Westmont Magazine Decision Analysis and the Common Good
What I Learned from Pokémon and Other Games
During the quarantine, my family has played a lot of board games. Each person has their favorites and particular style of play. My wife, the silent assassin, is unassuming, friendly and helpful. She will smile innocently while she destroys you. My eldest, a master strategist, studies the board, the rule book and every card and piece to exploit all his options. My youngest, like an overzealous rhino, slowly builds his strength and unleashes it to blow up our expectations and plans. I like Yahtzee and other games of dice, deception and daring.
When we learn a new game, we read the instructions and play a few rounds a bit awkwardly. My youngest, the rhino, usually wins a lot with brute force and reckless abandon. Within a few days, my eldest has fully dissected and studied the game, and he sees new ways to play. He starts winning. My wife and I then start learning from and copying them. My wife refines her strategies and uses her trademark deception to win. I like watching how information leaks out of others’ behavior, and I modify my strategy to foil them. If I read them well, I can win big. But much of the time I lose because I can’t read them that well. We all learn from our post-game analyses, and we become more nuanced and competitive players.
Did we get smarter? No, we just understand the game—its true objectives and sub-objectives—better. We see the power of our alternatives and how they help us achieve our goals. We understand the value of the information we’re hiding and learning from others. We see things with greater clarity.
This clarity of thought and action helps us in lots of everyday situations. Students who excel at school don’t focus on getting A’s, but understand the value of performing consistently. They recognize and exploit their resources: class time, homework, instructors, readings and preparation. They control their calendars and their time to mitigate risk. People who manage money well do the same thing. They pursue objectives like setting savings and investment goals. They identify different ways to make money work for them and create budgets to build positions of safety and strength. They plan for rainy days and diversify to manage their risks. When you see the contours and feel the textures of the context of your decision, you make better decisions, which can literally make your life better.
This is what we want for our students: We want them to think and decide well. But this is much easier said than done. The force of culture often pushes against good decision-making. At work, you know you’re supposed to make value-oriented decisions, but the culture of our workplaces quickly muddies our values. Our mission gets tangled up with our credibility, success and comfort. We know we’re supposed to seek creative alternatives to tough problems, but as we grow more experienced, we rely more and more on the tools, processes and ideas that worked in the past and that make us look competent and reliable. And as we climb the corporate ladder and take on more responsibility, we forget that our corner of the organization is only one part of a diverse portfolio of decisions that collectively mitigates risk and leads to corporate success and human flourishing.
Think about decision-making in governments, at your church and in your family. The force of culture makes practicing good decision-making difficult. At this moment in time, clarity of thought—and clarity of action—has never been more important. How do we strengthen our decision-making muscles?
The field of decision analysis (DA), a branch of applied mathematics, can help. In fact, DA can change the course of your life. It begins with this attitude: The better you play, the better your outcomes, so focus on playing well. Recognize that you can play really, really well and still lose—and you can play mindlessly and sometimes win. Judge your play by the clarity of your thoughts. Focus on making good decisions, and good outcomes will follow.
The starting point of any decision is recognizing that you’re making one. I suggest you declare your decisions: “I’m making a decision now.” It’s easy to walk through life taking and rejecting opportunities without making any decisions. I rolled out of college and took the first opportunity available. I didn’t understand what I was doing. I didn’t decide; I just acted mindlessly. Don’t do this. No one will tell you it’s your turn to make a decision, but it is. And, at the moment you declare your decision, suspend your judgment to do some hard thinking.
Decision analysis asks us to lead with values. This means front- loading your decisions with honest, careful reflection about what you want. Reflect on your priorities, intentions and goals. Research shows that we’re only conscious of a few of our values at any given time. What’s really important lies somewhere in our subconscious. For each value, ask: “Why is this important?” Identify what needs to happen to achieve these things. To win at Pokémon, for example, you need a big powerful Pokémon, the energy to power them and access to what you need when you need it. That’s just three values. There are many more.
Leading with values also means recognizing trade-offs. The “A” student is trading off between socializing and studying, devoting time to studying finance or studying English. The personal finance investor is trading off a fancy dinner tonight with a holiday tomorrow or perhaps a more comfortable retirement down the road.
DA thinking asks us to create distinct and viable alternatives. You can’t choose an alternative you’re unaware of. Research shows that when you understand your values, you create better and more alternatives. Ask, “What’s within my control? What can I do to advance my values, respond to threats and create options for myself in the future?” Top students recognize alternatives when they approach an assignment. They see the space before the deadline as an opportunity for research, practice and revision. They see value in turning up early for lectures, reading the chapter, asking questions and engaging with the material.
DA thinking also involves identifying what we know and what we need to know before making a decision. It does not mean we have to know everything; some things are out of our control and pose legitimate threats to value. Data and statistics help, but there’s more to it. Often, we have no data for our most important decisions because we’ve never faced anything like them before. Oftentimes all we have is a subjective belief or someone’s opinion. The goal here is relevant and reliable information, which these are. So use them.
Armed with these tools—an appropriate attitude toward a declared decision, an understanding of your values and trade-offs, distinct and viable alternatives, relevant and reliable information—you’re in a good position to make a high-quality decision.
Again, this is so much easier to say than do. Think about this time of COVID-19, a national election, racial justice, civil unrest, deep division and harsh economic realities. Getting our attitude right is hard. Obtaining relevant and reliable information is hard. Creating viable alternatives and policies is hard. Our collective decision-making is being tested, and it’s never been more important to decide well.
It’s also hard to teach good decision-making to students. For young people, school may seem like a game with clear choices, rules and goals. It can be hard to appreciate how big and important these ideas are. How can we teach them to make good decisions that stand up to the force of culture when the world is much less clear? To learn the nuances and the texture of this game of life, reading the manual is not enough. To see those contours and feel those textures, students need to play.
This is what they do at the Westmont Decision Lab. Students work with local organizations on some of the toughest and most important decisions our community faces: fighting homelessness, providing affordable housing and childcare, supporting student success and more. Students support decision- makers at the organization’s highest levels. They help foster an appropriate attitude toward decision-making and bring clarity of thought by eliciting values and objectives, creating value-focused alternatives and identifying relevant and reliable information.
I love this model of education. It’s professional development, for sure. Our students become better thinkers and professionals as a result. But it’s also missional. We’re training students for lives of leadership and service. We’re preparing them to engage the world professionally, socially and civically by teaching them and modeling for them good decision-making. It’s good for our community too. Ultimately, we want Santa Barbara, our community and our home, to make decisions well while learning to do this ourselves.
Economists talk about the common good of education, which ordinarily refers to colleges and universities graduating liberally educated students into society. Programs like the Westmont Decision Lab turn education into a kind of super good. We don’t have to wait for them to graduate to benefit society: our students benefit society today.
Phil Beccue, a 1981 Westmont alumnus and parent of two graduates, is a legend in the field of decision analysis. He founded White Deer Partners Inc., a consulting firm specializing in quantitative analytics applied to strategic business problems. He expertly applies DA to help people make decisions through metrics that quantify the level of achievement of stakeholder concerns and identify risk and uncertainty. Phil participated in the 3-2 dual degree program at Westmont and earned his engineering and management science degrees from Stanford. He has written numerous journal articles, serves as an adjunct professor at Northwestern Law School and has developed and taught decision analysis and multi-objective decision-making seminars for a wide range of public and private audiences. I’ve asked Phil to talk about his experience with DA.
BECCUE: The field of decision analysis has changed my life. I was exposed to it as a student, and I felt this was what I was called to do. I’ve worked with governments on public policy questions, for the biotech industry on developing new therapies and on many personal decisions. Today I want to discuss an application of decision analysis to a worldwide movement: Business 4 Transformation, or B4T.
B4T refers to businesses in the developing world that seek to be profitable and scalable and bring holistic, Christ-like transformation to communities. We’ve seen how creating more jobs brings more hope and dignity, dignity earns respect and respect creates opportunities for those in these businesses to proclaim the Gospel through lives of integrity and service. This double bottom-line approach focuses on both profit and transformation.
I've been honored to work with a variety of B4T enterprises, including a cheese business in Niger, an aquamarine company growing sea cucumbers in Indonesia, an IT business in Vietnam, a tourist resort in South Asia and a coffee shop in Eastern Europe. These profitable businesses with a missional mindset are transforming their communities.
I also supported the owner of a company in South Asia that employs vulnerable women to make dresses geared for the international market. They’ve been around for a few years and have eight employees, but they face challenges in management and marketing. The vision of the company grew out of the owner’s two simple desires: to craft modern, classic dresses out of beautifully textured hand-loomed fabric of cotton and silk; and to create jobs for young people, particularly women, who otherwise would leave the region to search for work elsewhere. These women often find themselves in vulnerable places, and the opportunity to support themselves and their family with meaningful work transforms their lives.
To give this company long-term sustainability, the owner agreed to step back with me and, as Enrico stated, to “declare a decision” and look strategically at ways to adjust the business’s focus. She was having difficulty finding a local manager and knew the business would not survive without her. She realized the value in taking time out to reflect on options that could lead to greater success in the future. Research in behavioral psychology shows that we usually make decisions when we recognize a problem and try to solve it by finding one or more alternatives, evaluating them and picking the best one. But that’s the wrong way to do it.
What is the better way? First, do serious thinking about your values: what you want to achieve and why it’s worth thinking about a decision in the first place. Then the values guide everything
else, including identifying good alternatives. The values for this business included financial and non-financial values because the goals are to be both profitable and transformative. Other values include the quantity and safety of jobs, the ability to find and keep skilled staff, long-term sustainability and minimizing startup costs. We had a long discussion about values, brainstorming, organizing and highlighting the most important ones. Then we moved to alternatives.
This order is so important. Had we started with business options first, the owner might have simply focused on recent ideas she had heard about. But reflecting on her values first led her to think more broadly about the alternatives that made sense for her. She considered different variations of the dress business as well as completely novel ideas: commercial cleaning, planning children’s parties, running a bakery, etc. We then discussed how the alternatives achieve the values most important for her.
How did we measure how well the business options supported her values? Some objectives are easy to measure, such as operating margin or profit. But others are more challenging. For those, we constructed scales with three or four descriptions describing different degrees of meeting the objective.
One of the objectives was safety for the workers. The scale we developed together included three levels of decreasing preference:
1. A self-contained workspace.
2. A supervised workspace with some exposure to potential predators.
3. An unsupervised workspace with a lot of exposure to potential predators.
As the owner thought through her business options, she determined which level applied to each one. I asked some trade-off questions to infer her opinion about the relative importance of each value. Finally, we scored the business alternatives against the scale with a simple formula to help capture the overall value and rank the results.
Doing this work helped her accomplish two key benefits: she readjusted her business model to focus on new markets and a different mix of products, and she also took a deeper dive on the top three to see which ones would best lead to long-term sustainability. I was glad to see her do that and impressed by both her passion to help vulnerable women and by her humility and courage to explore completely new ideas, all due to the nudge and increased clarity from the decision analysis exercise.
In addition to pointing decision-makers to a path that best meets their values, DA also documents the rationale for making decisions. That helps facilitate communication among people working within the team and other stakeholders. It gives them the essential reasons for pursuing the B4T business. It says, “This is what this business is about. We’re about transformation. We’re about making more jobs and safety.” Those objectives are explicitly measured and counted in the decision framework. Finally, decision analysis creates an efficient and focused way to check in later. We can go back and see how we are doing against our values. Has anything changed? Where are we weak? How can we improve? We can easily update as information changes, and as new alternatives and values arise.
This small organization in South Asia is making a difference in people’s lives, and the decision analysis framework has helped them sort through complexity and get the best answer while considering all the things that tend to make our heads hurt (uncertainty, interdependencies, biases, multiple goals, risk) to achieve clarity of action.