Mr. O’Halloran

Executive Leadership

Strategies for Decision Making

By Robert O’Halloran, Professor & Chair, Hospitality Management, East Carolina University

It can be argued that an individual is hired for his or her ability to make sound decisions. This applies most readily at the management level though decisions by staff members are happening all around us. However, there are no crystal balls and no one knows how a decision will turn out. Managers must consider the differences in the levels and or severity of problems. Decisions must consider the amount of control a manager has or could have over and in a situation. Having a model for decision making purposes may assist managers to quickly assess a situation and offer an optimal solution.

Make a Judgment

First and foremost is the defining of a problem. What is the actual problem or are we looking at symptoms of bigger issues? Managers can make quick fixes but is the fix the actual problem. For example, the number of employees calling in sick is increasing. Is this a problem, perhaps a health problem with the employees or is it symptomatic of something else, perhaps a less than positive work environment.

It is essential to define problems accurately in order to effectively make decisions. Once a problem is defined as a human resources, marketing, operations etc... then the consideration of what decision or decisions must be made. What is a decision? How are decisions made? Decisions are the answers to difficult problems and or situations. The ability to make a decision requires an individual to identify a problem, seeks facts create alternatives and then select one. Each decision impacts a set of resources that impacts an operation.

Arguably a hospitality operation’s manager makes more decisions in a typical day than any other business through interactions with staff, guests, vendors and others. Some are simple and repetitive and others are complex, dealing with personal and financial implications. Some decisions will take significant time to consider alternatives and others require an almost immediate response.

The issue is that managers do not always have control over a situation. To begin structuring the decision making process, decision can be divided into two categories. First, “Well Structured” problems are those that managers face regularly and typically can be solved in a similar manner. The situations are not always the same but arguably one preferred if not correct answer or method of dealing with the problem exists. In the simplest terms a math problem is a well structured problem. Multiplying two times two always equals four. The decision or answer is going to remain constant and therefore process or perhaps precedent is set to tackle similar problems.

Alternatively “Ill Structured” problems do not have one optimal or preferred answer. The solution or answers to an ill structured problem could differ depending on a variety of factors and who (person and/or title) is making the decision. Solving ill structured problems also focuses on control and a manager’s willingness to take a calculated risk. For example, a revenue management problem evaluates two competing groups for a booking in a hotel, the process and probably software looks at rates, roomnights, catering and other possible spending. A revenue management problem can calculate through math a preferred answer but a manager needs to evaluate the groups involved. Is one potential group a regular customer and therefore not selecting them may impact future business from them? These are some of the issues that must be evaluated to make a good decision. Two reasonable people can make two different but reasonable decisions with the same facts and in the same ituation.

Expertise

A manager also needs to ask him or herself what, if any, is their own level of expertise in the problem area and if they do not have any where will they get the needed input or expertise to make a decision? How does one become an expert and/or what expertise does a manger have? Job descriptions and specifications can indicate duties, responsibilities, skills and characteristics but education and training does not necessarily mean expertise in every situation a manager faces.

Decision making is often about thinking critically and not about expertise in a particular content area. Can managers learn and apply existing frameworks and/or models to make decisions? Thinking people, managers can. If a manager does not have the needed expertise for a situation they need to identify sources of expertise. These sources can be mentors, colleagues, consultants or other advisors. However, one needs to remember that all these advisors may not agree and offer differing opinions. The issue then is how much weight a manager places on the source of the needed expertise.

A wise man once asked what is fact; or what is truth? Is it something one believes or is it something that is an accepted truth that is beloved by all? For example, a question, how were the Great Pyramids of Giza constructed? There were no videos or tape recordings, no newspapers yet they are there and how did they get there? There are many theories including them being constructed by aliens, making this an ill structured problem. One could construct an answer and/or make a decision and their ability to justify that decision makes their decision believable or not. Another more industry related scenario; a hotel guest accuses a housekeeper of stealing something of value from their room. The guest complains to the manger and accuses the housekeeper. No one saw the item being taken nor knows if the item was ever brought to the hotel. The hotel manager listens to the complaint and must evaluate the guest’s accusation. The next step; what does the manager do? The guest is concerned and is sure they are right and the housekeeper when approached indicates that he or she does not know anything about the missing item. The manager needs to assess what if any evidence exists? What questions should a manager ask to frame the problem correctly? When was the article missing? Where was it seen last? Who had access to the article? Etc… The decision making process is like being a detective. Managers cannot make knee jerk decisions without facts and/or evidence. To terminate the employee without proper evidence would not only be wrong but potentially open the hotel to a suit for wrongful dismissal. The manager must do something, so he or she investigates and collects facts.

Evidence: what are the facts?

What are the facts or as a lawyer might describe what is the evidence? The issue is contextual given the situation. For example if the issue is one of food safety, hepatitis–A for example, the problem becomes a risk management issue for the business. An expert is a food safety professional, a person that has a food safety certification and the facts could be based on time and temperature and food handling. Evidence for decision making also can mean the use of the correct decision making tools. Managers have at their disposal reams of data and information internally and in the technology age that we live in have access to even more external data. Managers can be creators and developers of decision making tools. Mathematical indices such as occupancy, average daily rate and ultimately REVPAR can help a manager make decisions. Or they may create new indices to examine data more closely. All these can be the facts or the evidence needed to help make a decision and solve a problem.

Additionally, a manger’s longevity in their position can impact their expertise through increased and/or enhanced knowledge as well as improved and confident decision making skills. A manager that has made similar decisions previously has increased expertise in the decision making process. Therefore they become more confident and comfortable making difficult decisions. To summarize the decision making process the following framework is offered as a template for decision making.

Making Decisions

1) Identify the Issue:
a. Separate symptoms from problems.
b. Is it a well structured or ill structured problem?

2) Collect facts and evidence, document observations, and solicit in put from experts, peers and employees.
a. What are the actual facts?
1. Differentiate fact from opinion?
b. What expertise is needed?
1. Identify what role, if any, an individual's experience in the work place plays in the decision.
2. Weighing experience in similar situations.
c. Which decision-making tools are most needed?

3) Evaluate the evidence.
a. Ask the right questions.
b. Decide what criteria are being used to weigh the evidence.
c.Which pieces of evidence will you use to make your decision?

4) Make a decision and decide alternative results, collect new facts.
a. What are the possible outcomes?

5) Reach a conclusion (decision).

6) Monitor the results of the decision and the actual outcome.

Summary

Decision making is a messy business. Often things do not happen the way we expect and/or hope. The essence of decision making purposes is reflective thought. Managers with experience, education and direction are expected to make the tough decisions. Knowledge and experience with decision making tools and making actual decisions is at the core of sound management. This author argues that thinking managers will progress more quickly and assume more responsibility and become the leaders of our industry.

Professor O’Halloran is Chair of the Department of Hospitality Management at East Carolina University (ECU). He has operational experience as a general manager and as a training manager for Jolly Roger and Trans Pacific Restaurants. He has experience in the front office and food and beverage departments and worked as a hospitality management consultant. He is a Commissioner for AH&LA’s Certification Commission and was elected as Vice Chair. He is a member of the Board of Trustees of the AH&LEF. He is also a member of the Educational Institute of AH&LA Faculty Advisory Board. Mr. O’Halloran can be contacted at 252-737-1604 or ohalloranr@ecu.edu Extended Bio...

HotelExecutive.com retains the copyright to the articles published in the Hotel Business Review. Articles cannot be republished without prior written consent by HotelExecutive.com.