The HR Seat Brain at the Table

This is the fourth post in a series on decision-making.

In yesterday’s post, I challenged you to decide on which of two options to take for two different scenarios.  One scenario involved gain, and the other involved loss.

They both involve the same basic math, but people seem to be more likely to take bigger risk when faced with certain loss, and likely to take certainty when faced with a potential gain.

Today’s decision points are similar, and quite possibly something you have faced in your career if you are working as a true partner with your business leaders.

Here’s the situation. You and the other leaders of your business see problems ahead. Competition has gotten tough, the market for your products has seen a lot of variability, and there are some concerns that your new products may not be robust enough to help turn the tide in your favor. The team has been collectively working on some solutions, and some of these have difficult-to-accept outcomes, even if executed correctly.  Six hundred jobs are at stake. The CEO has called the team in to present their proposed solutions. There are two options the team has developed, with different probabilities in terms of jobs. The CEO looks at you directly and asks, “Which do you recommend?”

Stop new product innovation and focus on two base brands only Aggressively market the base but introduce two new untested products
200 jobs will be saved

-or-

A 33% probability that all jobs will be saved and therefore a 67% probability that the business will fail. No jobs remain.

Wow. Tough outcome, right?  Sometimes we in HR get called into situations like this to recommend how severance should be handled, or what kind of outplacement service makes the most sense.   But when you brought your brain to the table, you brought an obligation to weigh alternatives and are now being asked for your opinion. Be decisive and give an opinion. No other options, this is it.

But what if the choices were stated differently?

Stop new product innovation and focus on two base brands only Aggressively market the base but introduce two new untested products
400 of the 600 people will lose their jobs

-or-

A 33% probability that nobody will lose their jobs and a 67% probability that 600 people will be out of work.

You might expect that peoples’ choices would be consistent, but again they were not.  These two choice sets are identical, but when the first situation  is posed a larger percentage of people chose to stop innovation, a certainty of saving some jobs.  In the second situation, a larger percentage chose to take the gamble to save all jobs, because ending innovation is certain unemployment for 400 people. (Disclaimer: I am takings some liberties here. These scenarios were originally about choosing a course of action to save lives, and I have reworded them to save jobs. But the premise and the thinking processes would be consistent.)

Although these choices are logically inconsistent, they are understandable. We don’t mind uncertainty, but we don’t like to lose.

How did you process these two scenarios? Were you affected by the different wording? It’s hard to know for sure when you are presented the information in this way. But the point is not on what the right answer is. Are you prepared to make a decision, a difficult one, to truly help the business? Would you take the higher risk option only if you felt that the leadership was substantial enough to motivate the masses and make it happen? Would you be impacted if you thought you would be one of the two hundred remaining if you just pared down the company?

We’ll wrap this series up in my next post. No more tough questions though. Save your energy for the real-life challenges of your job.

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