Robust DecisionsRobust Decisions

Transforming Business

Through Sound Decisions

Transforming Business

Through Sound Decisions

Why Is It Difficult to Make Good Decisions?

Why Is It Difficult to Make Good Decisions?

Uncertainty Increasing complexity Incomplete and evolving data Dynamic business conditions Organizational barriers Poorly understood

information Widely dispersed teams

Uncertainty Increasing complexity Incomplete and evolving data Dynamic business conditions Organizational barriers Poorly understood

information Widely dispersed teams

How Much Do Bad Decisions Cost?

How Much Do Bad Decisions Cost?

Lost Time Lost revenue Reduced productivity Low morale Lost market share Worse…?

Lost Time Lost revenue Reduced productivity Low morale Lost market share Worse…?

50% of Decisions Fail50% of Decisions Fail “Why Decisions Fail” Paul Nutt, 2002

400 decisions made by senior managers Half of these decisions failed Failure: The action taken was not in effect 2 years later

Three classes of “blunders” Two out of every three decisions were made with failure

prone practices. Premature commitments, jumping on first idea – a key cause

of failure People spend time and money on the wrong things

Many decisions are actually efforts to justify vs. evaluation to select the best possible alternative.

“Why Decisions Fail” Paul Nutt, 2002 400 decisions made by senior managers Half of these decisions failed Failure: The action taken was not in effect 2 years later

Three classes of “blunders” Two out of every three decisions were made with failure

prone practices. Premature commitments, jumping on first idea – a key cause

of failure People spend time and money on the wrong things

Many decisions are actually efforts to justify vs. evaluation to select the best possible alternative.

Decision Making ProcessesDecision Making Processes

Understand the Problem (Framing) Clarify the Issue Generate Alternatives Develop Criteria

Evaluate alternatives relative to the Criteria

Fuse evaluation results to develop decision measures

Stakeholders and decision-makers

Decide what to do next Work to gain consensus Reduce uncertainty Refine Criteria Refine Alternatives Choose an alternative and document the deliberation and decision

Move to next issue

Decisions are a process, not an event!

Pugh’s Method, Kepner Tregoe, Multi-Attribute Utility Theory (MAUT)Pugh’s Method, Kepner Tregoe, Multi-Attribute Utility Theory (MAUT)

“The Mechanical Design Process” 3rd edition, David G. Ullman, McGraw Hill, 2003

Decision matrix

Confidence vendor meets criterion5 = very high1 = very low

Alternatives

Wt. Vendor 1 Vendor 3 Vendor 4

Cr i

t e r i a

Cost .3 4 4 4

Response time .17 3 3 5

Training time .17 2 4 5

Ease of use .17 1 4 4

Strong team .1 3 4 2

Team experience .1 3 4 2

Total 1.0 16 23 22

Weighted total 2.8 3.8 3.9

Decision matrix, weaknesses

• Uncertainty not addressed

• Incomplete information excluded

• Evaluation results inconsistently represented

(How do numbers in the matrix tie to the qualitative and

quantitative evaluation results?)

• Little guidance on what-to-do-next

• Decision risk not represented

• Team members’ evaluations not combined

How Methods Fit into ProcessesHow Methods Fit into Processes

Evaluation• Simulation• Testing• Prior Knowledge• Opinion

Criteria• QFD -Quality Function

Deployment• Doors• Specs

Alternatives• TRIZ• Morphologies• Portfolios

Bayesian Team Support• Information fusion• What-to-do-next analysis• Satisfaction and risk analysis• Decision capture tool• Decision management platform

UncertainEvolvingIncompleteConflicting

UncertainEvolvingIncompleteConflicting

UncertainEvolvingIncompleteConflicting

A Well Managed Decision is RobustA Well Managed Decision is Robust

A robust decision: Looks good later Has customer and team buy-in Is as insensitive to uncertainties as possible Was made with known anticipated

satisfaction and risk

A robust decision: Looks good later Has customer and team buy-in Is as insensitive to uncertainties as possible Was made with known anticipated

satisfaction and risk

Decision Making w/ Decision Making w/

The Accord™ Decision Making software solution uniquely supports BTS by leveraging powerful mathematical algorithms that cannot be handled manually. Factors in both Quantitative and Qualitative input Displays results from each person’s point of view Calculates the Risks Identifies what steps might improve the decision

process

The Accord™ Decision Making software solution uniquely supports BTS by leveraging powerful mathematical algorithms that cannot be handled manually. Factors in both Quantitative and Qualitative input Displays results from each person’s point of view Calculates the Risks Identifies what steps might improve the decision

process

- One-screen

- Graphical Interface

- Provides structure

- Instant Feedback

- Problem visualization

- One-screen

- Graphical Interface

- Provides structure

- Instant Feedback

- Problem visualization

Use Scenario (Accord™ Network)Use Scenario (Accord™ Network)

Issue owner

Consultant, New York City

Analyst, London

Engineer, on site

1. Identify alternatives and criteria and saves them on the server database. Has administrative oversight/control

3. Interpret analysis results

2. Team evaluates information. Results saved to server database

4. Team refines information at owners’ request.Server

5. Report, document, and reuse results and process.

Database

1.

Decision Management application areasDecision Management application areas

• Concept Selection Concept Selection

• Product DevelopmentProduct Development

• Process DesignProcess Design

• Process ImprovementProcess Improvement

• Project ManagementProject Management

• IT Portfolio ManagementIT Portfolio Management

• Proposal EvaluationProposal Evaluation

• Business StrategyBusiness Strategy

• Hiring/Review ProcessHiring/Review Process

Decision Making at Boeing, Space and Communications

Division

Decision Making at Boeing, Space and Communications

Division Project Decision Needed: Select a Delta Rocket nozzle modification to propose in an uncertain environment.

Unrefined information: some even qualitative Conflicting information: evaluation and importance varies

across team members Evolving information: problem is changing with time Incomplete information: evaluation is incomplete

Project Decision Needed: Select a Delta Rocket nozzle modification to propose in an uncertain environment.

Unrefined information: some even qualitative Conflicting information: evaluation and importance varies

across team members Evolving information: problem is changing with time Incomplete information: evaluation is incomplete

Ability to manage uncertainty of knowledge Increases confidence in decisions Helps target areas for risk mitigation

Significant potential time saving due to lowering the risk of repeating a design cycle in the development process.

Ability to manage strong personalities Facilitates team consensus

Allows productive discussion of different views

Ability to manage uncertainty of knowledge Increases confidence in decisions Helps target areas for risk mitigation

Significant potential time saving due to lowering the risk of repeating a design cycle in the development process.

Ability to manage strong personalities Facilitates team consensus

Allows productive discussion of different views

Boeing’s Benefits

Who Can Benefit?Who Can Benefit?

Major (<1000 employee) organizations

Geographically dispersed teams Highly competitive and fast

moving industries Mid-to-senior managers in those

organizations making mission-critical decisions

Major (<1000 employee) organizations

Geographically dispersed teams Highly competitive and fast

moving industries Mid-to-senior managers in those

organizations making mission-critical decisions

How Will They Benefit?How Will They Benefit?

Improve your teams’ performance Manage organizational uncertainty and doubt Empower the decision makers in the

organization Transform difficult processes into

well-structured Re-use, review of

decisions Build accountability

Improve your teams’ performance Manage organizational uncertainty and doubt Empower the decision makers in the

organization Transform difficult processes into

well-structured Re-use, review of

decisions Build accountability

How Do I Find Out More?How Do I Find Out More?

Visit: www.robustdecisions.com Contact: Tom Satterley 215-396-7332 Arrange for a Consultation/Demo Try Accord for 30 days with no risk

Visit: www.robustdecisions.com Contact: Tom Satterley 215-396-7332 Arrange for a Consultation/Demo Try Accord for 30 days with no risk