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The following is a conversation between Cheryl Strauss Einhorn, Founder of CSE Consulting and Author of the book, Problem Solved: A Powerful System for Making Complex Decisions with Confidence and Conviction, and Denver Frederick, Host of The Business of Giving on AM 970 The Answer.
Denver: If someone were to ask you what your decision-making process was when addressing a big problem or facing an important decision, what would you say? Well, for many of us, the answer would be pretty imprecise, a little circumstantial, and far from rigorous. In fact, we might come to the realization that there isn’t much of a system at all.
That observation was not lost on my next guest. So she set out to do something about it, and the result was her new book, Problem Solved: A Powerful System for Making Complex Decisions with Confidence and Conviction. She is an award-winning journalist, media consultant and adjunct professor at Columbia University. She is Cheryl Strauss Einhorn. Good evening, Cheryl, and welcome to The Business of Giving!
Cheryl: So happy to be here. Thank you!
Denver: Well, you have certainly identified a significant need that exists out there, but what gave you the impetus to develop a system and then write a book about it?
Cheryl: Well, really it was such an unexpected journey. My background is in investigative journalism, and I spent a decade working as an editor and columnist for Barron’s, the business magazine. At Barron’s, I sort of ended up specializing in what you might call the “bearish company story” – those stories that take a skeptical look at a company’s finances or at their strategy. When these stories would come out, a lot of time, there’d be a big reaction – not only would the share price fall a lot, but regulators could get involved, and sometimes these kinds of stories really had a very big impact. And I started to feel a little bit uncomfortable about the fact that it wasn’t just impacting somebody’s retirement account or their portfolio, but actually their ability to go to work or to buy the products and services from those types of companies.
And so I started to really think about: Is there a way that I could have better confidence and conviction in my own decision-making? And also, Could I better understand the incentives and the motives of the sources who often gave me those stories? And right about the same time, all this new research was coming out saying that we’re all flawed thinkers. We have these assumptions, biases and judgments. They certainly help us every day, so that when we’re in the supermarket, for instance, we’re not overwhelmed by the sheer number of choices in the cereal aisle. But those same well-worn pathways, those shortcuts, they don’t go away when we’re solving for complex problems.
And so given my background in research, I started to think about: Could there be a way where I could apply a process that acknowledges that we really can’t say we’re going to be objective… and just be objective, but that instead recognizes maybe I should go all in on my mental flaws? And could I construct a process that works within the fact that we have these biases, assumptions and judgments, and be able to better understand how to solve problems more holistically… by also accounting for the incentives and motives of others?
Denver: And then you throw in an emergency appendectomy in the process and say, “I think I have the time!”
Cheryl: That’s exactly right! I was getting down after I had an emergency appendectomy, and I was thinking to myself: I really need a good project. So I had already written up my AREA Method, which is what Problem Solved introduces into a textbook to use at Columbia Business School –and also at the Columbia Graduate School of Journalism– and I thought: You know what? I have so many friends asking me: What do I do about my aging parents and helping them find the right housing accommodations? Or, my son’s about to start the college journey, or I want to switch careers; I want to re-enter the workforce…and when I looked on Amazon to see what’s out there for you and me…
Cheryl: That’s exactly what I realized, and I thought I’ll rewrite the textbook into a general interest book because we all deserve the ability to have a system that can uniquely help us to solve high-stakes decisions for ourselves.
…we’re very inconsistent decision-makers. If we’re faced with the same decision, but we’re in two completely different situations–either environmentally, or socially with different people– we may make entirely different decisions.
Denver: Make it accessible to everybody with this kind of a book. How do most of us go about making our decisions? Is there a typical pattern that we generally fall into?
Cheryl: Well, I think that’s a very interesting question. I think the best that I could answer that is that we’re very inconsistent decision-makers. If we’re faced with the same decision, but we’re in two completely different situations–either environmentally, or socially with different people– we may make entirely different decisions.
So I think that what I was looking for here is: Could there be a way where we wouldn’t just rely on who we’re with, or where we are, or the well-worn pathways that have served us well when we make small decisions? Is there a way that we could actually pry open cognitive space to allow for new information and new insight, which is what we really need when solving for complex problems?
The AREA Method inverts traditional decision-making… instead of saying: What problem do you want to solve? AREA inverts it to ask what I think is a far more empowering question, which is: What constitutes a good outcome to you uniquely?
Denver: Well, before we get into the steps of the AREA Method, tell us if there is an overarching philosophical view that kind of undergirds this approach?
Cheryl: The AREA Method inverts traditional decision-making. I find for myself– and I found with many people that I work with– that when you’re faced with a complex problem, that’s uncomfortable. It’s a little scary to think about, “Okay, I’ve really got to take on something big here, and it could have a very long-term outcome on my life; the outcome is unknown, and the price for getting it wrong could be very costly. So instead of saying: What problem do you want to solve? AREA inverts it to ask what I think is a far more empowering question, which is: What constitutes a good outcome to you uniquely?
Most people are able to know what they want out of the decision, what constitutes success for them. So now, you’ve got your picture of success clearly in mind, and you can identify what I call your “critical concepts,” which are the one, two or three things that really help you achieve that picture of success. Now, you’re not looking at an open-ended research project, which could be unproductive or unfulfilling. Instead, you are deeply and creatively investigating only those few factors that will help you tell the story of what constitutes success for you uniquely.
Denver: That makes an awful lot of sense. So often we find out that we’re working on the wrong problem! So knowing where you want to go, and starting there, can help redefine that problem to a much better route to follow.
Well, let’s get into the AREA Method where each letter stands for one step in the process. A stands for Absolute. Now, explain to us what we would do here.
Cheryl: The AREA Method is a perspective-taking process, and each of the letters gives you one of the perspectives that you inhabit in a logical progression until you’re ready to put the pieces back together. The reason why I used perspective-taking is because by inhabiting the perspectives of those stakeholders involved in your decision, you get a two-for-one. You better understand the incentives and motives of the stakeholders involved in your decision, and it mirrors back: How do you think and feel, which helps to bubble up your assumptions, biases and judgments.
So, Absolute information is information from the target of your decision. If, let’s say, you’re making a college choice…so let’s say you’re looking at Johns Hopkins and Pitt. The choices are binary, so your absolute targets would be Pitt and Hopkins. If, let’s say, you’re thinking about growth opportunities from your business, it would be whatever those number of growth opportunities are. If you’re thinking about solving for the right housing accommodation for your aging parents, it would be those living facilities—it could be five, six, or seven even—that you’re initially looking at that you think might be the right accommodations.
Denver: So it’s really quantifiable data that exists without question is the absolute information. Well, it would only stand to reason then, that R is going to be for relative. How is this information going to differ from the absolute information?
Cheryl: So if you think of AREA as a series of concentric circles with the absolute at the center of the decision – the targets that you’re thinking about – the Relative phase is the next concentric circle of information. It is sources somehow connected to the target of your decision.
Coming back to the college decision, after you had evaluated specifically the websites, for instance, of Pitt and Hopkins, relative sources might be sources like Rate My Professor to read about the professors there, or College Confidential to hear what the students have to say about the experience. Or sources like a literature review, say U.S. News & World Report, to look at the rankings related to the colleges. So those are examples of sources that would be Relative.
Denver: Like going to the opinion page of a newspaper and getting people’s take on this and their perspective on it.
Cheryl: And what you’ve already done is you’ve added on a layer of bias. Instead of in the absolute target– hearing from those targets themselves: how do they talk about their organizations and their opportunities, you’re now getting it filtered through one layer removed from that.
Denver: How do you safeguard not going to relative sources that reflect your own bias?
Cheryl: I think that’s a very good question. One of the things that I talk about in the next phase, in the E phase, is finding somebody who knows you as a decision-maker and can help you have a little bit of a check and balance, so that you wouldn’t just be falling into the same types of patterns and thought processes that you’ve always used.
Denver: Well, getting to the next phase, it’s sort of like somebody who has a very wide foot. They go for a double E shoe, right? Would that be correct? Well, you have two Es here. You have Exploration and Exploitation. Start with Exploration.
Cheryl: So the Es I consider the twin engines of creativity. Exploration is about getting beyond document-based sources to actually identify people who may be able to help you better understand the problem that you’re solving. And that chapter and that part of the process looks at identifying good prospects– those people who could have the information– and then also: how to develop great questions.
You’re not asking somebody a question to ask them a question. What you really want to think about is: What kinds of answers do I really need? What kinds of answers are actionable?
Denver: And that equals interview quality! Well, let’s take the latter there. How do you develop good questions? And what kind of things should you be asking?
Cheryl: So again, I really like this idea of inversion. You’re not asking somebody a question to ask them a question. What you really want to think about is: What kinds of answers do I really need? What kinds of answers are actionable? So, again, you’ve turned the problem upside down, and now you are thinking about crafting questions that will give you the information that you haven’t been able to get from the document-based sources… or that you need more nuance or context related to.
And I take you through in the Exploration chapter the different types of questions that are out there – behavior questions, opinion questions, knowledge questions, and so on – so that you really can better understand how to ask the right questions to the right people.
Denver: And after you’ve done that, we go to the second E, which is Exploitation.
Cheryl: So if exploration is the part of creativity that is about breadth of information, exploitation is about depth. And what I do there is I say, “Okay, now, let’s turn our lens specifically inward on ourselves as decision-makers, and let’s see if we can test out our evidence against our assumptions.”
In that chapter, I have put together a series of exercises that I’ve learned from other disciplines such as journalism and medicine and the intelligence community where we can really line up our evidence against our assumptions …so that we can understand that the most likely hypothesis is not the one with the most confirming data; it’s actually the one with the least disconfirming data.
Denver: That’s an interesting distinction.
Cheryl: So if you have a lot of confirming data for a hypothesis, but you have one insurmountable hurdle, that hypothesis is not going to prove true. So being able to assess the information and figure out what has the least disconfirming data can really save you a lot of heartburn, and it can help you make your mistakes before you make them.
…a lot of times, people are a little resistant to try to portray their facts pictorially. But the minute you do that, not only have you organized your data in a way that you can assess it in one place together, but I almost always find that people have a real “Aha!” moment.
Denver: That’s so important. And one of the exercises here is visual mapping?
Cheryl: Absolutely! So this is an exercise that I really like. Obviously from the two different hemispheres of our brain, so much of the way that we think about things is visually, and we even have it come in to the way that we talk about things – do you get the picture, for instance. And I found with my students at Columbia and my consulting clients that a lot of times, people are a little resistant to try to portray their facts pictorially. But the minute you do that, not only have you organized your data in a way that you can assess it in one place together, but I almost always find that people have a real “Aha!” moment. The discipline of taking your information to either display it as a chart or a graphic… or even a cartoon in some way, helps you to gain a different perspective and understanding of your information and of your evidence.
Denver: So I’ve gotten the Absolute information; then I’ve gotten some subjective information through that Relative process that I’ve gone through. I’ve spoken to other people through my Exploration, and then I kind of looked at the mirror inside at Exploitation…which takes us to the second A, the final step, and that is Analysis. What’s important to keep in mind here?
Cheryl: In the Analysis phase, you’re really beginning to put all of the different pieces together. You’re thinking about solvability, and you’re also thinking about: where might I have come to the wrong conclusion before I come to conviction? And I suggest that people do a pre-mortem, which I think is a very valuable exercise. The post-mortem is something we think of doctors using… where everybody benefits except for the patient. So here the construct is very similar. You’re basically imagining that the decision failed, and now you’re telling the story of that failure so that you can think about how it failed, and you can try to set up some safeguards to prevent the decision from failing that way.
I often find that even once you’ve gone through a comprehensive and thoughtful due diligence process, this step is really critical because at times, you may need to go back into earlier parts of the process. Not all investigations are linear, nor should they be. You need to have the opportunity to have a feedback loop to either collect more information or at times to do more analysis. The pre-mortem really sits you down and asks you to think critically about what could go wrong that maybe you haven’t examined, and then try to prevent your decision from failing that way.
The cheetah’s prodigious hunting skill is not its ability to accelerate like a race car; it’s actually its ability to decelerate by up to nine miles an hour in a single stride….and that, in hunting, is far more powerful than accelerating like a race car because it builds in agility, flexibility, and maneuverability – all the things that you need in a quality research and decision-making framework.
Denver: I really like that step – Analysis. I think being your own devil’s advocate can really pay huge dividends.
You recommend, Cheryl, that going through this AREA Method that people keep a journal. Now, what would be the benefit of that?
Cheryl: I have found, and I think many times you read about the benefits of journaling, that it keeps you from having evolving hypotheses, which is when we try to tell ourselves different stories at different times.
I think the other reason why a journal is so valuable is that throughout the book, I have what I call “cheetah pauses,” and these pauses are built in so that we have strategic stops to our work. In today’s technology-driven era, we find ourselves oftentimes answering urgent e-mails or texts late at night. The speed of technology and life today seems to be asking us to make decisions more quickly. But when we’re solving for an important and uncertain future of our own, we deserve time and attention.
So every time I recommend a strategic stop in the process, I have a cheetah sheet. I call them the graphic organizers of the AREA Method. Why the cheetah? The cheetah’s prodigious hunting skill is not its ability to accelerate like a race car; it’s actually its ability to decelerate by up to nine miles an hour in a single stride.
Denver: That’s amazing!
Cheryl: And that, in hunting, is far more powerful than accelerating like a race car because it builds in agility, flexibility, and maneuverability – all the things that you need in a quality research and decision-making framework.
So every time I have a cheetah sheet, I’m still holding your hand through the process, and I’m recommending: Here’s where you can look for sources of information. Or, Here’s the kind of analysis that you might want to be doing at this point…so that what you’re collecting in your journal is not only your work and your thinking, but you are also beginning to build the book of you as a decision-maker.
And so the more that you use it, the more you can learn about how you make decisions, when you are inconsistent, what kind of cognitive biases tend to have the most impact on you. And by building up that awareness, you can actually really begin to pry open this cognitive space that I was talking about… so that you can try to rely less on assumption and judgment and have a better opportunity to make decisions that really work for you.
I think part of the problem with making decisions quickly is that, as I said, then we have to be on this default mechanism that works for us every day for the small decisions that we need to make, but it doesn’t really allow us to spot new information or to gain new insight.
Denver: Continuous improvement, that’s the name of the game.
Let me ask you a little more about that because we’re living in this world where speed is now becoming, let’s say, more important in people’s minds than quality. And I don’t know whether this has come from sort of that prototypical thinking out in Silicon Valley. It is: Make decisions quickly, and get it out there; then get some feedback, and iterate and pivot. What are your thoughts about this? And what are some of the downsides of approaching decisions in that way?
Cheryl: I think part of the problem with making decisions quickly is that, as I said, then we have to be relying on this default mechanism that works for us every day for the small decisions that we need to make, but it doesn’t really allow us to spot new information or to gain new insight.
Essentially, what the Area Method does is: there’s four updates to the research in pedagogy. First, it says that research is fundamental to decision-making, and yet there are no books out there that guide you on the research process to help you make a decision at the end of it. In fact, the current books that are out there on decision-making basically lump: explore all your options as one single step. And I don’t think that that is very valuable because you can’t really evaluate them, and you don’t want, again, all optionality. You want only those critical concepts that will help you uniquely solve for what constitutes success for you. You can’t really do that if you are in a rush.
The second thing is that by slowing down, you’re also taking into account, as we’ve talked about, the mental myopia – these biases, assumptions and judgments. The third thing are these cheetah pauses that I talked about, these strategic stops that allow us to chunk our learning and to gain new information and insight. And then the fourth part is this idea of the feedback loop that we discussed.
So while I do think that it’s important that you identify what constitutes a good outcome for you, and you do come up with your initial critical concepts, this idea of prototyping still is important. Because as you’re going through the AREA Method, you are going to be refining and iterating those critical concepts, so that you are continually trying to identify what you really need to understand to solve for the successful outcome that you’ve identified.
By better walking in somebody else’s shoes and understanding their incentives and motives when evaluating opportunities, you’re able to engage with them with more empathy, and you’re able to solve problems more holistically. And that enables you to have an outcome that has a better chance of succeeding.
Denver: Can this system work as well for teams and organizations, specifically nonprofit organizations, as well as it does for individuals who are faced with the decision?
Cheryl: Absolutely! One of the main stories that the book tells– and the book tells four stories– is of the ODA Foundation, which is a basic healthcare charity that is located in Nepal. The founder of the ODA Foundation came to me just days before the devastating earthquake killed 10,000 people there. All of a sudden, he realized that he needed a plan yesterday. He was going to have this very unique opportunity where for a moment in time, the world’s health care charities were going to be landing on the tarmac in Katmandu, and he was going to have one chance to basically say “Vertically integrate to me. I’m already here on the ground with my organization.” And so he needed a plan and a way to tell these organizations why he thought it would be successful.
The reason why I think AREA works so nicely for individuals as well as for organizations is, again, this idea of perspective-taking. By better walking in somebody else’s shoes and understanding their incentives and motives when evaluating opportunities, you’re able to engage with them with more empathy, and you’re able to solve problems more holistically. And that enables you to have an outcome that has a better chance of succeeding.
Denver: Have you been able to gather any data, Cheryl, or do you plan to do so, that demonstrates the AREA Method leads to better decisions than, let’s say, against a control group?
Cheryl: Wiith my students at Columbia, we usually do an evaluation before they start the methodology… and then where they’ve come out at the end… and how they feel about their confidence to engage with complex problems, their confidence to engage with research and due diligence, their confidence to be able to have constructive conversations with other people and to understand those incentives and motives.
And then I’ve also recently put up on my website, which is areamethod.com, an app called Problem Solved that helps people to understand their problem-solver profile, which is: What kind of a decision-making archetype do they follow? And through this series of questions that I have built in there, some of them really get at: What is the individual’s confidence and conviction in their ability to solve complex problems before having looked at and used the AREA Method. The app also has just a rudimentary version 1.0 of the AREA Method and asks similar evaluation questions at the end.
So I’m really trying to be able to better understand not only how it helps people build confidence and conviction in their decision-making, but also very much how it makes them feel about their awareness to cognitive bias, and their ability to be able to try to control for and counteract bias, which is really what the AREA Method is set up to do.
Denver: What about your gut? You always hear people say, “I’m going with my gut.” Is there a place for that in your approach?
Cheryl: I do think that there is a place for it in our lives. Some decisions really should not be solved in a rational way. Some decisions, and actually some of the most important in our life, are really about a leap of faith… let’s say getting married, for instance. That should be about a leap of faith because it’s not inherently rational, right?
Cheryl: But when it comes to thinking about complex problems, a lot of times, you don’t want to rely on your gut. You do want to understand what is your gut telling you, but then you want it to be checked. And that again is this idea of controlling for and counteracting cognitive bias. And there is no other system besides the AREA Method that is laser-focused on being able to do that.
Denver: Let me close with this, Cheryl, …which is actually at the very beginning of the book…and that is I noticed that Tony Blair wrote the foreword to Problem Solved. That’s quite a coup! Congratulations! How did it come about? And what did he have to say?
Cheryl: Well, thank you very much! This also was very unexpected. I originally met Tony Blair through his Faith Foundation, which tries to help bring together people of different faiths to better understand each other.
A couple of years ago, when I finished writing Problem Solved, he asked what was new with me—because we usually talk about him—and I mentioned that I had just re-written my textbook into a book for you and me. And he said, “Oh, what’s it about?” And I said, “It’s about solving complex problems,” and we had a good laugh because he said, “Cheryl, I know a little something about that.” So he said, “Why don’t you send it to me?” I didn’t really think much of it, and I sent it to him. And a couple of weeks later, he called me. He told me he loved it, that he was sorry that he didn’t have it when he was Prime Minister.
He said that having a system to solve complex problems…you need it the way that you need to take vitamins or get shots when you’re a kid. You need it before you know that you need it. So that when you’re faced with a high stakes moment, you already have your operating system. You already know how to think through: what’s my decision-making system. And so he offered to write the foreword to the book, and I’ve been very grateful for that. And it’s an incredibly generous and thoughtful foreword that he wrote.
Denver: It certainly is, and it certainly has become your operating system. Well, Cheryl Strauss Einhorn, the author of Problem Solved: A Powerful System for Making Complex Decisions with Confidence and Conviction, thanks so much for being here this evening. If people want to learn more about the AREA Method and this book, where can they go to get that information?
Cheryl: I would love that. Please come visit my website. It’s areamethod.com. On there, I have research and articles that support pieces of the AREA Method, and I have reviews of the book. I have this web-based app that can help you learn about yourself as a decision-maker and that you have a way to reach out to me as well.
Denver: Great! All so interesting. Well, thanks very much, Cheryl. It was great to have you on the program!
Cheryl: Thank you so much!
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