Multi-stakeholder Decision Making For Complex Problems: A Systems Thinking Approach With Cases

A Systems Thinking Approach with Cases

Kambiz Maani

• Publisher: WSPC
• Year: 2016
• ISBN:
  9789814619752
• Topic: Biological Sciences
• Subtopic: Science General
• Index: Biological Sciences

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In the complex world of today, important policy and business decisions are still made with a 17th Century reductionist mindset and approach. Yet, complex challenges such as climate change, poverty, public health, security, energy futures, and sustainability transcend any single science, discipline or agency. Rather, they require integration of social, economic, cultural, political, and environmental concerns to achieve acceptable and sustainable outcomes. This entails synthesis of diverse knowledge and perspectives in a transparent and unifying decision-making process, engaging stakeholders with competing interests, perspectives, and agendas under uncertain and often adversarial conditions.

Multi-Stakeholder Decision Making for Complex Problems — A Systems Thinking Approach with Cases brings together a unique self-contained volume to address this challenge. The book introduces the systems approach in non-technical language for multi-issue, multi-stakeholder decision making supplemented by numerous case studies including business, economics, healthcare, agriculture, energy, sustainability, policy, and planning. The book provides a fresh and timely approach with practical tools for dealing with complex challenges facing evolving global business and society today.

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Contents: Four Levels of thinking;Feedback Loops (Reinforcing and Balancing);Behaviors over Time Graphs;Casual Loop Modelling;Law of Leverage;Delay;Decision Making Pitfalls;Learning Lab (LLab);International Cases Studies;
Readership: Graduate students and researchers specializing in decision sciences; managers and decision makers in organizations.
Decision Making, Systems Thinking, Multi-Stakeholders, Complexity0

Part 1

Concepts and Methods

Chapter 1

An Introduction to Multi-Stakeholder Decision Making

We cannot solve problems with the same mindset that created them.

Einstein

1.1 Introduction

As you read these pages, the world is growing ever more complex, confused, and unpredictable.

Complexity characterizes the world and all human endeavors today — in business, government, social, natural, scientific, and political spheres. Local problems and global challenges can no longer be viewed and solved with narrow, single dimensional mind-sets and tools. Leaders and decision makers need to understand complexity and how to deal with it in multi-stakeholder scenarios.

Systems Thinking is the science of integration. It provides a ‘language’ for decision makers, researchers, research managers, policy makers, and knowledge managers to understand complexity and multi-stakeholder problem solving. In addition, Systems Thinking processes engender problem-solving skills, team participation, and team learning.

Complexity arises out of interdependencies. Interdependency of relationships is the main source of complexity and complexity is the principal source of uncertainty and ensuing anxiety. Climate change, poverty, the water crisis, food quality and security, the environment, and similar ‘big’ issues are not just passing problems for governments, policy makers, and scientists. They are everyone’s and every day’s burden. Dealing with big issues, and even not-so-big ones, requires a different mode of interacting and decision making unlike any we have known before. Information and communication technologies are rapidly changing the modes of interacting. Social media is swiftly shifting the power to the masses, especially the young and educated. Mass movements are becoming the mainstays of social and political change.

The challenges leaders face today are greater than ever. No longer can a single leader be responsible for an organization’s future. Everyone in a company, school, government agency, or community must take on the challenges and lead from their own position. But leading together in this way requires a special attitude and a special set of skills, including self-inquiry, shared vision, and Systems Thinking.¹

1.2 Why Decisions Fail

Leaders, managers, and policy makers are often frustrated by a lack of consensus and collaboration on challenging issues — so they end up blaming outside factors or each other. Even setting aside special interests, hidden agendas, and ill-intentions, there is an alarming level of divergence and lack of a shared understanding of complex issues. This is highlighted by the fact that so many decisions made by very smart and highly educated managers and leaders in elite and sophisticated organizations often fail miserably, with far reaching and adverse consequences for everyone.

Peter Senge, the author of The Fifth Discipline, once said that “today’s problems are yesterday’s solutions”. By the same token, a good number of today’s interventions will become future problems. Is there a way to circumvent this common downside so that today’s solutions don’t end up as tomorrow’s problems?

The discipline of Economics is grounded on the notion of ‘rational’ decision making. However, researchers in psychology, cognitive science, and management have found compelling evidence that refutes rational decision making. Noble Laureate economist and psychologist Hebert Simon dubbed ‘bounded rationality’ as a notion that explains why the human mind cannot process information and decode relationships beyond second or third level orders. In fact, the role of intuition and emotions in decision making is often overlooked in management ‘science’ and quantitative modeling. This is ironic as most people can relate to this intuitively. Only computers and robots could be expected to make rational and strictly rule-based decisions.

Based on his comprehensive study of human decision making, John Morecroft concludes that “there are severe limitations on the information processing and computing abilities of human decision makers. As a result, decision making can never achieve the ideal of perfect (objective) rationality, but is destined to a lower level of intended rationality.”² He identified six common practices that underlie the shortcomings of the human decision-making process and which support bounded rationality. They are:

1.Factored (fragmented) decision making
Complex issues are divided up into pieces (e.g., disciplines, sections, departments) to facilitate decision making, as “they cannot be handled by an individual”.

2.Partial and certain information
Decision makers tend to use “only a small proportion of the information that might be relevant to full consideration of a given situation”. They also tend to discard uncertain information. This diverts the focus of the decisions to problem symptoms and locally optimum solutions.

3.Rules of thumb / Routine
This refers to situations where decision makers, under time pressure, resort to “quick fixes” in order to rectify a situation as quickly as possible. Quick fixes often “backfire” or result in unintended outcomes.

4.Narrow goals and incentives
A focus on narrow goals and incentives compromises other areas and undermines the performance of the larger system.

5.Authority and culture
Culture and tradition provide powerful predetermined frameworks for decision makers (i.e., mind-set, mental model). Through customary routines and commands, prevailing values and traditions are transmitted to all and thus get reinforced and become further ingrained.

6.Basic cognitive processes
“People take time to collect and transmit information. They take still more time to absorb information, process it, and arrive at a judgment. There are limits to the amount of information they can manipulate and retain. These cognitive processes can introduce delay, distortion, and bias into information channels.”³

Other researchers have identified further factors that lead to poor managerial decision making, including⁴:

•Presence of multiple actors (stakeholders) in decision making,

•Lack of understanding of feedback in complex systems,

•Lack of appreciation of non-linearity, and

•Hidden time delays

Hence decision making about complex problems fails for many reasons. Human behavior and lack of understanding are not the sole reasons why decision making about wicked problems fails. The nature of the problems also contributes to unsatisfactory outcomes.

1.3 Wicked, Messy Problems

For every complex question there is a simple answer, and it is wrong.⁵

From a young age we have been taught in school that there’s only one correct answer to a problem. However, most real-world problems are ‘wicked’ and defy this maxim. Horst Rittel and Melvin M. Webber, Professors in Design and City Planning respectively, coined the term ‘wicked problems’. Later, Richard Buchanan defined wicked problems succinctly⁶:

A class of social problems which are ill-formulated, where the information is confusing, where there are many clients and decision makers with conflicting values, and where the ramifications in the whole system are thoroughly confusing.

Wicked problems arise in any situation involving multiple stakeholders where the following characteristics are present:

1.The solution depends on how the problem is framed and vice-versa (i.e., the problem definition depends on the solution).

2.Stakeholders have radically different world views and different frames for understanding the problem.

3.The constraints that the problem is subject to and the resources needed to solve it change over time.

4.The problem is never solved definitively.⁷

Russell Ackoff, a renowned systems scholar, refers to these as ‘messy problems’ — situations in which there are large differences of opinion about the problem or even on the question of whether there is a problem. Thus, messy problems are ill-structured situations that make it difficult for decision makers and stakeholders to reach agreement.

There are two sources of messy problems, the individual and the group or team situations. Limited information processing capacity and entrenched mental models are the main contributors to the individual sources of messy problems. In particular, mental models are powerful drivers of behavior as they shape the perception of reality.⁸

The group sources of messy problems relate to the dynamics of their interaction and the tendency of members to defend or promote their own self-interest in decision-making situations. Often the difficulties in group interaction are exacerbated by lack of independent investigation on the part of team members and the manner of their communication.

The nature of wicked, messy problems described in the preceding paragraphs highlights the role of an independent and experienced facilitator in multi-stakeholder decision-making situations. A facilitator should have no stake in the outcomes...

Table of contents

• Cover Page
• Title
• Copyright
• Dedication
• Contents
• Preface
• Part 1 Concepts and Methods
• Part 2 Cases
• Index