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Not A Good Decision Maker? You Will Know How To Be One After Reading This.

Not A Good Decision Maker? You Will Know How To Be One After Reading This.

We’ve been told that making good decisions is all about standing our ground. It’s about being strong and deliberate. It’s about being sure of ourselves. What if we’re wrong? What if a good decision requires just the opposite? What if we need to become more open-minded?

In 1995, Psychologist Jonathan Baron coined the term “actively open-minded thinking.” According to Baron, the primary purpose of deliberate thought is to form beliefs and make decisions based on those beliefs. Actively open-minded thinking is the process of consciously considering a wide array of options when forming those beliefs and making those decisions.

It sounds nice in theory, but does actively open-minded thinking actually help you make better decisions? Wouldn’t it, instead, make you more uncertain? Won’t considering too many options cause to flounder in doubt and become indecisive? Well, to answer these questions, I’ll first consider the opposite of actively open-minded thinking. Let’s call it “actively close-minded thinking.”

The Perils of a Closed Mind

In a recent experiment, researchers from the Yale Cultural Cognition Project sought to understand how political ideologies influence our ability to make accurate judgments. To do so, they split a thousand participants into four equally sized groups, each containing more or less the same amount of liberal democrats and conservative republicans. Each group was asked to look at a chart and perform a basic mathematical calculation in order to draw a conclusion about the data.

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The first two groups were attempting to understand whether a new skin cream had caused subjects in trials to get worse or to get better. To do so, they had to calculate the ratio of the subjects who had taken the cream and gotten better to those who hadn’t taken the cream and still got better (control group), to the ratio of those who had taken the cream and got worse to those who hadn’t taken the cream and still got worse (control group).

For one of these groups, the data was presented favorably for the cream. For the other, the data was presented unfavorably for the cream. Though neither group demonstrated excellent quantitative abilities, liberal Democrats and conservative Republicans scored equally well in each of these groups. But what if the topic was a little more politically charged? What if the issue wasn’t about skin cream? What if, instead, it was about Gun control?

For the second two groups, the researchers kept the data exactly the same, but they changed “the introduction of a skin cream” to “the introduction of a gun ban.” Then, they asked the subjects to calculate whether the gun ban led to an increase or a decrease in crime. How do you think these results came out?

Both not surprisingly and downright shockingly, the politically—charged context dramatically changed how participants answered the question—even though it was the same basic math problem. In the group with results favorable to the gun ban, conservative republicans were far more likely to get the question wrong. In the group with results unfavorable to the gun ban, liberal democrats were far more likely to get the question wrong.

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Why, in the second experiment were people more likely to make poor judgments? Because they already had their minds made up on the issue. They didn’t need to think it through, because they already knew the right answer. Or, so they thought.

It turns out that being certain doesn’t help you make better decisions; it just helps you make faster decisions.

The Profits of an Open Mind

Now, back to “actively open-minded thinking.” In a separate experiment, published in the journal Judgment and Decision Making, a team of researchers sought to put actively open-minded thinking to the test. The researchers first administered a standard test, measuring how prone the participants were to thinking open-mindedly. Then, they tested how well the participants could predict the outcome of a football game from a previous season (not known by the participants) in the National Football League.

On a screen, each participant was shown a home team and an away team. At the bottom of the screen, they were given two options. They could 1) ask for information or 2) make an estimate. If they requested information, they were given clues such as the teams’ win-loss records. The participants were permitted to request up to 10 pieces of information before making an estimate.

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After all the participants had made predictions on ten different games, the results were tabulated. As you might expect, the people who opted to gather more information were much more likely to make accurate predictions than those who guessed right away.

And what about that “open-mindedness” test? Yes, it turns out that those who sought out more information were also those who scored highly on the test. The takeaway: being open-minded causes you to seek out more information. And, seeking out more information causes you to make better decisions.

A Posture of Curiosity

There’s another less academic word for “actively open-minded thinking” that we use much more often in our everyday conversations. That word is “curiosity.” Everyday, we’ll encounter major decisions that will impact us for the rest of our lives. We’ll have to decide whether or not to marry our significant other. We’ll have to decide whether or not to accept a job offer. We’ll have to decide whether or not to go to graduate school. Approaching such situations with a posture of curiosity will almost always help us make better decisions.

When making these major life decisions, the closed mind will focus only on one variable. Does my mother/father approve? Is it a high enough salary? Will the degree get me a better job? The curious mind seeks out more information. What do her/his parents think? Twenty years from now, will it matter what my parents think? Is salary the only thing I should be concerned with? Will I get along with the people that currently work there? Do I just want to go to school to get a better job? Aren’t I also interested in learning more about my field and becoming a more well-rounded person?

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When you’re curious, you ask these questions. When you ask questions, you get answers. And when you get answers, you make better decisions.

The idea that the person who makes quick, forceful decisions without any doubt is somehow making better decisions—that’s a myth. As psychologists Christopher Chabris and Daniel Simons point out in The Invisible Gorilla, those who are most confident in their decision-making abilities are often those who are least competent in their decision-making abilities.

If you want to make better decisions, doubt your intuitions. Test your assumptions. Seek a wider range of possibilities.

Become curious.

Featured photo credit: Pretty young woman making a decision with arrows and question mark above her head via shutterstock.com

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Last Updated on January 6, 2021

14 Ideas on How to Measure Productivity to Make Progress

14 Ideas on How to Measure Productivity to Make Progress

Everyone has heard the term productivity, and people talk about it in terms of how high it is and how to improve it. But fewer know how to measure productivity, or even what exactly we are talking about when using the term “productivity.”

In its simplest form, the productivity formula looks like this: Output ÷ Input = Productivity.

For example, you have two salespeople each making 10 calls to customers per week. The first one averages 2 sales per week and the second one averages 3 sales per week. By plugging in the numbers we get the following productivity levels for each sales person.

For salesperson one, the output is 2 sales and the input is 10 sales: 2 ÷ 10 = .2 or 20% productivity. For salesperson two, the output is 3 sales and the input is 10 sales: 3 ÷ 10 = .3 or 30% productivity.

Knowing how to measure and interpret productivity is an invaluable asset for any manager or business owner in today’s world. As an example, in the above scenario, salesperson #1 is clearly not doing as well as salesperson #2.

Knowing this information we can now better determine what course of action to take with salesperson #1.

Some possible outcomes might be to require more in-house training for that salesperson, or to have them accompany the more productive salesperson to learn a better technique. It might be that salesperson #1 just isn’t suited for sales and would do a better job in a different position.

How to Measure Productivity With Management Techniques

Knowing how to measure productivity allows you to fine tune your business by minimizing costs and maximizing profits:

1. Identify Long and Short-Term Goals

Having a good understanding of what you (or your company’s) goals are is key to measuring productivity.

For example, if your company’s goal is to maximize market share, you’ll want to measure your team’s productivity by their ability to acquire new customers, not necessarily on actual sales made.

2. Break Down Goals Into Smaller Weekly Objectives

Your long-term goal might be to get 1,000 new customers in a year. That’s going to be 20 new customers per week. If you have 5 people on your team, then each one needs to bring in 4 new customers per week.

Now that you’ve broken it down, you can track each person’s productivity week-by-week just by plugging in the numbers:

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Productivity = number of new customers ÷ number of sales calls made

3. Create a System

Have you ever noticed that whenever you walk into a McDonald’s, the French fry machine is always to your left? 

This is because McDonald’s created a system. They have determined that the most efficient way to set up a kitchen is to always have the French fry machine on the left when you walk in.

You can do the same thing and just adapt it to your business.

Let’s say that you know that your most productive salespeople are making the most sales between the hours of 3 and 7 pm. If the other salespeople are working from 9 am to 4 pm, you can potentially increase productivity through something as simple as adjusting the workday.

Knowing how to measure productivity allows you to set up, monitor, and fine tune systems to maximize output.

4. Evaluate, Evaluate, Evaluate!

We’ve already touched on using these productivity numbers to evaluate and monitor your employees, but don’t forget to evaluate yourself using these same measurements.

If you have set up a system to track and measure employees’ performance, but you’re still not meeting goals, it may be time to look at your management style. After all, your management is a big part of the input side of our equation.

Are you more of a carrot or a stick type of manager? Maybe you can try being more of the opposite type to see if that changes productivity. Are you managing your employees as a group? Perhaps taking a more one-on-one approach would be a better way to utilize each individual’s strengths and weaknesses.

Just remember that you and your management style contribute directly to your employees’ productivity.

5. Use a Ratings Scale

Having clear and concise objectives for individual employees is a crucial part of any attempt to increase workplace productivity. Once you have set the goals or objectives, it’s important that your employees are given regular feedback regarding their progress.

Using a ratings scale is a good way to provide a standardized visual representation of progress. Using a scale of 1-5 or 1-10 is a good way to give clear and concise feedback on an individual basis.

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It’s also a good way to track long-term progress and growth in areas that need improvement.

6. Hire “Mystery Shoppers”

This is especially helpful in retail operations where customer service is critical. A mystery shopper can give feedback based on what a typical customer is likely to experience.

You can hire your own shopper, or there are firms that will provide them for you. No matter which route you choose, it’s important that the mystery shoppers have a standardized checklist for their evaluation.

You can request evaluations for your employees friendliness, how long it took to greet the shopper, employees’ knowledge of the products or services, and just about anything else that’s important to a retail operation.

7. Offer Feedback Forms

Using a feedback form is a great way to get direct input from existing customers. There are just a couple of things to keep in mind when using feedback forms.

First, keep the form short, 2-3 questions max with a space for any additional comments. Asking people to fill out a long form with lots of questions will significantly reduce the amount of information you receive.

Secondly, be aware that customers are much more likely to submit feedback forms when they are unhappy or have a complaint than when they are satisfied.

You can offset this tendency by asking everyone to take the survey at the end of their interaction. This will increase compliance and give you a broader range of customer experiences, which will help as you’re learning how to measure productivity.

8. Track Cost Effectiveness

This is a great metric to have, especially if your employees have some discretion over their budgets. You can track how much each person spends and how they spend it against their productivity.

Again, this one is easy to plug into the equation: Productivity = amount of money brought in ÷ amount of money spent.

Having this information is very useful in forecasting expenses and estimating budgets.

9. Use Self-Evaluations

Asking your staff to do self evaluations can be a win-win for everyone. Studies have shown that when employees feel that they are involved and their input is taken seriously, morale improves. And as we all know, high employee morale translates into higher productivity.

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Using self-evaluations is also a good way to make sure that the employees and employers goals are in alignment.

10. Monitor Time Management

This is the number one killer of productivity in the workplace. Time spent browsing the internet, playing games, checking email, and making personal calls all contribute to lower productivity[1].

Time Management Tips to Improve Productivity

    The trick is to limit these activities without becoming overbearing and affecting morale. Studies have shown that most people will adhere to rules that they feel are fair and applied to everyone equally.

    While ideally, we may think that none of these activities should be done on company time, employees will almost certainly have a different opinion. From a productivity standpoint, it is best to have policies and rules that are seen as fair to both sides as you’re learning how to measure productivity.

    11. Analyze New Customer Acquisition

    We’ve all heard the phrase that “It’s more expensive to get a new customer than it is to keep an existing one.” And while that is very true, in order for your business to keep growing, you will need to continually add new customers.

    Knowing how to measure productivity via new customer acquisition will make sure that your marketing dollars are being spent in the most efficient way possible. This is another metric that’s easy to plug into the formula: Productivity = number of new customers ÷ amount of money spent to acquire those customers.

    For example, if you run any kind of advertising campaign, you can compare results and base your future spending accordingly.

    Let’s say that your total advertising budget is $3,000. You put $2,000 into television ads, $700 into radio ads, and $300 into print ads. When you track the results, you find that your television ad produced 50 new customers, your radio ad produced 15 new customers, and your print ad produced 9 new customers.

    Let’s plug those numbers into our equation. Television produced 50 new customers at a cost of $2,000 (50 ÷ 2000 = .025, or a productivity rate of 2.5%). The radio ads produced 15 new customers and cost $700 (15 ÷ 700 = .022, or a 2.2% productivity rate). Print ads brought in 9 new customers and cost $300 (9 ÷ 300 = .03, or a 3% return on productivity).

    From this analysis, it is clear that you would be getting the biggest bang for your advertising dollar using print ads.

    12. Utilize Peer Feedback

    This is especially useful when people who work in teams or groups. While self-assessments can be very useful, the average person is notoriously bad at assessing their own abilities.

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    Just ask a room full of people how many consider themselves to be an above average driver and you’ll see 70% of the hands go up[2]! Now we clearly know that in reality about 25% of drivers are below average, 25% are above average, and 50% are average.

    Are all these people lying? No, they just don’t have an accurate assessment of their own abilities.

    It’s the same in the workplace. Using peer feedback will often provide a more accurate assessment of a person’s ability than a self-assessment would.

    13. Encourage Innovation and Don’t Penalize Failure

    When it comes to productivity, encouraging employee input and adopting their ideas can be a great way to boost productivity. Just make sure that any changes you adopt translate into higher productivity.

    Let’s say that someone comes to you requesting an entertainment budget so that they can take potential customers golfing or out to dinner. By utilizing simple productivity metrics, you can easily produce a cost benefit analysis and either expand the program to the rest of the sales team, or terminate it completely.

    Either way, you have gained valuable knowledge and boosted morale by including employees in the decision-making process.

    14. Use an External Evaluator

    Using an external evaluator is the pinnacle of objective evaluations. Firms that provide professional evaluations use highly trained personnel that even specialize in specific industries.

    They will design a complete analysis of your business’ productivity level. In their final report, they will offer suggestions and recommendations on how to improve productivity.

    While the benefits of a professional evaluation are many, their costs make them prohibitive for most businesses.

    Final Thoughts

    These are just a few of the things you can do when learning how to measure productivity. Some may work for your particular situation, and some may not.

    The most important thing to remember when deciding how to track productivity is to choose a method consistent with your goals. Once you’ve decided on that, it’s just a matter of continuously monitoring your progress, making minor adjustments, and analyzing the results of those adjustments.

    The business world is changing fast, and having the right tools to track and monitor your productivity can give you the edge over your competition.

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    Featured photo credit: William Iven via unsplash.com

    Reference

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