Closing time is generally the most annoying time for those living next to bars and clubs. Tipsy revellers pour out en masse, shouting and shrieking, into residential areas.

The City of Portsmouth in the south of England has an interesting solution. After numerous complaints about noise they suggested that one club give a free lollipop to each departing guest. Turns out that people can’t shout and suck at the same time. Noise is way down.

Designing the system to produce the behavior you desire is often the least painful solution.

Economist and author Thomas Piketty is the latest person to have been burned by spreadsheet modeling.

A Financial Times investigation into the data behind his wildly successful book “Capital in the Twenty-First Century” concluded that

In his spreadsheets, however, there are transcription errors from the original sources and incorrect formulas.

As long as analysts continue to use spreadsheets for business-critical modelling we’ll continue to see these embarrassing revelations.

Regular readers of this blog will know that application always excites me more than theory. I’m always interested in applications of tools or ideas. So, when I heard Sean Brady of Prism Decision Systems was working on a book I couldn’t wait to read it.

Sean is a practitioner. It’s in his blood. I’ve lost count of the times I’ve contacted him only to hear that he was in a room with a bunch of clients helping them make a difficult decision. A tool has to work hard to get into his toolbox, but, once it’s in there, it’ll find itself at the “coal face” on a regular basis.

While the title of his book is “You Are What You Decide”, it’s the subtitle (all modern business books must have a subtitle) that describes the main thrust—”Eight Keys to Better Decision-making”. In the book, Sean distills his twenty years of experience in helping people make decisions into eight areas you need to address to improve your decision-making. He also draws on research in behavioral decision-making, as recently popularized by books such as Kahneman’s “Thinking Fast and Slow”.

The eight keys to effective decision-making are:

1. Commit resources commensurate with the weight of the decision.
2. Know explicitly what you are trying to achieve.
3. Consider all possible options.
4. Conquer your fear to make a mistake, to fail or to take a risk.
5. Know and question all your key assumptions.
6. Be acutely aware of and root out cognitive biases and fallacies.
7. When making important choices, be deliberate: decide how you will decide.
8. Act decisively, monitor closely and learn continuously.

Each key is given its own chapter in the book and Sean draws liberally from his own experience (business and personal) to illustrate his points.

While books like the aforementioned “Thinking Fast and Slow” bring theoretical ideas to a mass audience, they are still relatively technical and abstract in nature. “You Are What You Decide” takes a big step towards real-world decision-making showing, in around 70 pages, how anyone can improve their decision-making capability by adopting a few simple behaviors.

Highly recommended.

Oh, and it’s published through Leanpub, so the bulk of the money goes directly to the author (also available on Amazon). What’s not to like?

Whenever there’s a geopolitcal crisis the e-mails start pouring in—“What does confrontation analysis recommend?”

Unfortunately these e-mails are never from Barack Obama or David Cameron. And, as Decision Mechanics is not a government-funded think tank, we tend not to be analyzing confrontations just for the hell of it.

However, a cursory analysis of the current situation in Crimea does raise some interesting points. The immediate confrontation doesn’t seem to be the US-EU versus Russia. Reports suggest that the US and EU have different positions. The US wants a return to the pre-defacto annexation situation while the EU merely wants to prevent an escalation of the current situation.

Becasue no one is suggesting a muilitary response, the West’s primary weapon appears to be sanctions. US trade with Russia is minuscule. The real threat comes from EU sanctions (although that’s a two-way street).

Before Russia can be confronted, the US and the EU need to complete their own confrontation. The West rarely seems to be coordinated in these situations which is probably its biggest failing. Russia, which seems to hold most of the cards at present, will continue to benefit from that lack of clarity.

There is an argument that the US should say it’ll walk away from this battle if the EU doesn’t step up. The US could assert a position of strength by reaffirming its commitment to Article 5 of the North Atlantic treaty (an attack on one is an attack on all). That reinforces existing borders and boosts NATO at the expense of the EU. Surely positive result, regardless of how the EU decides to proceed.

Of course, the real consequences of Russia’s military intervention will play out over the long-term. The Russian central bank has already had to support the rouble to the tune of $12 billion. Also, it’s possible that annexation of Crimea would push western Ukraine into the arms of NATO—maybe even inspiring a radical conversion that would allow the US to base anti-ballistic missiles in the territory.

At the end of the day, politicians have to be seen to be taking action—and meetings with Russia look more dynamic than debates between Washington and Berlin.

This week’s Economist (2 November 2013) has a review of military strategy historian Sir Lawrence Freedman’s new book, “Strategy: A History”. The Economist says that

“[strategy] is about employing whatever resources are available to achieve the best outcome in situations that are both dynamic and contested”

In the book, Freedman himself writes,

“It is about getting more out of a situation than the starting balance of power would suggest. It is the art of creating power.”

Both quotes highlight the central role of other stakeholders. This is often ignored in corporate “strategy”, resulting in strategies being no more than plans.

The review also quotes Mike Tyson who has a pithy update of von Moltke’s comment that no plan survives contact with the enemy. Tyson’s version is

“Everyone has a plan ’til they get punched in the mouth.”

The article ends by saying that Freedman concludes,

“it may be better to look at strategy as a form of script […] which attempts to anticipate the interactions of many players over a long time and which is open-ended.”

This fits well with one of my own interests—confrontation analysis. Confrontation analysis sees strategy as changing intentions to resolve sequences of (potentially endless) confrontations between stakeholders. Confrontations are “both dynamic and contested”, as they involve multiple stakeholders with potentially conflicting objectives who transform confrontations in pursuit of their own goals.

One of the major flaws in corporate “strategic planning” is the idea that it is a one-off activity. Annual strategy meetings and crisis meetings mistake plans developed in a the context of a single moment, often ignoring the likely reaction of other stakeholders, for strategy. Strategy needs to be an ongoing activity and, as such, tools designed to support it need to be lightweight and flexible, allowing existing work to be reviewed and updated on a regular basis.

Strategy tools that require senior staff to “down tools” for a few days are fundamentally incompatible with the maintenance of an organization’s strategy. Hence the tendency for managers to update strategy “on the fly”. Tools like confrontation analysis, on the other hand, are designed to support regular, rapid reviews and focus attention on the key strategic challenges.

Of course, all this means that I’ll now actually have to read the book.