2.26.2009

Decision-Making in a Complex World


After years of banging on the topic of “triple bottom line,” as people have come to describe it, I am still flummoxed at how this gets implemented at the highest levels. Don’t get me wrong: it makes as much sense today as it always has to pursue activities that achieve multiple objectives as once: making a profit AND looking out for people AND preserving the planet.

The problem of going from paper to reality is that where you really want to do this right are exactly the places where it’s hardest to do: from the biggest and bulkiest of entities, all the way up the US government. The recent stimulus bill is just the grandest but by no means the only example of an initiative that wants to simultaneously achieve multiple goals at once.

On the one hand, this is noble and it is smart. It is noble because “triple bottom line” means nothing if we just apply it to the small stuff on the margins and don’t hack at the big hairy stuff. It is smart because sometimes multiple goals reinforce one another, in ways that are better than if we tried to divvy up single goals and pursue them all separately.

But easier said than done. I recently read a report by a government entity (not for public eyes, so I can’t divulge the source or the topic) that stated that they were looking to judge proposals based on the following criteria:

• Will it make money?
• Will it be done quickly?
• Will it create jobs?
• Will it improve health, safety, and quality of life?
• Will it have proper oversight?
• Will it adequately involve all of the parties that are affected?
• Will the concerns of business, labor, and civic groups all be addressed?
• Will it properly allocate risk?

Whew, that’s 8 angles from which to judge a proposal. And I don’t think that list of 8 even covers the important consideration of how something plays out over time: are we sacrificing short-term gain for long-term loss, have we set it up so that the right people are calling the shots in the future, how much flexibility do we have if something big changes and we want to turn on a dime in the future, etc.

Of course, that’s the beautiful madness of pursuing multiple objectives at once, especially in the public sector. In the purely for-profit world, how we determine whether something works or not is brutally clean: you make an X% return on your investment, you sell more widgets than they next guy or not, you stay in business or you don’t. In the more nuanced, “triple bottom line” world, our evaluation criteria, for better or worse, is less definitive; and despite efforts to make it more definitive, the precise answer will by definition be elusive.

So for as much as I’m going to push for more “triple bottom line” thinking, and as much as I’m going to push for more measurable ways to quantify and weigh success in all of these categories, I think we’re all just going to have to live with that uncertainty. After all, the key decisions we make in life do not easily boil down one number: where we go to college, who we marry, who we vote for president or governor or mayor. Rather, whether we know it or not, we delicately and instantaneously balance multiple decision criteria, qualitative and quantitative, head and heart.

To be sure, there are broader actions we can lobby for that help us all make better decisions, like pricing natural resources more correctly, or producing reports that shed light on previously murky areas like child labor or energy efficiency. But ultimately, we as individuals and business owners and government officials have to make choices with imperfect information and conflicting priorities. Let’s hope that when it’s up to us, we make good decisions; and when it’s up to others in ways that affect us, we hold those others accountable to make good decisions.
Post a Comment