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April 06, 2008

Judgement Heuristics and Productivity

Posted in: EBM, Heuristics, Management, Strategy

Heuristics are “rules of thumb” used to make complex decisions easier. They are particularly used to create a method that often rapidly leads to a solution that is usually reasonably close to the best possible answer, although they are a form of fuzzy logic and not always accurate in all contexts.

Heuristics are useful in the world of Business where choices involving many variables (including social dynamics which are hard to define) need to be made.

For example, here are some Heuristics I use to make my business life slightly simpler:

  • If you can’t think of a solution to a problem, imagine it is already solved and then work backwards to find out how you might have got there.
  • Don’t take on new business opportunity which doesn’t align with the stated vision and purpose of the organization.
  • Given the choice, meetings are always at my office.

I could go on, but hopefully you get the point. It just means that I spend less time wondering about these little decisions which need to be made quite often.

Heuristics can be applied to many instances which require subjective judgement. For example, when deciding which person to hire among many candidates (where each “box” you need to “check” is a heuristic of sorts). You can and should weight the heuristics in cases like this so that more important criteria can be prioritized over “nice to haves” in any particular individual.

Many business processes which are used by consultants are heuristics, which serve as guidelines. So, yes, heuristics can be monetized. People love guidelines, and “formulas for success”, if you’ve worked out a technique to generally ensure a good outcome to a particular challenge (be it weight-loss, or website design), then consider documenting it.

Another useful application of Heuristics is in gaining rapid competence in unfamiliar fields. If someone has done it before you, then you can model their process and break down more complex challenges into definable steps to follow. This is often what we seek to achieve when we use case-studies, and define “best practices” in business.

My own finding with judgment heuristics is that they should be documented, practiced, and be in an almost perpetual form of testing, where you tweak and refine the process as you go. As the chaps at World Wide Creative would say – never trust a skinny chef (which is itself a heuristic)! The outcome is that you can become a more reliable performer, and you can save time, and use more mental energy on more interesting challenges.


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