By: Bryce G. Hoffman, Ann Arbor News
Tuesday, November 09, 2004


According to J. Frank Yates, life is a series of decisions. His aim is to help people make better ones - particularly in the arena of business.

Yates is the director of the Judgment and Decision Laboratory in the University of Michigan's Department of Psychology. He is also a professor of business administration in U-M's Ross School of Business.

"I was always interested in how people figured out stuff - just looking at the dumb decisions people make in life," Yates said.

Particularly on the streets of Memphis.

Growing up, Yates said he was struck by the violence he saw there, particularly domestic violence. One question stuck with him, even after he left for the ivy-covered walls of Ann Arbor: Why do women stay with abusers?

"I look at it through the decision-making lens," he said.

Yates wanted to understand the process so that he could help people make better decisions. Over time, his interest shifted from individuals to institutions - from battered women to corporations battered by the consequences of their own bad decisions.

"They don't think about the decisions that got them in the mess in the first place," Yates said. Instead, most organizations focus on managing the consequences of their bad decisions.

Yates is trying to change that - one MBA student at a time. His goal is to get them to "think deeply" about the business decisions they and their colleagues make in their organizations.

By way of example, Yates uses the analogy of airline crashes.

After every air disaster, there is an intensive and exhaustive analysis of what went wrong and what led to it going wrong. He said companies large and small should conduct the same sort of post-traumatic review after their own business disasters.

"Invariably, there are going to be decisions in that chain of events that contributed to that incident occurring," Yates explained. "You don't really focus on the decisions per se. Instead, you focus on what went on in the process that is implicated in these incidents."

Consider the Edsel, one of Yates' favorite real-world examples.

"There were lots of decision in that particular case that led to the launching of that particular car which was disastrous for Ford," he said. "They really got burned."

First there was the issue of the name, which did little to wow potential buyers. Then there was the design of the grill, which many people thought resembled a horse collar. Finally, there was the marketing plan, which called for the creation of a new network of dealerships that would sell only the Edsel.

While the recession of 1958 did not help matters, Yates believes there were many things that Ford Motor Co. could have done to mitigate the impact of the economic downturn and turn the ill-fated Edsel into a success.

Take the name itself. Yates said Ford actually spent a lot of money trying to come up with a good name for the new brand, but decided to ignore its own market research.

"Nobody was really thrilled about the name 'Edsel,"' Yates said. "The decision on the name was, ultimately, arbitrary."

The sort of evaluation he advocates might have led Ford to take its market research more seriously in the future, he said, which it in fact did.

"People tend not to want to dwell on failures," Yates said. "They're perhaps rightly fearful of blame."

While he said it is natural to try to assign blame for failures, Yates also believes it can be counterproductive. He advocates focusing on ways to avoid making the same mistake again.

"You aren't trying to blame anybody," Yates explained. "(Often) what a particular individual did was largely dictated by the particular circumstances into which that individual was plugged."

Most of Yates' students are in the school's evening MBA program, which means that most are already working full-time and already have some decision-making authority in their companies. He finds that most of his students have not given much thought to decision-making, a symptom of what he sees as the "decision neglect" that has become so pervasive in our society.

"People tend not to attribute as much as they should to the decisions they make," Yates said. In part, that is because the consequences of a decision often occur much later.

However, he said his students quickly come to appreciate the importance of decision-making in their own lives - and in the lives of the companies they work for.

"We spend a good deal of time talking about actual incidents," Yates said. "I make real good use of (The News)."

He also assigns field projects, challenging students to actually change the way decisions are made in their own organizations. But he is realistic.

"I ask them to start small," Yates said. "You're not going to change a whole organization."

Yates' own decisions have yielded a life that is closely intertwined with that of the university he has called home for more than three decades.

He first came to Ann Arbor as a student in the turbulent 1960s. A leader of the black student movement on campus, Yates helped establish what is now the university's Center for Afro-American and African Studies - and went on to become its first director. He also helped create a learning skills program that evolved into the college's Comprehensive Studies Program.

Ultimately, Yates joined the faculty in the Department of Psychology and, in the late 1990s, became a professor of business administration. He now splits his time between the two, teaching and studying the process of decision-making.

That process also has major implications for the field of marketing, Yates said, and studying how consumers make - or do not make - decisions is another relatively new focus of his research.

Building on the work of two Columbia University researchers, Yates said retailers spend more money selling products to indecisive customers and less money selling to decisive customers. Indecisive customers take up more of salespeople's time and are also more likely to return the products they buy.

"How do you understand indecisiveness? Where does it come from? How do you deal with indecisive customers?" Yates said, outlining the key questions behind his research. "One area that we've focused on is the culture side."

Yates and his team have spent 15 years analyzing the decision-making values of Americans, Chinese and Japanese. He said Japanese are the least decisive of the three cultural groups, valuing well-thought-out decisions. Americans and Chinese, on the other hand, admire people who can make quick decisions.

"Americans tend to think of decisiveness as a virtue, whereas Japanese see it as fault," Yates said. "The Japanese tended to admire people who, in this culture, might seem indecisive."

Yates said Americans' admiration for decisiveness was apparent in the outcome of the recent presidential election, where the majority of voters supported incumbent George W. Bush - a man criticized by some for being too decisive and unwilling to reconsider his decisions once made - over Sen. John Kerry, a politician characterized by opponents as an indecisive "waffler."

---

Bryce G. Hoffman can be reached at bhoffman@annarbornews.com or at (734) 994-6932.

The Ann Arbor News Website