Turning away from the negative - creating constraints
July 21, 2014
In my last post, I discussed the need to have constraints and the impact of these on making the right decision every time. Far from being a negative element, constraints help us cut through the clutter of having too many options, and allows us to focus on the top two to come to a decision. In this article I shall talk about the sources of constraints and how to use them.
Sources of constraints
Since a constraint is a condition that has to be met for a successful decision, then there is no limit to their source. So while budget, time, people are very common constraints, there are others that will affect the outcome of the decision, and if we didn't suss them out before the decision has been made, then we might make the wrong one. Some of the easily overlooked sources of constraints include
2. operational requirements
3. risk appetite
4. stakeholder intents
6. your concerns
For example, if your procurement process requires you to raise a PO for every purchase, regardless of the price, with its customary two signatories, then, this is a condition for success. Sometimes it won't affect the decision, but other times, it might. Not articulating it might pose a hindrance to the decision, and knock it off its course. Hence, constraints are not limiting; it's your failure to take them into account that is.
Another example is risk appetite. If the company has a stated policy of not betting more than $2000 for an untested business idea, then this has to feature into the decision process.
Some people reading this may scoff at this idea because it seems so obvious. Yet research has shown that even obvious things are not so obvious if we are not looking for it. If it is not articulated in some way during the decision process, it will bound to be forgotten, only for it to rear its sometimes-ugly head and cause a big mess to the decision.
And what about personal concerns? How do they become constraints? I wrote in an earlier article about how we can deal with the emotional elements of decisions. In it I shared how we can take concerns and identify the underlying reason for them, and then turning them into a constraint, so that we harness the raw power of emotions. I shall not duplicate the discussion here, only to say that all decisions, even if it is a professional one, have an element of personal concerns that might have to be addressed as the decision is made.
Now that we have identified constraints, what are they good for in a decision process? Here are two big ones:
1. The first is that it helps us whittle down the many options that we have to two managable ones. As mentioned in yesterday's article, we decide best when there are only two options so there is a need to trim the number of options from consideration at some time in the decision process. We use constraints for this. Drawing a table that has all the constraints at the top and the options on the left, we work down each column, assessing which of the options can meet the constraint, putting a tick in when it can and a cross when it cannot. Once we are done with all the options for the first constraint, we move to the next column and work on the next constraint. We continue likewise until we have filled the whole table with ticks and crosses. (It is important that you do it as described so that it overcomes solution bias). We can then take a step back, identify which option has the most number of ticks, and choose the two best ones for final evaluation. So constraints are really helpful in bringing the number of options to a managable two (or, on a worse case basis, three)
2. Constraints are also great sources of options. I provided some ideas in yesterday's post, but I just want to add one more here for emphasis. Let's go back to the $2,000 risk-mitigating constraint. Suppose you have a great opportunity and it would take $10,000 to do the initial test. This constraint will kill the opportunity even before it has a chance to show for itself. But instead of kiling the idea, because you framed the constraint as "Provided that we can work within the $2,000 initial test limit", you could perhaps look for solutions around that: you could get your customer involved and they can foot the initial bill; or maybe you could cut the test up in phases to meet the $2,000 constraint; or maybe you could get a supplier in on the deal and get them to foot the testing costs; or if you are so confident of the idea, you could even spring for the rest of the $8,000 for an equity stake in the final product? Each of these are options that you could take to add to your final decision that you might not have had without it.
As you can see, constraints are VERY IMPORTANT in decisions and if you don't know how to deal with them well, you will not get the right decision every time!
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