The following are the questions and answers submitted on a recent podcast I did for Vibrant Publishers on my book Decision Making Essentials.
Welcome to the Vibrant publisher’s podcast, where we interview experts in various fields to share their insights and knowledge with our listeners. Today we are joined by Mark Koscinski who is an esteemed author of Vibrant Publishers. Mark is an Advisory board member of our publishing house and is the author the book Decision Making Essentials by Vibrant Publishers
Mark Koscinski is an assistant professor of accounting practice at Moravian College in Bethlehem, PA, where he teaches a graduate level Decision Analysis class and several advanced accounting classes. He is a certified public accountant, and holds a BA with high honors and MBA from Rutgers University and a doctorate from Drew University. Prior to joining the faculty at Moravian College, Mark was a chief financial officer of various public and private organizations in the defense contracting, toy, investment banking, and banking industries. He has over forty years of experience in the business world, and has supervised every operation of an organization including sales and marketing. Mark is passionate about sharing his knowledge with his students. His background and experience gives him a unique position to write on management topics that are easy to understand for non-MBA graduates.
Mark, welcome to our podcast, and thank you for joining us today!
A: It is a pleasure to be here today!
Q1 I would like to begin by understanding how you developed an interest in Decision analysis and can you share the story behind your passion for these areas?
A1; I am a Certified Public Accountant. As a young accountant I placed a great deal of emphasis on financial analysis. I quickly noticed decision makers often did not follow what financial analysis said they should do. Over time, I realized there were several reasons why this happens: (1) cognitive limitations often prevent decision makers from making the optimal decision. For instance, the decision maker could just simply be fatigued; (2) many decisions involve not only quantitative factors but also quantitative factors; and (3) many decisions involve risk and uncertainty and decision makers are often not equipped to deal with that. Decision analysis gives decision makers tools to deal with these issues and to bridge these gaps. I realized mastering these tools were essential to my career and of course to running a successful business.
Q2: How important is data and information in the decision-making process? What role does it play, and how can individuals or organizations ensure they have accurate and relevant data?
A2: Professor Ryan Hamilton of Emory University likes to compare decision making to a manufacturing operation. He says there are three components to the manufacturing process: the input, the manufacturing process, and the control panel for the process. Data and information is the input into the decision making process. Professor Hamilton calls information the raw material of the decision making process. Naturally, you need to look at the accuracy and relevance of the data. I prefer to call that a data quality challenge. A universal problem decision makers have to deal with is how to weigh the quality of information versus its quantity. For instance, how much should we change our minds based on a large quantity of data that we may not think is entirely reliable. Decision analysis helps deal with those situations in a structured way.
Q3 Decision making often involves a certain degree of risk. How can individuals or organizations effectively evaluate and manage risks when making decisions?
A3: I think you need to remember the distinction between risk and uncertainty. Risk can be measured through the use of probability and statistics. It can be dealt with. Uncertainty is much harder to deal with. Think about the Black Swan events popularized by Nassim Taleb. Uncertain events can’t be predicted. There are tools available to handle both though. For instance, decision trees, fault trees, event trees all use probability to handle risk. A tool used to manage uncertainty is scenario planning.
Q4 In your experience, what are some common challenges faced by organizations when it comes to decision making and how can these challenges be addressed?
A4: I believe the biggest problem decision makers face in organizations is the failure of small groups to come to correct decisions. Groups have a dynamic of their own and are often prone to groupthink. Think of the failure of the team that managed the Challenger space shuttle. We all know what happened there. A more mundane example of this problem is exemplified by how juries work. Understanding group decision making and how groups function is critical to good decision making.
Q5 If you were a mentor to a group of young professionals, what unique challenge or experiment would you assign them to enhance their decision-making skills?
A5: My favorite challenge to my students is the famous Lifeboat problem. It is an exercise in seeing how important the framing of the question is. I begin by saying there are ten people in a lifeboat that can only hold six people. I describe the people and say who will live and who will die. You make the decision. The students unanimously agree to throw the older college professor–me–overboard to become sharkbait. I framed the question by suggesting the four people had to die. No one comes up with the idea of taking turns in the water and possibly allowing many people to live.
Q6 Would you agree that decision making is a dynamic field that constantly evolves? If so, How do you stay motivated and engaged in keeping up with the latest developments and advancements in these areas?
A6: It is absolutely an evolving field. If you were to pick up a Decision Analysis textbook from 20 or 30 years ago you would see the influence that Behavioral Economics and finance had on the field. The earlier books tended to regard decision makers as being completely rational. Some Nobel Prize winners had a lot to say about that though. We are not purely economic decision makers as classical economists would have you believe. I point you to the work of Kahneman, Thaler, and Shiller as demonstrations of that.
Q7 In your book, you have talked about the concept of two cognitive systems, System 1 and System 2 introduced by Dr. Daniel Kanheman. Could you explain these systems and how they impact our thought processes and judgments?
A7. System 1: Fast. Intuitive. A marvelous decision making process but needs to be put in check when a complicated problem is being addressed.
System 2: Energy hog. Heavy cognitive processes. Lazy. The heavy machinery of the decision making machinery.
If you are talking to a decision maker about a major problem you need to make sure her system 2 is functioning. Otherwise, she may change her mind later or perhaps not even remember the conversation at all.
Q8. Decision making can sometimes be influenced by cognitive biases. How can individuals become aware of and mitigate the impact of biases in their decision-making processes?
A8: You must engage System 2 to combat biases.. Biases are the province of System 1. System 2 can train system 1 but that is a longer process.
Q9 In your experience, what are the key qualities or characteristics that separate good decision makers from great ones? Are there any specific traits or skills that you believe are essential for success in decision making
A9: (1) Knowing when to make a decision. We have a predilection for action. Daniel Kahneman believes that if we just train ourselves to wait until we need to make a decision better information may be available.
(2) Knowing when to engage System 2. World class chess players will expend an amazing amount of calories during a match. They know when to begin calculating and engage System 2. System 2 is a resource hog. It can wear you down pretty quickly. .
(3) Self care. Being rested. Knowing when to rest and take a break. Try to handle work in chunks. As Professor Hamilton notes, changing mindsets is a cognitive drain.
Q10 Are there any emerging trends or technologies in the field of decision making and analysis that you find particularly interesting or promising? How do you think they will shape the future of decision making?
A10: I am most interested in the use of AI as expert systems. There are still a lot of things AI can’t handle, such as moral decisions though. Think about the problem with self-driving cars. Blockchain–self executing contracts are also fascinating fields.
Now I would like to know about your experience as a first time author-
Q11 What advice would you give to new authors especially when it comes to setting a writing routine and staying motivated throughout the writing process?
A11: I would love to give you some advice on this but I waffle on this. I would go back and forth from targeting one page per day to writing in “chunks”. I think an author needs to adapt her routine to her own personal schedule, circumstances, and biorhythms.
Q12 Research is often a critical component of writing, even in fiction. What advice do you have for authors in conducting effective research to enhance the authenticity and credibility of their work?
A12: Become best friends with the reference librarian at your university. Be careful about your sources. Also, become familiar with the style manual–whether it is APA, Chicago, Turbanian. It will save you so much time later on. There is nothing so painful as having to go back and put your paper into proper form at the very end. It is easier to train yourself to do that as you go along.
Mark Koscinski CPA D.Litt. 