Can You Make the Right Decisions?

Decision-making is hard.

So hard that we pay people handsomely to be professional decision makers:

• Doctors
• Underwriters
• Bank Managers
• Tax Inspectors

All of them make their living by taking complex ill-defined situations and making decisions.

Unfortunately they don’t always decide the same way

If you put two professional decision makers in a room at the same time, with the same complex ill-defined situation they will make a different decision.

It all comes down to nuances and personal experience.

Which is a problem when making the right decision is very important.

But it needn’t be that way

What the well paid decision makers won’t tell you (probably because they don’t know) is that when it comes to making a decision the Pareto principle or 80:20 rule holds.

Some factors used to make a decision are all important, but the rest of the pieces of information we hold dear are simply noise.  Most of the nuance and background information is irrelevant.  To make a decision you simply need to know which factors are important, and ignore everything else.

That is hard to believe

I guess you don’t believe me, so let me tell you a life and death story.

In the late 1990’s Brendan Reilly became chairman of Cook County Hospital’s Department of Medicine.  The hospital is one of the largest in Chicago.

The hospital had many problems, not least of which was its Casualty Department (think E.R.).  It had constrained resources, high demands and long, long queues.

Not great, particularly for those who really did have an emergency.

What caused the queues?

One of the bigger problems was patients with suspected heart attacks.  Every day about thirty people arrived at Cook County’s casualty department complaining of chest pain.

For the overworked doctors, with waiting rooms stuffed full of patients an overweight middle-aged smoker complaining of chest pains wasn’t a tough call.  The safest decision, if there was any doubt, was to send the patient to a cardiac ward where they could be watched to make sure they didn’t succumb to heart failure.  It was a brave man who turned them away, particularly in this litigious world.

The decisions were wrong

Invariably, after a couple of days stay 19 out of 20 patients were fine and sent home.  Beds in Cardiac Wards cost thousands of pounds every night.  Misdiagnosis was a vast waste of time and money.

Worse still 2% to 5% of patients didn’t have their symptoms spotted and the staff sent them home, to return later in a far more serious state.

The diagnoses and decision making was a mess and the outcomes worse.

How difficult can it be to diagnose a heart attack?

The situation perplexed Reilly so he took a sample of 20 case histories and gave them to a set of doctors who regularly treated heart conditions to see if they agreed in their diagnoses.

But they didn’t, their diagnoses were vastly different.

Could a computer do a better job?

Reilly sat down and chatted with a cardiologist called Lee Goldman who had once given a computer the details of hundreds of suspected heart attack cases.

The computer ran the statistics and showed that there were 4 key questions that predicted a heart attack:

• Does the electro cardiogram suggest a problem?
• Is the pain felt unstable angina?
• Is the patient’s systolic blood pressure below 100?
• Is there fluid on the patient’s lungs?

Using this information Goldman had created a decision tree that predicted heart attacks.

Nobody was using the decision tree

No self-respecting medic with years of training would listen to a computer or follow a simple decision tree.  They believed their decisions were far more sophisticated than that.

But the hospital was in trouble, so Reilly insisted that they trailed Goldman’s logic.  For two years some patients were treated they way they always had been and some were diagnosed using the decision tree.

So who won?

When the results were compared the algorithm won hands down:

• It was 70% better at recognising false alarms than doctors
• It also predicted real cases 95% of the time, compared to doctors who were right between 75% and 89% of the time.

If you are unlucky enough to end up in Cook County Hospital with suspected heart attack you will see the decision tree up on the wall.

(The full story can be found in Malcolm Gladwell’s book Blink: The Power of Thinking Without Thinking.)

Are you clear about your decisions?

When it comes to making decisions, there are invariably only a very few factors that are important.  If you can find what they are and write down the decision making logic then you could make those decisions far more effectively.

Which means that your customer service will improve and your costs will go down.

The stumbling block

It won’t be plain sailing.  Persuading all those highly paid professional people that a computer with an algorithm can do a better job than they can with all their years of experience is going to be an uphill battle.

There are some careers which, if only for the time being, are perfectly safe from automation.   Diplomacy is one of them.

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