Choosing by 64b5SWe


  Basic Decision Making Model
1. Recognize a problem or dm situation
2. Frame the problem/decision (objectives,
   constraints, factors, priorities)
3. Generate alternatives
4. Evaluate & choose
5. Implement & evaluate results (iterate)
6. Stabilize & learn from
Important to have a good frame first,
including objectives and constraints

Good to have a rich range of creative

Very important to minimize judgmental
biases & mental locks, both in generating
alternatives & in evaluating them
          Choosing (cont.)

Central focus on how well does an
alternative satisfy the objective(s) and
other decision criteria
Always have constraints, including:
– Cognitive limitations
– Incomplete or inaccurate information
– Uncertainties in outcomes & future events
– Time & cost constraints
Aim for a good decision, not a perfect one
–   Meets objectives (full CRIP)
–   Doesn’t create new problems
–   Within time and other constraints
–   Consistent with values

Be wary of certainty
Use good critical thinking & creativity
Separate facts from assumptions &
Recognize & reduce biases & blocks/locks
Need to consider practicality,
implementability, stakeholders
Can be as simple as identifying pluses &
minuses, then assessing (not just adding)
Sometimes, “satisficing” is OK
Sometimes, models and computer aids are
Sometimes, intuitive decisions work (but
beware of “fire, ready, aim” DM)
Some of Many Methods to Decide
Gut feel, emotions, intuition
Two-column pros & cons list
Ben Franklin’s two-column list
Decision matrix
– Brief statements
– 3-level qualitative ratings
– Expanded qualitative ratings
Decision matrix with variable criteria weights
Decision tree
Managing Factors Affecting
Decision Making & Creativity
     Some Factors Influencing

Type of decision
Urgency, pressure, constraints
Attributes of environment
– Uncertainty, risk
– Complexity, ambiguity
– Conflict
Decision-maker characteristics
– Wants (biological factors) vs. "Shoulds" (values)
– Judgmental biases
     Selective perception
     Impression effects
     Framing effects
     Escalation of commitment
     Categorization effects
– Creativity
– Mental blocks
Who else is involved
Self-fulfilling prophecies
Pygmalion effect, plus or minus
We tend to create negative images
Replace with intentional, positive images
Can help in many ways, e.g.:
– Public speaking
– Stress reduction
– Various aspects of decision making
– Difficult interpersonal interactions
– Health…
Argue for your limitations and, sure
enough, they’re yours.
     Richard Bach

The greatest discovery of my generation is
that human beings, by changing the inner
attitudes of their minds, can change the
outer aspects of their lives.
     William James
        Visualization Exercise
Identify a specific future situation in which
you want to perform effectively
Get very comfortable and relaxed
Visualize moving yourself through space and
time to be in that future situation
With you in that situation performing
effectively and the situation playing out
– Experience it, not observe or think about it
– With input to all senses: sight, hear, smell, feel, taste
               Next Time
Introduction plus first two of the ten mental
locks in the von Oech book
As you read each chapter:
– Do at least some of the exercises
– Think about the questions and suggestions
– Identify and highlight things you find important
– Think of possible applications for you
     Engage with the readings
What seems important here, what do I like,
agree with, find useful? Why?
– Highlight, make margin notes
How might I apply one or more concepts in my
life – now and in the future?
Are there things I disagree with and/or would
modify or expand on? Why? How?
It is important to create your own study notes or
concept map
        Judgmental Biases
Selective perception
Impression effects
Framing & presentation effects
Escalation of commitment
Categorization effects
      Judgmental Biases -1

Selective perception
– What we expect
– What we want to be
– Alignment
– Advocacy vs. inquiry
– Good questions at end of Notes 4.1
       Judgmental Biases -2

Impression effects
– Halo effects

– Primacy and recency effects
Is primacy or recency more powerful?
 Choose primacy (present first) if decision is to
 be at least a few days after both presentations
 Choose recency (present last) if there is to be
 a gap between presentations of the two sides
 & decision follows shortly after the last
 Moot if presentations of two sides & the
 decision are together (although individual
 listeners can vary in their ways of taking in
       Judgmental Biases - 3

Framing and presentation effects
– Selecting & emphasizing certain aspects,
  while excluding or minimizing others
– Reread web piece on framing
– Recall framing exercises and case
– Can include anchoring
 Some helps to reduce judgmental biases
from framing effects:
– Frame problems in terms of objectives
– Don't automatically accept a first frame
  (others’ or yours)
– Play devil's advocate
– Consider events both before & after what
  readily comes to mind
– Consider multiple possibilities
– Reframe in multiple ways
            Isn’t It Funny

When the other fellow takes a long time to
do something, he’s slow, but when I take a
long time to do something, I’m thorough.

When the other fellow doesn’t do it, he’s
too lazy, but when I don’t do it, I’m too
           Judgmental Biases - 4

Escalation of commitment
– Examples: gambling, Iraq war, USA and
  Russia arms race, employee I hired
– Some reasons we continue and escalate:
    Avoid acknowledging that initial decision was a
    Avoid loss of "face" & political influence
    More intense when we feel personally
    responsible for initial decision
   Escalation of Commitment:

Some suggestions:
– Set limits in advance and stick to them
– Share personal responsibility for original
– Do not include unrecoverable past costs in
  evaluating future costs
        Judgmental Biases - 5

– Representativeness
    Perceive info as typical of category
– Misperceive random event as a pattern
– Single vs multiple events
– Regression to the mean
– Availability bias

Suggestion: distinguish data from
inferences, assumptions, and conclusions
        Judgmental Biases
Selective perception
Impression effects
Framing & presentation effects
Escalation of commitment
Categorization effects
   Suggestions to Reduce All Five
        Judgmental Biases
Consider different perspectives
Consider multiple alternatives
Strive for objectivity
Use inquiry
Use others to help
Separate facts from assumptions,
inferences, & attributions
Examine implicit assumptions
Vital, often neglected
Need to know where you are going

– “If you don’t know where you’re going,
  you might wind up somewhere else!”
But you have to work with the situation as your
implementation proceeds

– “Plans get you into things, but you got to
  work your way out.”
Any implementation plan needs to
– What?
– How?
– Who?
– When?
–   Where?
–   Why (are we doing it this way)?
Consider, when identifying
barriers & action steps:
–   Resources
– Support
– Reward systems
– Timing
– Monitoring & controlling
– Culture
      Stakeholder Analysis
Identify change/topic for analysis
Identify major stakeholders for this topic
Determine their degree of support or
opposition to the action or change
Assess the balance of support
If not sufficient, work on changing to a
more favorable balance of support
– Decrease larger opposing forces
– Increase supporting forces
      Stakeholder Exercise
  Case 4, Implementation Disaster
   Brief summary?
   Questions at end:
1. Critique John's implementation.
2. What would have been a more appropriate procedure
   for John to follow before, during, and after calling the 25
   employees together for quality -circle interaction?
3. Discuss the advantages and disadvantages of
   continuing to use the quality circle technique in the
   Fairlee plant, given the events that have already
4. Recommend a course of action for John Stevens now
   that his quality -circle experiment is in trouble. Explain
   your reasoning.
             Next Time
Mental locks 6, 7, 8 (read Oech sections)

Perceptions of risk (see Notes on DM
Section 5)
Perceptions of Risk Affect
    Decision Making
a. Sure gain of $240
   52, 59% (this class, last year)
b. 25% gain $1,000; 75% zero
   49, 41%

c. Sure loss of $750
   25, 18%
d. 75% lose $1,000; 25% lose nothing
   75, 82%
However, framing had a a big effect

a. Sure gain of $240
        52, 59% picked this
+ d. 75% lose $1,000; 25% lose nothing
       75, 82%
= e. 25% chance to win $240 & 75%
chance to lose $760
        0, 3%
       More Framing Effects

b. 25% chance to gain $1,000, 75%
chance to gain nothing
      44, 41% picked this
+ c. sure loss of $750
      25, 18%
= f. 25% chance to win $250 & 75%
chance to lose $750
       100, 97%
Perception of risk is function of:

Potential gains and losses

Framing of information

Personal involvement

Personal characteristics
– About potential outcomes, probabilities,
  and/or controllability
– More uncertainty = more risk
– We try to control or ignore it

Potential gains & losses
– Prefer positive outcomes, overestimate them
– Seek risk when facing guaranteed losses
– Avoid risk with guaranteed gain
Information framing
– More value on possibility of avoiding loss over
  accepting a certain loss
Personal involvement (relevance,
responsibility, consequences)
– Take greater risks with less personal impact
Personal characteristics vary
– Risk-taking propensity
– Beliefs about control & competence
 Some Historical Paradigms
The earth is flat
Earth is the center of the solar system
Night vapors cause illness
A bloody apron is a sign of a good doctor
Only property owners may vote
Women have no right to...
Race X is inferior because...
Time is absolute
To be successful in the future, an
organization needs:
– Excellence
– Innovation
– Anticipation
Organizations must stay in an advantageous
stance relative to paradigm shifts
Paradigm shifters are almost always
Being a paradigm pioneer works
Need to shape your future
What is impossible to do right now, but, if
you could do it, would fundamentally
change your business?

When a paradigm shifts, everyone goes
back to zero.

"The real voyage of discovery consists not
in seeking new lands but in seeing with
new eyes." - Proust
  We need to avoid paradigm
paralysis to do effective problem
   solving or decision making
      Make this useful for you

Identify from this part of the course at least
two of the suggestions and/or blocks to
effective decision making – that you want
to work on
For each, write down at least two specific
things you can do to apply the suggestion
or reduce the block in your work and life

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