by Peter A. Arthur-Smith, Leadership Solutions, Inc.®

“Wall Street’s annual consensus forecasts aren’t accurate. In fact they are atrocious.” Jeff Sommer’s Strategies article: ‘Forecasts That Are Bullish, and Often Wrong,’ New York Times, December 2016. 

 

    

    If Wall Street cannot get it right, with all its high-powered methods, statistics and financial prowess, what chances have we lesser mortals of getting it right, too? By nature humans try hard to be optimistic about life, other than those who suffer with depression. Companies, institutions and non-profits encourage their people to be bullish about the future. At the same time, somebody this writer knows well, found that person recently struggling with trying to come up with a favorable forecast for their future national sales meeting. Their market was in the tank and the prospects were not good. What should this person do?

 

The first thing we should do is be quite up front about not being able to predict the future. A few of us are mystics and clairvoyant and so have a greater chance of making a good guestimate about future events with which we are highly familiar. We’re sure that goes for you, too, on occasions. This then begs the question, “Why is that?”

 

Maybe it has something to do with decision clarity. When you have significant familiarity with something, you have a much better chance of making the right call. But here’s the rub: having all that extra insight is helpful, but maybe there’s something else at work, too. You can sit and quantify it with all the latest Wall Street equations and numerical systems you can muster. But, unless your gut feels in sync with your conclusions, you still don’t feel terribly secure about your decision. So, again, maybe there’s some other ingredient at work, too, to bring that extra sense of confidence?

 

Maybe you guessed right on this? Maybe you figured out that, unless you feel emotionally comfortable with your conclusions,  you’re unlikely to proceed? If that be the case, you’re probably on the right track. We use our brains to collect all the data. However,  we use our experience laden, emotional instincts to draw optimal – and hopefully right – conclusions. This is our intuition at work and our intuition is –according to current thinking – at least 275,000 times more powerful that our brainy, rational thinking capability. Remember, Wall Street goes over the top on its rational thinking but is usually abysmally wrong…see our opening quote.

 

To lure investors, Wall Street goes overboard to impress us with rational thinking: which sounds great, except that our rational mind is incapable of taking good quality decisions. Wall Street also lures us with unbridled optimism and an unfettered lust for good deals. Good deals invariably outwit our more sacred intuition, too. We need tremendous self-discipline or a shortage of funds to avoid so called “good deals.” However, setting aside our penchant for these questionable deals: how can we tap into our phenomenal intuitive capacity to bring us greater decision clarity?

 

Enlightened leadership argues for the use of option solving, which is a decision technique that encourages us to use both our rational and intuitive decision making capacities, almost simultaneously, as much as is possible. For hundreds of years philosophers and academics have encouraged us to rely strongly on rational solutions for decision making – analysis, quantitative theories, rational analysis, equations, statistics, etc.  Not that these don’t have merit because they do. Our rational capabilities help ensure we amass the right sources of information and data on which to base our decisions. But, in of themselves, they do not have the emotional power to help us make the right call. The debatable question therefore is, “Do we normally collect the right information before taking a decision?”

 

Proven equations or statistics help insure we collect the right information, based upon a well documented formula, which then produce an answer that can be consistently ratified. Because certain equations or statistics consistently draw the right outcomes, we feel emotionally secure about them and therefore rationality is given the kudos. However, the outcome actually confirms our intuition more than our rationality. Where it doesn’t, we become suspicious and start searching for alternatives or options. So where we don’t have solidly predictable outcomes, due this rule or that law, it behooves us to find a better way of “trying” to predict future outcomes.

 

One more recent discovery is the use of option solving. Its basis is to amass the best known, right information and then leverage our intuitive experience and judgment to make the right call: our intuition has the enormous power to do that. To get to that decision point, we should quickly look at the seven moves within option solving:

» Move One – Create a “What” question about the issue that you wish to resolve. “What will be the optimum price point for going  to market on this particular product?” The use of What helps tap into our intuition. But our question cannot stand on its own because it lacks valuable information for our intuitive decision powers to make a judgment call. If it were an equation, it would require certain additional pieces of information to generate a clear outcome. Option solving requires certain appropriate considerations to create the right “picture.” NOTE: We need a picture to engage our intuition. An algebraic or numerical formula is a form of picture.

     So now you expand your question to include some considerations, such as: “What will be the optimum price point for going to market on this particular product; considering 1) our market is very competitive, 2) we will be using price-sensitive distributors, 3) we are offering a commodity product, and 4) our packaging is particularly attractive? (Note: These latter four considerations are like key components used in an equation. Without the right considerations or formula-components you cannot produce the right answers or outcome.)

» Move Two – You now come up with two unlikely bookends to frame your options. These are two fringe options, the yin and yang opposites, which will spur your intuition into coming-up with at least five alternative possibilities. You need at least five to encourage a good level of creative thinking; although you are permitted to generate even more alternatives if they reasonably exist.

» Move Three – Now you insert at least five reasonable options between the bookends. “Drawing” these, as well as your bookends, will help fully engage your intuition since it gorges on pictures…or pictograms as we call them.

» Move Four – Here is where you engage in emotional distancing by turning your pictogram over and distancing yourself from it while you deal with other issues. In the meantime, your intuitive mind will be scanning your life-long experiences for similar situations and outcomes. By the time you return to your pictogram, be that an hour or the following morning, your intuition will be ready to assist you with an optimal choice.

» Move Five – Your optimal decision point. A quick review of your pictogram: with its question, bookends and five or more reasonable options; will enable your intuition to pick-out your optimum choice. You will stick to this intuitive choice, rather than second-guess yourself, no matter what.

» Move Six – Either prepare an action initiative based upon that choice, while things are still fresh in your mind, or proceed to what’s called Peeling the Onion. The latter is a technique whereby you take your initial choice and further clarify your strategy by undertaking another sub-option solving approach based upon that initial choice. This can provide even more clarity to your decision. Of course, you can continue applying sub-sub-option solving approaches to dig for still further decision clarity.

» Move Seven – This is about implementation of your action initiative(s), where you remain faithful to your original question and chosen option. Sometimes people want to second-guess their intuition because the outcome may seem a little difficult or inconvenient at the time. Don’t do this. By faithfully executing your intuitively chosen option, you will ultimately see it was your wisest choice.

 

Again, the option solving approach is about incorporating both your rational and intuitive mind where they offer the best of both worlds, and produce decision clarity. In the case of Wall Street, notwithstanding it’s bias toward luring people into investing their money, for better or worse; it would do far better by its investors if it were to use the option solving approach: that is, propose objective, rational questions to its investors; create appropriate bookends for particular investor decisions; work with a field of investors to invoke a range of  five or more investor options; and then call on its enormous base of investors for its collective wisdom. Collective wisdom of that scale, combined with the right question and help of a solid slate of options, would be almost unbeatable: as compared with its current state of play.

 

If you draw on the right group of people within your organization to look at its options utilizing collective wisdom, you will make far better decisions overall and, more often than not, avoid the over-optimistic and off-base outcomes we see so often today. You can also learn more about option solving at www.optionsolving.com .

 

To learn more about Option Solving and decision-making, talk with: