harvard_decision_making by xiangpeng

VIEWS: 7 PAGES: 27

									RUNNING HEAD: HARVARD DECISION MAKING




           Harvard Business Review on Decision Making



                                A Term Report

               Presented to the Emergency Management Faculty

                    California State University, Long Beach




            In Partial Fulfillment of the Requirements for the Course

      FCS 597, Analytical Techniques for Decision Support and Innovation




                               By The-Khai Luu


                                August 21, 2010
HARVARD DECISION MAKING                                                                         2


                     Harvard Business Review on Decision Making


Task1. Even Swaps

       A decision to be made in my personal life is selecting a new vehicle to replace my

1999 Ford Explorer that has 185,000 miles as my primary work commute vehicle. I want

a car that is safe, can be driven for at least ten years, and a cost of ownership at or under

$450 a month because I am on a fixed budget. I have four alternates to evaluate:

Volkswagen‟s Jetta TDI Sedan, Honda Civic LX, Volkswagen‟s Jetta Sedan, and Honda

Insight (Hybrid).

       Below are Consequences Tables for the four vehicle alternatives along columns

and objectives listed along the rows.

                                                       Standard
Objectives            2010 VW           2010 Honda        2010 VW           2011 Honda
                      Jetta             Civic LX          Jetta             Insight
                      TDI
Cost                  $24,680           $18,256           $19,457           $24,500
Engine                2.0L              1.8L              2.5L              1.3L
Horsepower            140               140               170               98
Fuel Type             Diesel            Gasoline          Gasoline          Gasoline
Emission              OBD-II            ULEV-2            PZEV              AT-PZEV
MPG                   30/41             25/36             23/30             40/43
Financing             1.9%; 5Yrs        0.9% for 5        0% for 5 Yrs      0.9% for 5 Yrs
                                        Yrs
Warranty              3 Yr Limited      3 Yr Limited      3 Yr Limited      3 Yr Limited
                      3 Yr Maint                          3 Yr Maint
Leg Room (F/R)        41/36             42/35             41/36             42/33.5
Rebates               $650 Fed                                              No
Cost of Owning        $5178 +           $3735 +           $3891 +           $5013 +$1017
P/Year (Payment +     $1319 + $0 =      $1439 +$200       $1668 =           + $200 = $6230
Gas + Maint)          $6497             = $5374           $5559
HARVARD DECISION MAKING                                                                 3


                                                 Ranking Table
Objectives             2010 VW        2010 Honda 2010 VW Jetta          2011 Honda
                       Jetta TDI      Civic LX )                        Insight
Cost                   3              1           2                     3
Engine                 2              3           1                     4
Horsepower             2              2           1                     3
Fuel Type              2              1           1                     1
Emission               2              4           3                     1
MPG                    2              3           4                     1
Financing              3              2           1                     2
Warranty               1              2           1                     2
Leg Room               A              A           A                     A
Rebates                $650           -           -                     -
                       Federal
Cost of Owning         D              B              A                  C
P/Year (Payment +
Gas + Maint)


       The first step would be to remove the even swaps (see Round 1). The fields

shaded in gray have numerical values equal to each other and less than the leading

Alternative and are removed as an even swap. Next, the values that had the lowest

numerical value for each objective shaded in purple are removed. If there were enough

fields that had gray and purple shaded areas, the objective would be removed from

further evaluation. (ex. Leg Room). The cost of owning a VW Jetta TDI and Honda

Insight Alternatives exceed the monthly maximum of $450 a month and is eliminated as

an Alternative.

       I would cross out duplicate objectives like Cost, Financing, Warranty, and

Engine; with the removal of the VW Jetta TDI and Honda Insight the following

objectives would not apply and would also be removed (see Round 2).
HARVARD DECISION MAKING                                           4


                        Round 1 – Even Swaps

          Objectives 2010          2010      2010 VW 2011
                     VW            Honda     Jetta   Honda
                     Jetta         Civic             Insight
                     TDI           LX
          Cost       $24,680       $18,256   $19,457    $24,500
          Engine     2             3         1          4
          Horsepower 2             2         1          3
          Fuel Type  Diesel        Gas       Gas        Gas
          Emission   2             4         3          1
          MPG        34            29        25         41
          Financing  3             0.9%      0% for 5   2
                                   for 5     Yrs
                                   Yrs
          Warranty       1         2         1          2
          Leg Room       A         A         A          A
          Rebates        $650
                         Federal
          Cost of        $6497     $5374     $5559      $6230
          Owning         YR        YR        YR         YR
                         $541      $447      $463 Mo    $519
                         Mo        Mo                   Mo


                        Round 2 – Even Swaps


                    Objectives 2010          2010 VW
                               Honda         Jetta
                               Civic LX      (Sedan)
                               (Sedan)
                    Cost       $18,256       $19,457
                    Engine     1.8L          2.5L
                    Horsepower 140           170
                    Fuel Type  Gas           Gas
                    Emission   1             2
                    MPG        29            25
                    Financing  2             1
                    Warranty   2             1
                    Leg Room   A             A
                    Rebates
                    Cost of    $5374 YR      $5559 YR
                    Owning     $447 Mo       $463 Mo
HARVARD DECISION MAKING                                                                  5


       For the final analysis I could make a decision using the Even Swaps or I could

evaluate the value of the objectives using Benjamin Franklin‟s Moral or Prudent Algebra

(Hammond, Keeney, Raiffa, 2001, p. 42-43). Prudent Algebra is devised as a list of

“Pros” and “Cons;” Franklin suggested that he could spend several days weighing the

argument for or against a decision but I will take only a few minutes to do my prudent

algebra.

                                Round 3 – Even Swaps


                       Objectives 2010 Honda          2010 VW
                                  Civic LX            Jetta Sedan
                                  (Sedan)
                       Horsepower 140 [1]             170 [1]
                       MPG        29                  25
                       Cost of    $5374 YR            $5559 YR
                       Owning     [$38.39]            [$32.70]


                              Round 3 – Prudent Algebra

               Honda Civic                                      VW Jetta

       Pros                  Cons                     Pros                  Cons

16% better MPG                                Stronger engine

                      Subcompact              Compact

                      No maint plan           3 yr Maint plan

Good finance                                  Better finance

Better resale value                                                 Good reseale value

$200 less per year                                                  $200 more per year
HARVARD DECISION MAKING                                                                        6


       For Round 3 – Even Swaps, of the two Alternatives, the only real variable is

horsepower and subsequent cost of that feature. Evaluating per yearly cost of each

Alternative‟s horsepower, I found that the Honda Civic costs $38.39 and the VW Jetta

Sedan costs $32.70. Using the even swaps method, I would choose the Jetta Sedan

because all things being equal and acceptable (cost of ownership, high miles per gallon,

emission ratings, and leg room) for about $200 more you get a car that has 21% more

horsepower, no cost maintenance for 3 years and better financing options than the Civic.

Using Prudent Algebra, the results are inconclusive and I do not know if I could make a

better guess than using even swaps method. Prudent Algebra might require me to add

additional fields that the even swaps method did not consider as an objective such as

resale value and independent ratings like Consumer Reports.



Task 2. The Effective Decision

       The Classification. The first sequential step is for the effective decision maker to

classify the problem (Drucker, 2001, p. 3); there are four classifications, identifying and

applying the right one depends on determining if the symptom is of a fundamental

disorder or a stray event. The personal decision at hand is which new car to buy. Deciding

on which car to buy is symptomatic of the first classification – a truly generic event like

an inventory decision for a business.

       The Definition. The second sequential step is ensuring that the definition is

complete and is not missing components or objectives (Ibid, p.7). For the personal

decision of buying a new car, I would define the ideal car as possessing the following

objectives low cost of ownership, safety, efficiency, reliability, and style. To ensure that
HARVARD DECISION MAKING                                                                       7


this definition is complete I would (a) check the definition against all observable facts,

(b) test for signs that definition explains my personal need for a new car, and (c) be

prepared to revise the definition after an influencing event occurs like having a need for

more room with the addition of another family member.

       The Specifications. The third sequential step is defining clear specifications as to

what the decision has to accomplish (Ibid, p.9). Personally, the need for a new car is to

replace my 1999 Ford Explorer as the primary commuter vehicle and I would use the

objectives from Task 1 and specify for each objective the boundaries needed to be met to

select a new car. I have a laundry list of objectives from Task 1 but I am most concerned

about the following objectives: (a) cost of ownership, which needs to be at or below $450

per month due to my fixed budget; (b) safety, engineered and tested to be safe for head on

collision and side impacts; (c) efficiency; 25 to 35 miles per gallon capability with a

strong engine; (d) reliability, designed well and core components last ten to fifteen years;

(e) style, the car needs to look good and have functional and practical interior accessories.

       The Decision. The fourth sequential step is to make a decision based off of what

is right versus what is acceptable (Ibid, p. 11). For my personal decision to purchase a

new car, if I took the “right” approach in regards to the standards specified for each

objective then my standards are not diminished despite the fact that I might compromise

on a lower standard for a specific objective like gas mileage. I might compromise on

lower mileage efficiency if the cost of ownership decreased 15% to 20%. However, if I

began with what is “acceptable” approach in regards to the standards specified for each

objective then I run the risk of giving up important objectives that would not be identified

as part of the solution and not make the best decision overall. Lastly, the decision
HARVARD DECISION MAKING                                                                        8


requires input from my wife, while I might be able to gather the facts up to this point,

making a decision either the right decision or compromise thereafter, my decision would

be conditioned on her approval and blessing. If I did not involve my wife in the decision

making process I might have to sleep on the couch.

       The Action. The fifth sequential step is to convert the decision into action (Ibid, p.

9). The first sub-step would be to address the question, “who has to know of this

decision?” Notice would have to be given to my immediate family, my CPA, auto-

insurance representative, the car dealer, California DMV, and my co-workers. After the

right persons and entities are notified, the next sub-step would be to ensure that the right

person or persons have to carry it out; the right person would be me and anyone else that

is legally required to sign the contract for purchase (after concluding that the right model

with packages, etc. has been agreed to at the car dealership).

       The Feedback. The sixth and final sequential step is feedback (Ibid, p. 9). My

decision to purchase the new car would be monitored by using quantitative and

qualitative data sources. My family and I would be the first judge of the value of and

worth of the new car and I would get qualitative data such as “I love the car, good

choice” or “I hate the car, it‟s a wreck.” I would also periodically check with Consumer

Reports, Kelly Blue Book, and other auto rating agencies to see if there were any red

flags discovered or warnings about the vehicle purchased. I might go so far as consult

with my auto insurance agent and query the safety record of other drivers that purchased

the same vehicle and model on any problems with the vehicle. If enough negative

qualitative and quantitative feedback is received concerning the purchase of my new car,

I might take action to return the vehicle under California‟s lemon laws, work out a deal
HARVARD DECISION MAKING                                                                       9


with the dealer to trade the car in for another model, consider joining a class action suit

against the dealership or car maker, and or learn to live with it.



Task 3. Humble Decision Making

       I own an eleven-year old Ford Explorer, SUV, with about 185,000 miles that runs

well that I use mostly as a work commuter vehicle, and as a work truck with the option of

transporting maintenance items for home improvement. My objectives for a new car are

low cost of ownership, standard safety features, motor engine efficiency, reliability, and

style. I have four alternate automobiles to evaluate; at this time my favorite is the VW

Jetta Sedan. I would likely make this purchase sometime next year after paying off on

personal credit card debt and saving up on emergency funds. I would most likely keep the

Ford Explorer as a limited use vehicle for its utility and not trade it in for the purchase of

the new car.

       Focused trial and error (Etzioni, 2001, p. 54) could help me select automobile

objectives (auto safety, engine efficiency, low cost of ownership, etc.); I may not know

where to start off hand so I might devise an outline for research and reference Consumer

Reports, Internet search engines, ask family members on their opinions and so on. I might

give myself a few weeks to get a strong list of objectives and periodically review

progress every three days. With a strong list of objectives in hand, I might devise that the

next course of action would be to specify boundaries for each of the objectives (good to

excellent rating for crash tests, $450 or less per month on car payments, etc.). As applied,

this strategy does not have a specific roadmap to follow and is dependent on feeling my

way through the data and turning that information into actionable intelligence.
HARVARD DECISION MAKING                                                                      10


        Tentativeness is a strategy that I would use on a limited basis because it

conditions the decision maker to make a decision but have options to revise the course of

action and use another course of action in the event that the first decision failed or had

limited success (Ibid). The closest analogy for this strategy is like test driving a vehicle, if

objectives being equal for the selected automobiles, if I got a good vibe or liked the

handling of the vehicle I would be prepared to commit to that vehicle choice or if I hated

the vehicle I could easily rule out that auto alternative and choose another auto alternative

to test drive until my opinion was favorable.

        Procrastination (Ibid, p. 55) as a strategy could be used in several ways when it

comes to shopping for a new car. Having narrowed the list of viable auto alternatives, I

could take a few days or weeks off on making a decision to re-evaluate my position. If I

had already gone to the dealership, seen the automobile that I wanted, had the test drive,

sat down with the sales representative, and started the negotiation – as a tactic I could

step back and tell the sales rep that I wanted to think about it further. By doing so, I could

be giving myself time to reflect on the legal terms discussed and evaluate if this was a

good buy or a bad buy. I could also be using this tactic to get the sales rep to lower the

cost of the auto knowing that the sale rep wanted to make a deal and time was my

leverage.

        Decision staggering (Ibid) would be used in my decision making process. One of

my conditions to buying a new car is that it would be sometime next year after I have

paid off my personal credit card debt and built up sufficient emergency savings funds.

This situation is dependent on my aggressive ability to pay down on credit card debt,

limit impulse spending, and abiding to a budge t for the next twelve to fourteen months.
HARVARD DECISION MAKING                                                                      11


If for some unforeseen situation like a need to take a vacation eight months from now, the

cost of that spending might additionally delay the date to make the automobile purchase.

Lastly, after meeting these two conditions in the near future, I could rationalize that it

makes more sense to continue using my present automobile for another year and delaying

the purchase until the following year.

       Fractionalizing (Ibid) could be used as a condition to purchasing the new car at a

later date. I want a new car but I am not in a financial position to commit to the financed

monthly payments until I pay off a reasonable amount of my personal credit cards, set

aside three to six months worth of salary in the catastrophic event that either I or my wife

loses their job, and so on. So pay off personal debt would be the first condition. The

second condition could be securing favorable financing. The third condition could be a

requirement to sell my present vehicle or trade the vehicle in for additional funds support.

       Hedging bets (Ibid, p. 56) could be used as a strategy for ensuring the best deal

for a new car. Say for example I have decided on a VW Jetta Sedan, to use this strategy I

could visit four car dealerships in the Los Angeles area and low ball each dealership with

what I am willing to buy the automobile for and ask the sales rep to call me back if the

terms are acceptable. I might not get a call back from any of the four dealerships or I

might get two call backs and with counter-offers get a price I am satisfied with from one

of the two VW dealerships.

       Maintaining strategic reserves (Ibid) would be used as a condition for purchasing

a new car. As before mentioned, I would need to set aside three to six months worth of a

salaries for an emergency fund before I would be comfortable to buy a new car.

However, upon further evaluation maybe three to six months worth of salaries are not
HARVARD DECISION MAKING                                                                   12


enough. Perhaps I need six months to nine months worth of reserves; in today‟s

depressed economy many persons that lost jobs are still looking for work up to a year

after being rifted or let go. Aside from emergency funds, maybe I am concerned about

getting into an accident and losing wages so I might consider buying short term disability

insurance to off-set lost wages.

       The reversible decisions (Ibid) strategy is not something that I would naturally

consider; however, as applied it would allow me to purchase the new car acknowledging

that I would take the appropriate measures in the event that the cost of ownership

skyrockets. I am on a fixed budget and I along with the majority of Americans would find

it difficult if the cost of gasoline cost more than $4.00 per gallon due to a myriad of

natural, man-made, and technological hazards that hurt domestic or international oil

production. The appropriate measures that I would use as a countermeasure for the

increased cost of fuel would be to consider carpooling with co-workers and either use less

gas per week sharing the driving duties with another co-worker and working on a 9/80

schedule and getting one day off, every other week, and thus spend a day off of the

highway.



Task 4. Interpersonal Barriers to Decision Making

       Restricted commitment (Argyris, 2001). My supervisor attends a monthly internal

committee called the Central Safety Committee, attendees are our Agency‟s senior

management, and at these meetings they discuss general safety topics, training results,

and schedule specialized assessments to be performed by our Environmental Health and

Safety (EH & S) Section. Restricted commitment is present in our Agency and as
HARVARD DECISION MAKING                                                                     13


evidenced by monthly Central Safety Committee notes, lip service is paid as the norm

towards general hazard avoidance and actionable decisions occur only after employees

lose a finger or get killed. I cannot speak much about other sections, but for anything

related to EH & S, restricted commitment is standard operating procedure, occurring

somewhere between 75% of time. Often times the reason for restricted commitment is

due to conflicting departmental objectives, diminished budgets, and procrastination and

delay strategies, acceptable versus what are right attitudes, denial, and ignorance. My

supervisor acknowledges that this local government is slow to change and requires firm

but advocate style pressure. To minimize restricted commitment occurrence, we are

limited by what management allows us to do. As a section we could win them over with

proposals and reports on benefits of hazard mitigation; try a grassroots approach and get

buy in from employee Union and professional committees; lastly we could work on

winning over key Department Head managers that could be our advocates.

       Subordinate gamesmanship (Ibid, p. 70). After reading this case study, I can see

how subordinate gamesmanship could be a barrier to decision making. No organizational

leader wants to sit through a long meeting let alone a meeting that could be much shorter

than it needs to be. Presenters, in any organization, cautiously learn to be tactful when

presenting negative information and positive information too, sugar coating the data, and

providing lip service as opposed to getting to the point. Personally, I have not observed

that in the local government that I work for; however, I have seen it used at the Los

Angeles County Operational Area, specifically during post exercise evaluations. For the

local government that I work for most meetings follow the prescribed one or two hour

format, they do get to the point, spend less time sugar coating the facts, and give the
HARVARD DECISION MAKING                                                                   14


attendees the data (good, bad, or indifferent) and present a summary or recommended

course of action to follow. As far as documenting subordinate gamesmanship at my local

government I would say that it‟s on the low end between 25% of the time; for the Los

Angeles County Operational Area I would say that because they represent 78 cities,

special districts, and other jurisdictions the message is always carefully crafted, the

meetings are longer than they should be, its‟ occurrence at the high end between 75% and

100% of the time. This barrier can be mitigated by having formal or informal rules

known by all that subordinate gamesmanship should be minimized and that the Boss

prefers the raw facts and recommended courses of action and if he/she has a question, be

prepared to answer or provide further explanation. Less is more.

       Lack of awareness (Ibid, p. 72). I believe our local government might have similar

results as indicated in the case study regarding executive behavioral characteristics.

However, most of the employees have worked with each other for fifteen to twenty years

and have taken the time to know each other professionally and personally. Turn-over is

low because our local government has a good pension program that vests after five years

of full time employment, the pay is moderately progressive, and the work rarely goes

beyond eight hours a day. If I had to guess I would say lack of awareness is a problem

that affects 20% to 33% of our supervisors and managers in their ability to communicate

with each other and or understand each other. I would concede that employee awareness

could be better than it is now and that could be achieved through professional

development training and modifying annual professional and supervisory training to

integrate self-evaluation instruments like the Thomas-Kilman Conflict Mode Instrument

or the Leadership Effectiveness & Adaptability Description (LEAD) Self / Other
HARVARD DECISION MAKING                                                                      15


Instrument. It would be a tough sell but Management could be sold on the idea of

conducting three hundred and sixty degree employee performance review as opposed to

the standard annual performance review between the employee and the immediate

supervisor.

       Blind spots (Ibid, p. 76). Working for this local government it‟s quite transparent

how subordinates feel about their supervisors. The world belongs to engineers; as a

special districts specializing in wastewater and solid waste functions, the highest paid

salaries go to engineers and up until about two years ago this local government

predominantly promoted based off seniority versus competency and ability. Anyone that

is not an engineer has limited job growth opportunities and usually hit their pay ceiling

after 8 years of employment. As for the previous barrier, about 20% of management have

blind spots and are unaware of how their subordinates feel about them. A majority of

management knows that their subordinates do not have favorable opinions of them and of

the organization. This organization can minimize the blind spots by speaking to

employees rather than at them; by creating a shared vision where employees take

ownership in their respective stations, foster employees to take initiative and find their

own solutions, by management taking effort to mentor and help each person find their

potential in the organization.

       Distrust and antagonism (Ibid, p. 78). At our local government we have a board of

directors that represent 78 cities from Los Angeles County, they do not intervene in how

the special districts operate, as was indicated by the case study; however, distrust and

antagonism is present between blue collar, white collar, professionals, engineers, and

management. I would rate the occurrence as being slightly higher than the before
HARVARD DECISION MAKING                                                                    16


mentioned barriers, resting around 33%. In response to the downward trend in the

economy, our local government‟s budget has decreased, and I believe the State swooped

in and borrowed about fifty million from our reserves, and so for the he past three years,

management has instituted challenges for departments to trim costs and reduce spending.

Indirectly this program has uncovered employee abuses and several high-ranking

employees have been terminated and others sought early retirement. Management could

improve upon distrust and antagonism by giving employees incentives, rewards, and

recognition for reducing costs or coming up with a solution to work smarter.

Management takes a lot of employees for granted when they should acknowledge that the

employees‟ success translates into the organization‟s success, and that a happy employee

is more productive rather than an unhappy employee that is not motivated to do more

than is required of him or her. Management could reverse the downward trend by taking

the time to see the organization from the employees‟ perspective.



Task 5. The Hidden Traps in Decision Making

       Anchoring trap (Hammond, Keeney, and Raiffa, 2001, p. 146). I believe

anchoring affects about 25% of our local government. Some anchoring is very necessary

– we use past performance as an indicator of trends and for predictive analysis for hazard

avoidance. Management wants to know if enough money is adequately spent on various

environment health and safety programs that mitigate the rate of accidents, injuries, or

deaths. Our collective success or failure is measured by past performance. However,

reliance on anchored data can have its negative consequences too; for risk avoidance and

hazard mitigation the message has to be uniform regardless of the data improvements and
HARVARD DECISION MAKING                                                                        17


the training has to be inclusive and regular to avoid complacent behavior. Anchoring

affects mindset to the point that there‟s strong resistance to change. On a personal level, I

would acknowledge what anchoring is, observe the workplace and identify how

anchoring is applied and document it. Then I would present it to my supervisor and with

buy-in develop a course of action to address the trap either on a limited basis, or section

by section as a trial and error to evaluate if it can be applied department by department.

       Status-quo trap (Ibid, p. 149). The status quo trap affects about 75% of our local

government. Our department managers and chief engineer are defined by status quo. But

I do not fault them too much because often in our line of business the status quo is a

better standard than what is in practice in the general public. Take the industry design

specifications for thickness of cement walls for example, three to six inches is the

standard whereas the status quo for our facilities is fifteen to thirty inches. Unofficially

our standard is to build five times the accepted industry standard for most specifications

to ensure the structure is strong and will not likely ever fall apart short of a 9.0 magnitude

earthquake. Aside from building specifications, the status quo trap, was integrated into all

policies and procedures, annual engineer promotion boards, employee benefits, cost of

living adjustments, and selection of management. However, management has taken steps

to change how we operate, in response to the depressed economy. To continue moving in

management‟s direction, I would take effort to not emphasize status quo but rather list it

as one of several factors, or one of several courses of action, or one of several costs, and

so on. To avoid the status quo trap a probable mindset is to take on the persona of

impartiality, indifferent to how things are done by standard operating procedure and

offering unbiased solutions for any question or concern.
HARVARD DECISION MAKING                                                                     18


       Sunk-cost trap (Ibid, p. 152). For my local government there are several examples

of sunk-cost projects. A decade ago our local government had about one billion dollars in

reserves; then about five years ago coming to the realization that our primary landfill (the

world‟s largest active landfill) was set to close in 2009-2010 prompted management to

buy a landfill in Imperial County for about two hundred million dollars. Then the

economy took a nose dive and debris tonnage to regional landfills decreased 25% to 50%.

In response, our local government demoted 25% to 50% of landfill staff. In addition the

technical solution to transport trash from our recycling centers in Los Angeles County to

Imperial County by railway cars is spiraling out of control and past project deadline by

one year. Our management is throwing money at the problem but cannot walk away from

this two hundred million dollar investment. It‟s hard to gauge what percentage sunk-costs

affect our local government; however, I can estimate that the dollar figure in expenses for

these monumental projects cost about 400 to 600 million dollars. How can our local

government avoid this kind of trap in the future? Cost sharing. There are many examples

of other monumental projects that our local government has partnered up with to manage

and or provide funds to develop. I don‟t have a solution for this sunk-cost project but I

propose that in the future, project engineers set aside space in proposals to discuss and

analyze worst case scenarios that could damage, delay, and threaten the project and offer

up viable solutions to counter those hazards.

       Confirming-evidence trap (Ibid, p. 155). I cannot confirm, I would love to field

test this, but I would estimate that my local government is prone to this trap about 50% of

the time. As a feedback mechanism for any decision, seeking out and confirming

corroborating evidence is part of the National Incident Management System (NIMS)
HARVARD DECISION MAKING                                                                    19


Operational Planning P cycle that I teach for professionals and supervisors. Feedback is

best obtained first hand but and through operational planning briefs; however, I had not

put much thought on sampling and seeking out counter-opinion evidence that gives a real

picture rather than the simple, uncorroborated data evidenced by the confirming-evidence

trap. It‟s worth integrating into my instruction how this trap could give Incident

Commanders misleading information and advise against seeking out the easy answer but

rather sample from a diverse pool of sources.

       Framing trap (Ibid, p. 157). The framing trap manifests itself in our local

government through state and federal government programs such as OSHA; I would

estimate that we are susceptible to the framing trap about 25% of the time. Often times

the law or regulation is vague, without clear guidance on how the employer is suppose to

mitigate against hazards. Earlier this month I was faced with a framing trap situation:

when to use locks versus tags regarding the Lock-out, Tag-out, and Block-out Safety

Program. The answer is that it depends on the OSHA enforcement officer and your

interpretation of the regulation as addressed to your specific piece of equipment and the

hazard you‟re attempting to mitigate. The framing trap as applied to local governments‟

safety programs can be very costly and have wide disparities because the interpretation

varies along with enforcement‟s understanding of the specific situation. To minimize the

framing trap as applied to our safety programs, it‟s a good idea to meet with and know

the local OSHA enforcement officer, coordinate a complimentary evaluation of your

safety programs, and when in doubt consult with your legal advisor on the interpretation

of the said regulation. By default, OSHA takes the conservative approach towards safety
HARVARD DECISION MAKING                                                                       20


when in reality given the particular vulnerability assessment the correct application could

be considerably less strict and cheaper for the local government.

       Overconfidence trap (Ibid, p. 162). I envision the overconfidence trap affecting

our local government personnel during emergency situations, excluding routine business

operations. In this emergency situation I believe the overconfidence trap affects

emergency personnel about 25% of the time. The possible scenarios for this trap are

underestimating the quantity of untreated sewer system overflow. The Incident

Commander is encouraged to downplay the problem and quote a smaller spill size to

avoid enforcement fines and penalties. Another possible scenario where the trap is

present is the overconfidence of Incident Commander‟s in their ability to solve these

kinds of problems and reluctance to ask for help. For our local government, mitigating

the overconfidence trap is an ongoing task. My approach over the past four years is

comprehensive emergency management training consisting of NIMS courses, internal /

external exercises and workshops with all first responders, and special emphasis on

supervisors and managers developing emergency incident action plans for the initial

response and for the first operating period.

       Prudence trap (Ibid, p. 163). Normally I do not find fault with the prudence trap. I

would say that our local government is affected by prudence trap 100% of them time. To

error on the side of safety, we build a lot of tolerance and resistance into our buildings,

that often exceed the safety precautions by five or six times industry standard. We do so

knowing that it will cost more but we reassure management and the public that acts of

Gods are the only instances where there will be a failure at our facilities. The poisonous

gases will be contained and at most injure personnel in the immediate vicinity. However,
HARVARD DECISION MAKING                                                                   21


the prudence trap could impact us in a negative way, such as spending too much on high

end countermeasures to contain the hazards. Personally, I would say that we take a

middle ground approach and do not have that problem. I have conducted comprehensive

vulnerability assessments on our facilities, on an annual basis, identified facilities‟

vulnerabilities, and worked with the managers to reduce vulnerabilities. I know which

hazards pose a higher degree of harm to our system. My facility threat assessments and

vulnerability assessments are reviewed by local government department managers, local

law enforcement, and Department of Homeland Security. Any additional things I might

do to decrease the likelihood of this trap would be to provide awareness training for

professionals and supervisors on an annual basis

        Recallability trap (Ibid, 164). I do not see this trap affecting our engineers whom

are in the rear with the gear, but the recallability trap could affect our first line

supervisors, whom are trained to be Incident Commanders for their area of responsibility.

Most of them apply the recognition-primed decision making, allowing them to quickly

size up the situation and develop an action plan for response. It‟s in this five minute

window where the recallability trap could affect 20% of our Incident Commanders. I

have personally trained all of our first line Incident Commanders, their immediate

supervisors, and department managers on ICS 100, 200, 300, 400, 700, and 800. I have

reviewed their facility standard operating procedures, and revised their department

operation plans, and evaluated them in tabletop and functional exercises over the past

three years. I have also coordinated after action reports and written after action reports on

their real world incidents, so I have a good idea how they operate in the field. In my

opinion our personnel are well trained and competent. Most of these incidents are
HARVARD DECISION MAKING                                                                       22


resolved in less than four hours and the response cost is minimal. I am not concerned

about mitigating against this pitfall. What I plan to do for this pitfall and all the other

ones, is to review which ones are likely to degrade incident response and write an annex

addressing how to mitigate against them.



Task 6. When to Trust Your Gut

        Intuitive/gut instincts are a person‟s primordial or basic level reaction to stimuli.

The source of the stimuli can range walking along a path and being confronted by a

rattlesnake in the grass or safely reviewing a business proposal at your desk. As attributed

to the evolution of the human brain adding parts from jellyfish, rats, monkey, etc and

through our human senses (sight, hearing, touch, smell, taste, pain, balance, joint motion

and acceleration, sense of time, temperature differences, and magnetic direction) our

nervous system transforms that data into electrical impulses that our brain interprets, and

as a result our brain sends signals to other parts of our body in reaction to the stimuli for a

fight or flight reaction. We may experience a physical reaction and or our perception of

the stimuli gives us the ability to make a decision – run away from the snake or pick up a

rock and kill the snake, like the proposal or run away from the proposal. The intuitive/gut

instinct may be correct, wrong, or a combination of the two. With a million experiences

to reference over a lifetime or very little experiences because you‟re an infant, we can

react differently to the stimuli, we can ignore the stimuli, and we can learn to apply other

decision tools to arrive at another conclusion or to confirm our intuitive/gut instincts.

        The gambler‟s syndrome means taking “unnecessary risks to recover a loss”

(Hayashi, 2001, p. 183). In my opinion, the gambler‟s syndrome is similar to men‟s risk
HARVARD DECISION MAKING                                                                        23


adverse behavior but different in that as a syndrome, there is an aspect of operating with

blinders on, ignoring other senses that are telling one to go into flight mode and stop

endangering themselves further. Occupationally, I would say that our local government

employees are more likely to experience gambler‟s syndrome and that number is 50%.

Proportionally, there are more men that work here than do women, there are lots of

occupational hazards onsite (industrial, hazmat, biological, chemical, electrical, etc), and

the accident rates that we track often suggest the leading factor causing the accident is

attributed to independent employee action. As an organization, the first step is to

recognize the problem and then determine if remedial training can rectify the problem.

Absent of training the best course of action is to counsel the employee and ultimately

remove the employee from employment.

       Over-fitting the data “is our tendency to see patterns where none exist” (Ibid).

Over-fitting the data can be a pitfall for the majority translating into employee lost time

and decreased efficiency, and I believe this affects about 75% of our local government

employees. Personally, I am well trained in analyzing data, conducting pattern analysis,

and creating link diagrams; I got this training in the US Army as a military police officer

and a military intelligence officer and yet my wife tends to see the patterns better than I

do (attributed to her MBA from Pepperdine no doubt). Over-fitting the data, seeing

patterns where none exist, is a similar reaction expressed by the Worried-Well – whom

flood the hospitals worried about their contagion to H1N1 or salmonella after coming in

contact with someone on the street that coughed. Through formal education and effective

guidance from management, our local government might limit this pitfall; however, In

my opinion it‟s to be expected that people will fall prey to this pitfall and the best thing
HARVARD DECISION MAKING                                                                     24


we can do is to acknowledge the pitfall and remind employees to „stay on track‟ and not

get lost spending time on undocumented problems or patterns.

       Revisionism occurs when “we frequently remember when we didn‟t trust our gut

and should have, while conveniently forgetting when we were fortunate to have ignored

our instincts” (Ibid, p. 184). This pitfall is not something employees talk about so I do not

see examples of this in our office; however, if I polled a hundred employees I bet 50% of

them will say that revisionism has affected them in the past year and 25% of them will

say that it happens to them more frequently. Is this a pitfall to avoid or is it how our

minds work to reassert that “you were right along” and with hindsight you‟ll trust your

instincts the next time. I do remember the times that I ignored my instinct to do

something, and that something was often done in reaction to strong feelings or emotions

in the workplace like refraining from sending a co-worker a nasty email or replying to

your boss when you‟re angry.

       Self-fulfilling prophecy occurs ”when we hire or promote someone, for instance,

we consciously or subconsciously make extra efforts to ensure that person‟s success, in

the end justifying our original decision but obscuring whether our choice was actually a

good one” (Ibid). This pitfall affects about 50% of our employees; 50% of them are

purposefully manipulated through our mentoring program and 50% of them experience

this pitfall on their own. In my line of work emergency response training for public works

employees, my supervisor encourages self-fulfilling prophecies or as he calls it “setting

people up for success.” Each year I draft an exercise plan and in support of that plan I

coordinate monthly or quarterly training, then I provide one-on-one meetings with key

employees that might play a lead role as either Incident Commander or Command Staff. I
HARVARD DECISION MAKING                                                                        25


will explain to them the tasks, conditions, and standards for their job in the exercise. A

year later we have the exercise and department heads marvel at how wonderful the

exercise was and how much the staff learned and so on. Perhaps its pitfall or it‟s our way

of making the best outcome possible. How well do they do, having us coddle and hold

their hands? They do pretty well in the field and I get to do the process over again each

year for another batch of professionals and supervisors.

       Overconfidence occurs when “we overestimate our ability in just about

everything– driving, being able to tell which jokes are funny, distinguishing between

European and U.S. handwriting, and so on” (Ibid). I think that overconfidence affects

about 75% of our employees, the other 25% know their limits and realize that their jokes

are not that funny. Overconfidence in the work place can get employees injured and

killed. Sometimes I insert this statistic into training sessions to get employees attention,

I‟ll say: “according to the Bureau of Labor Statistics, in the state of California, in 2008

there were 465 occupational fatalities, 91% of the fatalities were men and versus 9% for

women; as applied to men and women the leading cause of occupational fatalities was

attributed to 36% transportation incidents, 20% assaults and violent acts, 15% contact

with objects and equipment, 15% falls, 10% exposure to harmful substances or

environments, so pay attention this training might save your life” (Unites States

Department of Labor, 2010). Depending on the facilities statistics for the past few years I

might also tell them that statistically their facility has less number of accidents per year;

however, the types of accidents are consistent with leading causes of occupational

fatalities. We mitigate against employee overconfidence, as it might make them more

accident prone, with hundreds of different environmental, health, and safety training
HARVARD DECISION MAKING                                                                    26


courses. We balance a fine line between supporting the employees and protecting the

interests of management and the local government.

        Hayashi (2001) imparts some final observations on how to tap into one‟s

intuitions:

    (1) Self-check (Ibid, p. 186). It can be helpful for decision makers to reflect on their

        actions and reflect on what went right, what went wrong, what‟s an alternate

        solution, etc. and perhaps the answer or decision is worked out.

    (2) Feedback (Ibid). Before a decision is made or after a decision is made, decision

        makers can benefit from having another qualified decision maker review the plan

        or situation and evaluate from their perspective; with more information or data on

        the course of action a decision or plan can be modified, tweaked, or left alone.

    (3) Quick decision making (Ibid). For the decision maker that acknowledges that half

        of their decisions are wrong, the task is to quickly acknowledge the decision as

        wrong, do not make the same mistake again, and over time have more right

        decisions than wrong ones.

    (4) Don‟t fall in love with your decisions / everything‟s fluid (Ibid). Leaders make

        decisions, ideally these decisions are the right ones to make but if they are not, the

        decision maker needs to let go of the first decision and apply an alternative until

        the right action is achieved.
HARVARD DECISION MAKING                                                                   27


                                       References

Drucker, F., Hammond, J., Keeney, R., Raiffa, H., Etzioni, A., Argyis, C., Stryker, P.,

       Hayashi, A. (2001). Harvard Business Review on Decision Making. Boston, MA:

       Harvard Business School Publishing Corporation.

Unites States Department of Labor. (2010). Fatal Occupational Injuries in California.

       Retrieved from http://www.bls.gov/iif/oshwc/cfoi/tgs/2008/iiffi06.htm on August

       20, 2010.

								
To top