Systematic Decision Making Steps

Focus on Important things

Use Analytical Decision thinking when possible and intuitive thinking when necessary

 

1. Problem Definition (PD articulation)

-Articulate the Decision Problem in many different ways.
-Start by writing it down – question it, test it, hone it – reword it.
-Use Divergent/Convergent thinking
-Redefine problems as opportunities.

-Definition should be wide. (Question the constraints & establish workable scope)
-Every decision problem has a trigger, Identify the trigger. Ask why I am facing this problem?
-Get rid of assumptions
-Don’t think about solutions during DP articulation
–Understand the stakeholders and the members of the value chain and their Biases
–Understand your own Biases
-Ask others – get a fresh/outside perspective
-Be Creative

2. Specify  Objectives

Objectives are Decision Criteria used to assess alternatives / course(s) of action

What we are trying to accomplish

What do we really want/need

Objectives are the bases for evaluating alternatives

Objectives are usually to Maximize or Minimize

People spend too little time on setting objectives and take a narrow view of what the objectives are

Use Divergent/Convergent thinking

Write down all concerns/hopes for making the decision

Convert concerns into objectives (e.g.. Maximize XX, minimize XX, (verb and object)

3. Identifying alternatives

Use Divergent thinking and brain storming; be imaginative.

Your decision Cannot be better than your best alternative

Question alternatives asking are these alternatives what we really want?
Is there a better choice?

Use the power of the group

You can never chose an alternative you do not consider
Your decision is never better then your best alternative
Don’t box yourself in statusquo and saticficing

Look at your objectives and ask HOW
Challenge constraints – most of them are mental rather then real barriers
Break free of tradition
Set high aspirations
Get additional perspectives
Never stop looking – in the other stages.
BUT Know when to quit looking

Types of Alternatives:

Process alternatives
Win-win
Information Gathering
Time-buying Alternatives

4-Determine the measurable attributes of alternatives or courses of action

Understand the consequences of alternatives (actions you do or choices you make to achieve objectives) by their measurable attributes

Value Trees

Value Trees are used to determine the measurable attributes of alternatives or courses of action (Goodwin & Wright, 2004,  p.37)

Goodwin, P., and G. Wright.  Decision Analysis for Management Judgment. 3rd  ed.  Chichester:  John Wiley and Sons, 2004.

 5-Analyze alternatives against objectives using tools

 

Pros/Cons/Fixes

Evaluating each alternatives’ merits, it compensates for negativity bias by forcing us to identify the positives  first . Only then are we allowed to indulge joyously in negatives. But the technique goes a step further
by examining the negatives and trying to think of actions that could be taken to “fix” them, either converting them into positives or, if that isn’t feasible, eliminating them altogether. Those negatives (cons) that can’t be “fixed” represent the price one must pay, the burden one must bear, if the thing being evaluated were to be adopted or accepted.(Jones, 1998, p.53)

-List all Pros and all Cons
-Review and consolidate the Cons, by merging and eliminating
-Neutralize as many Cons as possible by finding fixes for them
-Compare the Pros and ‘unalterable’ cons for all options
-Pick an option

For a decision Problem that has two alternatives, this can lead to a decision.

 

Simple Ranking

Eliminate clearly inferior Alternatives by Ranking  each criteria for every alternative.

Then eliminate the alternatives that are clearly dominated by at least one other alternatives using pairwise comparison.

if alternative A in comparison with B has a higher ranked attribute, and none of its other attributes are lower than B attributes, B is dominated by A; and B should be eliminated.

If Xn dominated Xm, that is enough to eliminate Xm.

Those alternatives that don’t have superiority over any alternatives on any attributes are eliminated. (If an Alternative is superior on one attribute over others it cannot be eliminated because that attribute may be very important)

A  B  C

1  3  3

2  2  2

3  1  3

3  3  1

In the example above nothing can be eliminated.

And this still may leave illions or billions of ‘undominated pairs’ – pairs of alternatives where one has a higher ranked category for at least one criterion and a lower ranked category for at least one other criterion than the other alternative, and hence a judgment is required for the alternatives to be pairwise ranked.

The PAPRIKA is used to get rid of more alternatives.

Potentially all pairwise rankings of all possible alternatives (PAPRIKA)

SMART (Simple Multi Attribute Rating Technique)

Swing Weights

Influence Diagrams

Decision Trees / Multi-stage (linked) Decision  Trees

Think about your reactions to uncertain events in future and ٰٰٰٰCreate Multi-stage (linked) Decision  Trees

Eliciting Probabilities

Extended Pearson-Tukey (EP-T) approximation
Direct verbal
Direct numerical
Probability Wheel
probability Method
Graph Drawing

Evaluating Probability Estimates with Brier Score

Expected Monetary Values

Risk and Utility, Expected Utility

 

 

http://en.wikipedia.org/wiki/Potentially_all_pairwise_rankings_of_all_possible_alternatives

https://www.1000minds.com/solutions/decision-making-software

 

  • Goodwin, P., and G. Wright.  Decision Analysis for Management Judgment. 4th  ed.  Chichester:  John Wiley and Sons, 2004.   
  • Hammond, J., Keeney R. Raiffa H. (2002). Smart Choices: A Practical Guide To Making Better Life Decisions. Broadway Books New York.
  • Jones, Morgan D. 1998. The Thinker’s Toolkit: 14 Powerful Techniques for Problem Solving by Morgan D. Jones(1998-06-30). Crown Business.

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