Arts Management and the indecisive squirrel
Uncertainty in decision-making can leave you skittering back and forth or dangerously frozen in place. Two questions can help unlock decisive action.
Ill-prepared for the privilege of living,
I can barely keep up with the pace that the action demands.
I improvise, although I loathe improvisation.
I trip at every step over my own ignorance.
Wisława Szymborska, from “Life While-You-Wait”
Every decision in Arts Management, in fact every decision about anything, is made in uncertainty. We don’t and can’t know everything about our choices, their consequence, or how they entangle with the visible and invisible dynamics around us.
This reality can turn us into indecisive squirrels. For some, the uncertainty results in skittering back and forth, changing decisions and directions repeatedly. For others, it leads to freezing in place, taking no action (which is, of course, also a decision). Either response leaves us vulnerable to oncoming traffic.
In How to Measure Anything: Finding the Value of Intangibles in Business, Douglas Hubbard offers two questions to help us decide when to take immediate action and when to gather more information:
What’s the chance of being wrong?
What’s the cost of being wrong?
The chance of being wrong relates to the uncertainty surrounding the decision or action, which can be high, moderate, or low depending on the environment, the available information, and the variability of the possible outcomes. The cost of being wrong relates to opportunity cost of choosing one path rather than another, or choosing action over inaction. This cost can also be high, moderate, or low depending on the scale, salience, and impact of a negative outcome.
Your assessment of these two questions, for the decision you have in front of you, will clarify your effort.
For our decision-making squirrel mid-way to the other side of the road, the chance of being wrong will depend on how uncertain they are about where the food, water, shelter, or friends they seek are located. If they can see that goal clearly on the other side of the street, their uncertainty is low, so their chance of being wrong is also low. If they have no idea, their uncertainty is high and their chance of being wrong is also high.
But also important is the cost of being wrong. On a rural backroad, the cost of making a wrong choice (or of freezing in the middle of the road) is low. If they’re wrong about the location of what they seek, they can wander back across the road again in reasonable safety. On a busy, multilane, urban highway, however, the cost of being wrong is significant, both in physical safety and in the opportunity to change plans later on.
Hubbard suggests that when both the chance and the cost of being wrong are high, decision-makers have good reason to spend LOTS of money, time, and effort to reduce uncertainty. The value of additional information is extremely high. If both are low, then new or different information doesn’t carry much value, and the decision can be made with what you already know.
An additional benefit of this framework is the two paths to strategy it offers in an uncertain world. If you’re facing high chance and high cost of being wrong on multiple fronts, you can decrease the chance of being wrong through thorough analysis, rigorous filtering, and risk-averse practices. Or, you can decrease the cost of being wrong through nimble, safe-to-fail, small-scale experiments.
Larger and longer-standing institutions will tend toward the former strategy (because the costs and consequences of anything they do are high). But in a rapidly changing environment, the latter approach has greater potential.
So, if you find yourself or your team frozen in indecision, or frantically shifting decisions on the fly, consider the chance and the cost of being wrong in what you’re doing, and take action (or take stock) accordingly.
Andrew
POEM SOURCE: Szymborska, Wisława. Map: Collected and Last Poems. Translated by Clare Cavanagh and Stanisław Barańczak. Boston: Houghton Mifflin Harcourt, 2015.
From the ArtsManaged Field Guide
Function of the Week: Spaces & Systems
Spaces & Systems involves selecting, securing, stewarding, and harnessing the built environment and technological infrastructure. Relating to this week’s Field Note, decisions around building/buying/renovating spaces or systems can have a particularly high chance and cost of being wrong.
Framework of the Week: Calibrating Uncertainty
Informing your decision-making and evidence-gathering by measuring the chance of being wrong and the cost of being wrong.