prepares for contingencies and uncertainties. Critical and creative thinking have gone comatose.

Sixth, large business organizations have built functional silos of separate managerial kingdoms. Each silo is expected to do its own marketing, production, administrative or financial mandate well. The obvious weakness in these organizations is the lack of cross-functional management processes that plan, organize, evaluate, control and orchestrate across the business units. The cross- functional task is supposed to be the job of the chief operating and the chief executive officers but they are too busy tending to the individual silos. What goes out the window is the ability to think of the business as a total living organism, a systemic network of interlinked functions. In order to reach higher order systemic thinking, business managers must be able to view the entire business drama from a distance. The view from the balcony is very different from the perspective of the actor strutting on the stage. Unfortunately, business managers would rather be scripted actors spewing their well-rehearsed lines than critics watching from the balcony. Systemic thinking is dead.

Seventh, ubiquitous powerpoint presentations and hurried e-mail barrages dominate office life. Abbreviated SMS miniaturize communications into bonsai messages. Employees are no longer required to present comprehensive reports that are composed in an integrative and well-structured manner. Maybe the bosses have no time to read. What happens next is quite predictable. The thinking itself becomes staccato bursts of ideas or flowing streams of consciousness. Thought elegance, thoroughness and integrity have followed the dinosaur to extinction.

To be honest, these lamentations on the demise of higher order thinking are purely based on my own personal experiences over forty years of management and consultancy practice. The only exception I can recall is my two-year stint as a loan officer at the World Bank where a premium was placed on higher order thinking.

At the World Bank, the reports of project officers on their market assessment, financial analysis and technical evaluation, economic forecasts and legal due diligence were consolidated by the loan officer in a draft report with a white cover. After these officers have agreed on the draft, they were forwarded to the division chief who worked on drafts with yellow cover. Once they agreed, the next hurdle was the area and functional directors who deliberated on the drafts with a green cover. Once they agreed, the loan proposal was presented to the board of trustees with a blue cover. Finally, after the board has approved the loan, an anaesthetized version with a green cover was disseminated to all World Bank offices around the globe. This rather torturous process ensured that higher order thinking left no stone unturned while deliberating on loan proposals. Frankly, the World Bank had too much thinking going on. However, the point being made is still valid. Very few organizations actually demand such rigor in thinking.

This book hopes to help business executives and managers make better decisions. It is designed to improve the many ways of higher order thinking. Each step in the decision making process is partnered with a thinking method. It is anchored on the belief that if a business manager acquired the lifelong skill of “learning to think better”, then he or she could tackle a difficult subject matter with greater ease and success.

Business Decision Making is a journey of the thinking mind through the labyrinth of the whole brain. Deliberately, the book is meant to stretch the business manager’s thought processes. Uncompromisingly, it tries to elevate business decision making to a new art form, replete with solid scientific methodologies.