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How to address decision making challenges – Peer Pressure


This week I thought I would write some posts about how enterprise decision management can help address some of the very real challenges in decision making. First up is peer pressure. A friend sent me this article from the Sloan Review – Applying (and Resisting) Peer Influence -and a couple of key concepts are clear from reading it:

  • Peer pressure can really influence decision making
    Especially when a situation is uncertain people look to their peers to see what they are doing. However, as noted below, they often don’t realize this.
  • People are poor at recognizing why they do what they do
    For instance, peer pressure is widely discounted with people giving all sorts of reasons for their decisions even though the clear cause (to an outside observer) was peer pressure.

From a business perspective, the first issue has a couple of consequences. Firstly it means that once a few people on your staff have made a “bad” decision it will become more likely that other members of staff will copy it – a misunderstood policy rapidly spreads because “everyone” is interpreting it that way. Secondly it means that staff who are confused or uncertain may ask each other rather than consulting manuals or guidelines as they prefer peer support to directives.   Lastly it means that changing behavior can be very challenging if the old behavior has been around a while as even new staff will see that their peers act in the old way.

Clearly decision automation and management can help with some of this. Automated engines are not, generally, very worried about their peers. They will always look up the rules rather than see what someone else is doing and analytic models have a statistical basis that ensures significance. There is, I suppose, a risk that peer pressure will affect how rules or models are developed but this process tends to be much easier to monitor and control as it is done under less time pressure than making a specific decision and by staff who are typically better trained and paid.

The paper says:

a more subtle problem occurs when they fail to recognize how peer influence is affecting their own decisions. Such situations can be particularly dangerous, leading people to do exactly what they shouldn’t, all because they inadvertently have listened to the wrong voices.

and this illustrates the particular danger of uncontrolled decision making as the influence of other (potentially bad decision makers) will not even be recognized.

The second point has a broader applicability in the automation of decisions. It is increasingly important for organizations to be able to show how they made a decision, for compliance purposes. If the only way you have to record why a decision was made a certain way then you rely on what people say influenced them. However, this is unlikely to be the full story. Automated decisions, in contrast, can log the exact rules and models that were fired, what the result was and how therefore the decision was made. This is precise and unambiguous and so much more likely to be satisfactory to a regulator.

Decision automation and management is not a perfect answer to every kind of decision but the very real dangers of peer pressure are one more reason for considering decision management.