Decision Making / 1 / 1.5 / 1.5.8

1.5.8 Dynamic Environments—Misperceptions Of The Implications Of Feedback

Klein (1998) suggests that when decision makers are faced with a problem, they firstly invoke recognition to determine a problem is typical of something seen before. Then, through combining schemata recalled whether from long-term memory and cues from the current situation, they build mental simulations of strategies, that is, what they might do. Even though this is the primary means of making decisions under constrained time and when there is limited information, a growing number of researchers argue such methods are also used frequently for decisions where no such constraints apply. This can be problematic in dynamic situations, especially where cause and effect are not proximate, either temporally or spatially. Such is the case where dynamic feedback mechanisms exist. Before proceeding, it is necessary to explain the phenomenon of dynamic feedback.

Dynamic feedback describes the confounding effect of intended and unintended ‘knock-on’ consequences where the consequential impact returns to the point of initiation. We have all experienced the effects of dynamic feedback, whether through feeling, seeing, hearing or being part of a feedback process. A familiar example of dynamic feedback occurs when an announcer speaking into a microphone stands too close to, or in front of, the loudspeakers. The amplified sound from the loudspeakers is unintentionally fed back into the microphone and subsequently amplified further. The result is an ear-piercing screech or whistle of exponentially increasing volume.

To correct this, it is necessary to break the feedback loop by moving the microphone to a location where the input from the system’s output, that is, the loudspeakers, is effectively nil. Changing the feedback mechanism by sharply turning down the volume, thereby reducing the system’s gain, that is, the system’s amplification of the input signal will also help. It may be necessary to turn off the amplifier so that there is no amplification of the signal—that is one very effective way of breaking the feedback loop.

Whilst this is a familiar example of positive or reinforcing feedback, feedback can also be negative. The term ‘negative feedback’ describes a feedback loop incorporating an active balancing element, one which inhibits otherwise uncontrolled growth with that feedback loop. In many physical systems, as occurs in nature, socio-economic and socio-technical systems, reinforcing and balancing loops interact to produce self-adjusting, goal-seeking or self-stabilising dynamics. In these situations, the dynamic growth of reinforcing loops is constrained by interaction with balancing loops.

Research evidence is unequivocal: add the complication of dynamic feedback mechanisms to already complex problem situations, and we are in danger of seriously misunderstanding and mis-predicting dynamic systemic behaviour. Kleinmuntz (1985; 1993) warns that much of the research in the field of behavioural decision making has been undertaken in situations suffering one unfortunate limitation…

‘The tasks studied are almost exclusively static, discrete instances of judgement or choice. Decision researchers have overlooked the complex, time-dependent nature of many real decision environments, particularly the feedback structure linking previous decisions to changes in the decision environment (Hogarth, 1981)… Recently, (Broadbent and Aston, 1978; Dörner, 1980; Mackinnon and Wearing, 1985)… studies have begun to examine how this source of feedback influences the effectiveness of decision rules in dynamic tasks… a pattern seems to be emerging: Decision makers have exhibited systematic patterns of poor performance that suggest that they are insensitive to the implications of feedback in these dynamic environments (Kleinmuntz, 1993: 223).’

In an attempt to answer questions regarding how to go about managing systemic risks in dynamic environments, it is necessary to look at the most problematic aspects of decision making in those environments. Of particular interest are misperceptions that are associated with feedback, regardless of decision making being deliberate or intuitive. The important implication is not so much that managers and decision makers fail to see the relevant information and fail to develop ‘situation awareness’ (Klein, 1998: 33)…

‘… situation awareness can be formed rapidly, through intuitive matching of features [either in the actual environment or a model of it], or through mental simulation. Sometimes a situation reminds us of a previous event, and we try to use analogy to make sense of what is happening. At times there are several competing explanations and we may have to compare them. Usually we will scan each explanation to see if there are elements that do not seem plausible, so we can reject the less likely ones and keep the best (Klein, 1998: 90)…’

But, they are likely to fail to see the ramifications of feedback mechanisms. So mental simulation of options (as they appear one by one) is necessary, but not sufficient. We must augment mental simulation by structural analysis of cause-and-effect that will reveal the true systemic nature of the problem situation faced.