Decision Engineering
preferred known alternative is below the target. Because of the that returns from the two options vary not only with respect to
role of targets, discussions of risk taking and search in the limit- their present expected values but also with respect to their vari-
ed rationality tradition emphasize the significance of the adap- ability, their timing, and their distribution within and beyoncl
tive character of aspirations themselves. the organization. Processes for allocating resources between
In learning and selection models of rules, discussions of ex- them therefore embody intertempo ral, interinstitutional, and
ploration and exploitation are framed in terms of the twin pro- interpersonal comparisoils, as well as risk preferences.
cesses of variation and selection. Elimination of inferior foims, The difficulties involved in making such comparisons lead to
routines, or practices is essential to sunrival, but so also is the complications in speci$ring appropriate tradeoffs, and in achiev-
generation of new alternative practices, particularly in a chang- ing them. Defining an appropriate balance is made particularly
ing environment. Because of the links among environmental tui- difficult by the fact that the same issues occur at several levels
bulen ce, decision diversity, and competitive advan tage, the effi- of a nested system-at the individual level, the organizational
ciency of any decision process is sensitive to the relation between level, and the social system level. Achieving an appropriate level
the rate of exploratory vañation reflected by the practice and is rnade particul arly difficult by dynamics that tend to trap deci-
the rate of change in the environment. For exampfá it has been sion makers in cycles of accelerating exploration or exploitatioll.
argued that the persistence of garbage can decisión processes in On the one hand, exploration can become a trap. If failure
organizations is related to the diveriity advantage mry provide usually leads to exploration and exploration usually leads to
in a world of relatively unstable environments, wñ.tr páiá¿ with failure, a decision maker can be trapped in a cycle of explo*
the selective efficiency of convention al rationality. ration, trying one new thing after another without spending
long enough exploiting any innovation to secure the gains from
experience that ate necessary to make it fruitful. When decision
6.2.3 Finding a Balance
processes lead to a string of inadequately exploited experi-
Ordin ary experience teaches that social institutions often suffer ments, they are likely to be improved by interventions that in-
from a failure to exploit what is known. Enthusiasms for cre- hibit exploration.
ativity, new ideas, and change lead decision makers to be lax in On the other hand, exploitation can also becorne atrap. The
assuring that the plumbing works , that telephones are or- essence of exploitation is the refinement and extension of exist-
swered, that the logistics are well managed. Glorification of ex- ing competencies, technologies, and paradigms. Its returns ate
ploration obscures the fact that most new ideas are bad ones,- positive, proximate in both time and space, and predictable.
most changes are detrimental, and most original inventions are The essence of exploration is experimentation with new alter-
not worth the effort devoted to producing them. Decision sys* natives. Its returns ate uncertain, distant in both time and
tems that engage in exploration to the exclusion of exploitation space, and often negative. Strategies of exploitation that lead to
are likely to find that they suffer the costs of experimentation locally positive outcomes are likely to come to domin ate over
without gaining many of its benefits. They exhibit too many u1- exploratory strategies that are globally better but locally inferi-
.
developed new ideas and too little distinctive competence. Con- or. That is not an accident; it is a consequence of the temporcl
versely, systerns that engage in exploitation to the exclusion of and spatial proximity of their effects, as well as their precision.
exploration are likely to find themselves failing to discover and Those traps to exploitation stem not from stupidity but from
develop new capabilities and nelv opportunities. In a changing learning. Refinements and improvements in competence asso-
world, they are likely to become obsol,escent. ciated with improving standard paradigms, conventional knowl-
I-Jnderstanding the choices and improving the balance be- edge, and established methods provide local gains that are com-
tween exploration and exploitation are complicated by the fact pelling. As they develop greater and greater competcnce in
240 A pRrMIlR tlN DlrcrsroN MAKTNc ':,
persistently exaggeratá into action is likely not only to lead to decision mistakes but
performance, thus reduce the failur
rít";
may be stimulated not only by failure " but and experimentation
also by the personal
also to confuse subsequent inferences. Patien ce, in combination
with decisiveness, is likely to yield gre ater gains than an alterna-
security and illusions of invulnerability
produr*á uy pirrirt*nt tive strategy that combines quick learning with incrementalism.
success' As a result, managing explorution
by contiottirrg pat-
terns of success and failure is more compticated
than it iright
appear at first blush.
6.3.2 Extracting Knowledge from Others
PROFITING FROM THE RULES OF OTIIERS When decision making is organized by a logic of consequence,
problems and alternatives are ordinarily taken as given, and the
students of decision making have studied information problem is primarily a matter of establishing the
the spread of prac. .r
tices, forms, and nonns thróugh populations likelihood of various possible consequences conditional on
of decision mak-
ers. They emphasize the imporiance to uny-giu"" choice of one of the alternatives. That is the conception under-
áeririon
Tuk"l of acting in a way that-is appropriat;.'Th"; ;;;r;;; lying the design of many decision support systems. It empha-
that decision makers who follow appropriate sizes information about the future in order to allow choice in
rules gain
m1? as decision mafers, and that tégtimacy racilitatEs legiti- the present.
s,rrvivar.
The spread of rules, forms, and ir;;;;tiniu, Such uses of information are certainly commor, but they are
p.oseq by edict d gou."T-"1r"r
f,ractic;. i*- probably less characteristic of decision makers than a som.*ttut
"g"ri.i*;#;
sional ol tr.age associations. It soñetimes - or*.r-
resurts from contacts different mode. Rather than look for information about conse-
among decision makels, This copying is quences to resolve a choice among alternatives, decision mak-
ra"ilitut; uy iüru.-
ment in a network and influen""a u¡iporition ers scan their environments for surprises and solutions. They
in thaíne¡vork.
TTlo decision makerswho *" ir"ltn* often do not reco gnize a "problem" until they have a solution.
decision makers use those networks "*ÉáAü;,#"rt,
not only to improve infor- They operate in a recognition/appropriateness mode. They
mation flows and channers of influence,
but árro to iiu* tá* ro look for a match between a situation and practices, preferences,
and identities they have in their repgrtoire library.
250 A pRTMER oN DnctstoN MAKTNG
Decisk¡n Engineering 25 I
In such a mode, identities and response repertoires
are ordi- than to scanning and interpreting ambiguous environments;
narily taken as given, and the infor¡natio'probl.*is
one of recognizing a situation. A rure-folr"i¡"g irimarily tied less to evaluating a specified set of alternatives than to a
á""isín -ut * wide spectrum of knowledge relevant to actions impossible to
is more interested in timely information
about the state of the anticipate precisely; less likely to illuminate the consequences
world¡1s it unrords ,r'u" i"
ñtouuui-rü,""Ji"u;J o'JJrro" ,". of known alternatives for known goals than to recognize situa-
jure. The presumption is tirat appropriate action"i" wili ¡" r.norn
immediatel¡ once rhe siruarion is ráu"at"a. tions and pafu them witn- established routines.
Á, ,"¡;ñ,;;t
toring supporr systems emphasize earty w-arniG^;;;- "
portunities and dangers over estimates
ór ¿irtuot"posriuititi"r,"p. ledge
A. mgnitoring *ylt", ;;. ,h" environmeni
events that require a change in performu".";;;;;;lril;;;
fo, current
Intelligence is inconceivable without knowledge, but knowledge
on networks of informers, gossip, disorderly
quick, clear signals of surpñs"r. Á .onr"qu"n."
iliil;rt";;;; also poses problems for decision intelligence. In particular, itls
urr"rr_.nt in. worth noting that substitutes for knowledge can interfere with
formation system tries to irganizesystematic aa
individual knowledge, informed decision making is Those rituals and ceremonies of decision making are rein-
hard, for
knowledge accentuates uncertainty about the efficacy forced by interpretations of the career experiences of decision
of action.
makers. People who are successful normally discover ample
SUSTAINING ACTION grounds in their experience to sustain a belief in their signifi-
cance. The stories they tell develop a story line that promotes
Despite the encroachments of knowledge, one thing such a belief among readers and listeners. Hierarchicál promo-
that seemg
obvious about the human estate is th; persistence tion systems in which individuals compete for decision making
of human
ambitions for significance. Myths of importance, the authority on the basis of past performances make it likely thai
idea uf ui.
sion and its implementation, the idea of meaningful individuals with decision making authority will be relativeiy un-
action, and
the idea of human will are not only ancient traditions encumbered by doubts about their capabilities for makin g adif-
but also
conspicuous parts of contempor ary human faith. ference. People who are promoted in a hierarchy are g*lr"rally
Support for
decisiveness in decisions in actions normally comes more resistant to false beliefs in impotence than to false beliefs
from one of
three different sources: hopes for consequence, pursuit in control. SimilarlY, an educational system organized by pro-
of iden-
tity, or arbitrary willfulness. Each contiibutes to maintaining motion on the basis of success predisposes those who are pro-
commitment, and each has its difficulties. moted to believe in possibilities for human control.
The usefulness of mythic stories of decision maker signifi-
Hopes fo, Conseql¿ence.Some people come to believe that therÉ cance does not depend entirely on their truth. Any rush ñ so-
is, in fact, a role for decisive ñ.rrnan action in determining phisticated doubt about the possibilities for significant action
the
course of history. Some find hope in a general sense should not ignore the extent to which a belief in heroic conse-
that human
destiny is within human controi. otheis find hope quences can sustain commitment to meet unreasonable de-
in the way in
which path-dependent, branching histories are sensitive mands on decision makers. "Thke away an ordinary person's il-
to
small interventions at particular poittts. Those beliefs lusions," says I)r. Relling, "and you take away happiness at the
may be il-
lusions' as many students of histoty would say they same time." u
are;but they
are beliefs that are conspicuous and are supported The issues extend beyond individual dreams of happiness,
II by many
other students of history. however. There are potential social costs in a loss of confidence
A few of the individual and social mechanisms by which deci- in human significance by decision makers. Consider two general
sion makers develop confidence in their own capabilities types of errors a decision maker might make in assessing the
for af-
fecting action have already been described. When great importance of intention al actions in controlling history. A deci-
cor'-
mitment demands great expectations but history cannot sion maker might mak e a "false positiv e" error of coming to be-
provide them with clarity, myths of heroes are invented. lieve in considerable personal control over outcomes when, in
Stories
are told in which the flow of history is attributed fact, that control does not exist. Such a belief would lead to (fu-
to the inten-
tions, strategies, and virtues of indiüdual decision tile) attempts to control events, but it would not otherwise af-
makers. The
routines of decision making are orchestrated to confirm fect results. Alternatively, a decision maker might make the
those
visions of significance. fnformation is gathered "false negative" error of comittg to believe personal contról is
and reported to
symbolize the importance of decisioá makers.
Meeiings are not possible when, in fact, it is. Such a belief would lead to self-
held to symbolize that decision makers are in control. confirming withdrawal from efforts to make a difference. The
Memo-
randa, procedures, and rhetorics of action symbo social costs of the first type of error seem small relative to the
lizethe impoi-
tance of decision making. second. Given a choice, most people would probably prefer a
268 A PRIMER oN DECISIoN MAKING
DecislonEngineering 269
:
to individuation through the making of choices and the accep- From this perspective, the irrelevance of decisions and the
tance of responsibility for them. Personhood is associated wiih inconsequential role of human intention in human destiny are
making decisions: choosing an education, an occupation, a mar- not justifications for inaction but a basis for rejoicing in action.
fiage, a family, a place to live, and a time to die. dhrn this com- If decision making were to make sense becaúse of itr conse-
mitment to life as the making of choices permeates identitieso quences, then it would be nothing more than economics. Ir de-
the denial of decision making is tantamount to the denial of ' cision making were to make sense because of its consistenry
self. To question the existence of decision options or to exhibit with an identity, then it would be nothing more than sociology.
passivity in the face of them is to reject ónr'* identity as Bu.t if decision making makes sense neither as a pursuit óf
a
objectives nor as the fulfillment of 'ah identity, then it repre-
270 A pRTMERoN DEcrsloN MAKTNc Decislon Englneertng 27 I
sents the ultimate declaration of individuality,
the right to sion process will yield decisions that can be unambiguously de*
freedom from concern about consequenr* scribed as intelligent. History is cluttered with decisions and de-
uná identity, the
proclarnation of an aesthetic of human
life. Don euixote said: cision processes that seemed to offer short-run improvements
"For a knight-errant to make himself crazy ro, u-r"uron war- in some domains but in retrospect created greater problems in
rants neither credit nor thanks; the point the long run or in other domains. And history is filled with evi-
' is to be foorish with_
out justification.,' 7 dence of the irrelevance of human actions. fn the long run, de-
cision makers are all dead and the species is extinct.
THE PURSUIT OF INTELLIGENCE Such a catalog of despair might be seen as an invitation to
abandon decision making. Hopes for magic in new technologies
The indeterminacies of decision intelligence and or philosophies of decision seem to be as unrequited as they are
the com-
plications in achieving it make the-purs,rit
of decision intelli. unquenchable. The issues ate ancient. Their resolution is elu-
gence frustrating. Arthough individuáls
and societi", iuu" tong sive. Knowledge about the difficulties involved in defining and
struggled with issues of-barancing the short achieving virtue through decision making leads to pessimism
run and the lon!
run, coping with the_ shifting nature of preferen.", about the possibilities for intelligent action. The means by
unJ identi-
ties, balancing benefits to some with which individuals justify action in the face of such problems
costs to others,
ing the symbolic and substantive elements "rú;;;;-
of decisions togeth- " might well seem to make the problems more severe. ff sustain-
er, modern theories of colrective decision
,'utiog ou"rli-" u* ing action involves colluding in illusions of control, accepting a
conspicuous for their failure to resorve
,.r.r, piolt"*r-io
definition of decision intelligence. The problims tt, social ideology of human identify that is disturbingly idio-
nously changing preferenceJ and identities
;i;"d";;: syncratic to modern Western society, or embracing one or
uó"rd thE another unreasoning faith, it is easy to conclude that action is
qeagh of any current formulations. And the symbolic "r"- c'ontent not worth sustaining. The alternatives manage to give passivity
decision making is alternately treated as
of
corrupt, paramount, or a good name.
irrelevant. A book on decision making might possibly conclude with
Efforts to improve the practicar procedures such an apostasy, but this one does not. Such an ending would
. of intelligent de-
cigign making without woirying abóut a precise be a mistake for two conspicuous reasons: First, the problems
definitiJn of in-
telligence seem similarly frustráting. A fruitful are difficult, but they are not beyond human comprehension
balance between
e4ploration and e4ploitation is peisistently and amelioration. It is possible to apply thought to the prob-
upset Uy Ayrru*i.,
of adaptation that lead decision-makers to lems of intelligence, to profit from an understanding of how de-
excess of one
othel' Gaining knowredge from e4perience or from or the cisions happen in order to make them happen better. Much of
others is
persistently confounded by timitations in the present book has been devoted to laying a foundation for
-efforts individual ana oigani
zationalcapabilities. And to develop usefur te"rrnoiogies such improvements. Foundations do not keep the rain out, but
of foolishness and poetic ambiguity to comprement they offer some small basis for imagining that a roof is possible.
technoro-
gies of reason and information .Iurity
.""-,á runl"," r"i""r- Second, if human commitment depended on a comprehen-
tial ideological resistance. sion of life and on hopes for consequence, cornmitment would
Any reasonable contemplation of that record of be less beautiful to contemplate than it is. The elegance and
failure
erodes confidence in the idéa that decision beauty of human life is augmented within a vision of decision
making uná tt
pectations of meaningful action,that it " "*-
impries i.-pru"ri¡1, making, and the human spirit is elevated. The idea of decision
routes to a moral rife. It is hard do be confiáent making gives meaning to purpose, tq self, to the complexities of
that árv ¿.ri-
272 A PRrMriR oN DHCrsroN MAKTNc