This is part of a series of articles on Sustainability that will consider how a prudent decision-maker working in the built environment might improve his/her insights and capabilities. They will appear periodically and will contain both reflections, and guides to the use of basic analytical tools.
This episode considers some curious aspects of the people who will be making decisions.
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One of the major issues in working towards improved sustainability in the built environment and the processes that create and manage is that people are different and perceive and assess things differently. The route towards resolution of many matters is that various parties have to make some attempts to understand the positions others are taking. Working together to understand the reasons for the different positions will help to reduce levels of frustration.
Fortunately, the academic management disciplines continue to explore the myriad of complexities surrounding decision-making, ranging from the basics through to very complex concepts, and have been good at making them available to decision-makers in ‘the real world’ often through ‘popular’ management books. Of course, in keeping with the very special characteristics of real estate, modifications need to be made to utilise them efficiently and appropriately.
The reality is that many real estate-based decisions are made on the basis of experience, intuition, or back-of-envelope calculations (perhaps these are all the same thing); this is understandable due to the numerous decisions, large and small, that have to be made in any project, often with limited information, however, in some cases, this can lead to unexpected and undesirable outcomes. For example, it has been shown that the simplest numerical methods based on discounted cash flow analysis are often not employed mathematically, qualitatively, or even considered.
While a lack of quantified analysis might seem a shortcoming, explorations of learning and decision-making have offered explanations why this occurs. As in many areas of life, most decision processes are largely veiled, and rarely the result of explicitly plotting out alternatives, collecting data, and undertaking numerical analysis. In our own research[1], we found that experienced managers had some surprising capabilities, even though they were not aware of why – they just ‘knew’ what was an appropriate direction in which to proceed. That means that some acknowledgement and hopefully some understanding of how people become better intuitive decision-makers is in order.
Some management literature has explored the question about how people become expert decision-makers. Robert Quinn, of the University of Michigan, saw the development of an integration between “inquiry” and “action” as one becomes more competent in a field (Quinn, 1988, p.7)[2]. The model incorporates five stages. Many experienced architects and other decision-makers will immediately recognise the stages they have moved through during their own career development. The less experienced should reflect on how to move further along in the process.
1. Novice: This is the level at which people learn fundamental facts and rules, and, if they are making decisions, will tend to apply them in a rigid manner. Rules tend to be seen as absolute and almost sacred.
2. Advanced beginner: During this stage, basic patterns start to be recognized, leading to some understanding of factors and relationships that may be beyond the basic ‘rules’.
3. Competence: At this stage, people start to recognise the true complexity of tasks and distinguish larger sets of cues. They will tend to rely less on the fundamental rules, and be able to assess and take risks and make better trade-offs.
4. Proficiency: At this stage, unconscious processes start to dominate. A proficient decision-maker develops an ability to unconsciously assess situations, even when they are in flux. Quinn noted (pg.9) “Here is a holistic and intuitive grasp of the situation.”
5. Expert: For expert decision makers, explicit rules and definitive facts are of very diminished importance, and decision-makers tend to develop and employ a comprehensive understanding of the situation. They develop a multi-dimensional intuition of the field in which they are expert. In some ways it is like learning to ride a bicycle or drive a car, only it usually takes years to develop - one does not have to think about how it works; it becomes somehow instinctive.
Unfortunately, the higher-levels of decision-making may fail to develop for various reasons, including a lack of opportunities to gain enough experience, that some organisations do not encourage learning, the presence of organizational compartmentalisation, and/or an inability to observe outcomes. This last factor is important in the case of real-estate decision-making, as many outcomes appear only after many years – making them less obvious, often disconnected from the original decision-makers, and sometimes only the result of some unlikely sequence of events occurring.
While some people can be wonderful and discerning decision-makers, it takes time to become an expert decision-maker, and, indeed, how are we to identify them? Moreover, everyone is subject to decision-making biases: these have been well-described in the management literature, and include such things as an unwillingness to change, anchoring, paying attention to previously incurred costs, selective searches for supporting evidence, peer influence, and overconfidence, among others.
The result is that sustainability aspirations are more likely to be fulfilled if we use some rational and quantified decision-making tools. The wise real-estate practitioner or advisor always needs to augment and instruct their inner decision-making processes with additional experiences, insights, and conceptual and mathematical techniques to (a) improve ‘unconscious competencies’, (b) help in understanding when a more extensive quantified analysis is necessary, (c) understand how to perform some of the quantified analyses, and (d) work to overcome, manage, and integrate their inherent biases.
For an individual or corporation retaining an architect, engineer, or other professional, it is important to ask exactly what staff person will be responsible for their project, and expecting that it will be someone who is either an experienced decision-maker, or well on the way to becoming one.
[1] Ellingham, Ian and Fawcett, William, (2006) New Generation Whole-Life Costing, Property and Construction Decision-Making Under Uncertainty, London: Taylor & Francis.
[2] Quinn, Robert. E., (1988). Beyond rational management: Mastering the paradoxes and competing demands of high performance. Jossey-Bass.
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In the next section we will look at some of the basics of how buildings relate to sustainability concepts.