Re: Can we measure it? (2)

["David C. Snook-Luther" <strategyworkshop@earthlink.net>]

At 8:43 PM on 10/9, David Kerridge wrote

>If we do not understand the weaknesses of our data and
>our theories, we are stumbling along in the dark. If we know
>the weaknesses, we may find ways to improve both.

In my last post I discussed the issue of reliability in measurement. In
this post I am going to discuss the importance of knowing what we know. 

In my first post I said "The point is that if we can't be reasonably sure
that the numbers are "right" the answers can have little meaning for us.  A
similar argument holds true for the validity of a measure--i.e., assuming
the measure is reliable, that the numbers are accurate, do the numbers
measure what we say they measure?  For example, does this reliable
measurement instrument (say a questionnaire) measure one's tolerance for
ambiguity, or does it measure one's risk preference.  Theoretically these
are different but related traits that affect decision making.
Theoretically, if one has a low tolerance for ambiguity they want more
information which will reduce the ambiguity or uncertainty.  They may be
willing to take long odds, but they want to be exceedingly sure of those
odds, and the potential gains and losses.  Having all of this information
will not go far in encouraging someone with a low preference for risk to
comfortably accept a risky choice.  If the instrument cannot distinguish
between these two individual traits we are simply making a wild guess (not
even an educated guess) about how to help someone make better decisions.  

The truly insidious part of this for managers is that when we use an
invalid instrument we fool ourselves into thinking we know what we are
doing.  For example, removing fear may help both of these people in their
decision making processes, but as I suggest, if we try to remove fear by
giving the person with a low tolerance for risk more information we are not
likely to see much change.  On the other hand feeding someone with a low
tolerance for ambiguity more information will not speed up their decision
process.  Telling them to "just do it" and we'll make sure you don't get
hurt" will encourage them to make riskier, but not necessarily better
informed decisions.  If the person is conscientious and responsible, and
does not want to cause undue damage to the organization or themselves they
may go ahead and make the decision, not only increasing the cost of risk to
the organization but also increasing the stress the person feels.  Over
time the person may begin to understand what are appropriate amounts of
ambiguity and risk for themselves, the situation, and the organization, but
we are doing little to facilitate such learning and are creating more risk
and stress than may be necessary.  

Telling someone there is a safety net does not help them deal with the
cause of their fear, their need for a safety net.  Helping them to
understand how to identify and deal with the most likely special causes,
and whether the variance in a stable system is acceptable (system
capability) will go much further in reducing risk for the organization and
stress in the conscientious individual.
 
That is, helping them understand and appropriately apply the P-D-C-A cycle
will help them acquire the knowledge they need in each situation they
encounter.  Soon they will realize that they have not been fed "instant
pudding" nor given "today's solution"--both of which probably they have
experienced as key components of the "do-it-yourself hangman's kit" and to
be avoided if at all possible.  

What do we fear in our organizations?  We fear lack of control over our
outcomes. As opposed to mystical incantations and rites, what does P-D-C-A
give us?  It gives us a way to manage that fear--to give it a name.  It
gives us the discipline to find a way to understand the cause(s) of our
outcomes and the discipline to determine if and how we can gain more
control. It attacks the CAUSE of our fear, not the fear itself. 

  
David C. Snook-Luther, Ph.D., Principal
The Strategy Workshop
Saratoga, CA
strategyworkshop@earthlink.net
Voice/Fax: (408) 871-0232
=====================================================================