Thursday, October 3, 2013

Handling the irrevocable decision

This particular week, with no Washington Redskins game and no government (and yet the world continues to turn ...), we who reside in the Chesapeake area have the free time to ponder the mysteries of decision-making and governance.  That is what you were going to do, right?  Well, if you spent any time thinking "what in the heck were those guys thinking?", that's all about governance.

Executive-level choices are not easy, or they would be made by junior clerks.  Worse, they will not come to fruition for some time, leaving lots of opportunities for second-guessing.  Government and industry alike use processes built around the idea of gradual approaches to the objective, permitting periodic re-assessment. Nonetheless, it is a brave analyst who will insist on derailing a program at a milestone review, a dynamic that significantly weakens the value of those reviews; and, as in the current examples, it is not uncommon that decisions are made that essentially preclude re-thinking.

For those from other regions, the Redskins'  superstar rookie quarterback Robert Griffin (RG-III) was massively injured in his first season.  This spring, long before anyone could know whether a full recovery was possible, the organization announced that RG-III would be the starter in the fall no matter what. That choice also meant that the team would have to go through the pre-season (quite successfully) with a different leader; then adjust to the return of an unpracticed RG-III.  That adjustment has (so far) cost 3 of their first 4 regular games against very weak opponents.  Now for the part we don't know: did the early decision permit an orderly march to a future that is not yet apparent but just needs a couple more weeks to prove itself?  Or, with the season at risk before it is a quarter over, is it time to rethink the approach, and if so - how? If they change now, will the team end up going back to square one while re-synching?  Some time between late November and February, we will find out how the actual strategy worked out; but if it fails, we will never really know whether alternative choices would have worked any better.

*** Update: It didn't work out.  Throughout the 2013 season, RG-III was a shadow of his pre-injury self even though the rest of the team was uncharacteristically healthy.  Later in the season he was benched to see if the backup could get the team but with morale in the toilet it didn't make much difference either way.  As the last game ended, the coaching staff was fired.  The team owner resisted a strong push to bring in RG-III's former college coach. ***

Separating ourselves from the political content, the government shutdown offers similar decision-making puzzles.  With both parties having equally but oppositely apocalyptic views of what might happen if the other party gets its way, both of the party leaders adopted a public policy of "no compromise".  That admits of only one outcome: eventually someone must back down and thereby "lose".  That loser will surely be finished as party leader, and may well have led their entire party to effective annihilation; ironically, "winning" will gain almost no change in the status quo at all and does not relieve the winners' practical problems.  As with the Redskins, leaders elected to lock in, well in advance of any practical deadline, to a decision that effectively nullifies other options, and after a certain point any change of plan becomes pretty much impractical.

*** Update: the government shutdown lasted 27 days in in 2013 (the government's fiscal 2014). House leader John Boehner backed down completely, having gained absolutely nothing from the battle and losing some of what was already agreed to.  He survived that fight but now faces for the first time in many years a combative challenge for his House seat, which he is having to spend millions to defend.  Just as with the 1994 shutdown, the country got along just fine with only the essential personnel and saved a lot of money which is now being credited as "deficit reduction".  It saved a lot more when the looming specter of global warming resulted in an unusual number of snow-related shut-downs through the winter of 2013-2014.  You can't make this stuff up. ***

When you step back from the content issues, these two situations bring up similar questions with regard to governance:

  • How far in advance do we really have to lock into a decision?  At what point does lack of a committed decision create more confusion than having to change a decision?  How much detailed effort should we put into a concept that hasn't really been endorsed?
  • How deep into the future should we look when analyzing a particular short-term decision?
  • How do we identify that a decision needs rethinking without being condemned as a trouble-maker? 
  • How should we approach apparently irreversible decisions, as opposed to the usual ones that can be approached incrementally?
  • How can we be confident that the current fiasco really is less of a problem than what would happen if we moved to a different solution?
  • Intervening too early at the first sign of difficulty will eventually lead to stifling all innovations.  How do we tell whether early setbacks indicate growing pains of a bright new future, or the slide into worse results to come?  
  • If we are planning to shift gears, how do we assess the disruption effect?  Our economic analysis methods address Plan A and Plan B, and the partial costs involved in a shift.  We do not really  have a strong methodology for assessing the practical implications of making the change either within those programs or on other related activities, but for the most part decision-makers are making implicit subjective assessments of that disruption when they cling to something that is obviously not going too well rather than consider alternative approaches.





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