decision making study material

8/13/2019 Decision Making Study Material

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WORKSHOP

on

DECISION MAKING & PROBLEM SOLVING SKILLS

Dr. Sneh BhardwajYAJNAA

2143, Sector 38-C, ChandigarhMobile : 8699051240 , 0172-2625405

[email protected] !a"naa co#

http://www.yajnaa.com/

http://www.yajnaa.com/



The one who stays in ACTION while in INACTION andin INACTION while in ACTION is the supreme man------The Gita

(The one who stays in ACTION while in INACTION and in INACTION while in ACTION is the supreme person

WHAT IS A DECISION?

!hat it is - According to the dictionary" the #er$ %decide& means %to determine" to end" to resol#e"

to settle and to ma'e up one&s mind&" while the noun %decision& is %the act o settling" ma'ing up

one&s mind&" etc.

!hat it is not - A decision is not allowing e#ents to ta'e their course willy-nilly. I you did" an

outcome would still occur - $ut one not in luenced or decided upon with due regard to the

surrounding circumstances. )uch an outcome represents an ina$ility or lac' o desire to analyse

and reach a conclusion.

*ecision-ma'ing is a$out deli$erately opting or one choice rom two or more" proacti#ely to

optimise a situation or outcome and not let it happen $y de ault. It is also a$out trying to minimise

the element o chance or ris' in li e.

2




DECISION MAKING

Decision-making is the selection of an option over others (which could include no

action) under conditions that are uncertain which exposes you to a risk in order to

reach a specified goal, objective or outcome. here must be a choice and it must be

taken proactively, otherwise it is merely an occurrence.

he process involves getting from an identified need to a decision that addresses the

need and the real issues. !t the same time it is necessary to minimise the risks of the

issues and the conse"uences of the decision.

+




The 'ey issue is how to handle hard decisions to ensure they are ta'en as painlessly as possi$le.

This re uires the use o a ro$ust" consistent approach and an appropriate le#el o detail - essential

to ensure that ris' is minimised or" at least" understood.

CORRECT DECISION MAKING ! robust, consistent approach to decision-making, together with the re"uired supporting

analysis, will deal with the complexities

#) by providing a structure within which the issues can be organised (human beings have

real problems dealing with five or more variables)

$) %dentify uncertainty and

&) then present this in a structured and helpful manner,

') deal with a multiplicity of objectives and trade-offs ,

) analyse different perspectives and

) facilitate logical presentation, in order to obtain consensus*decisions, especially whereseveral opinions are present ,

1




+) encourage flexibility to change as circumstances alter and which may invalidate or

fundamentally alter the appropriateness of the decision

) provide for evaluation.

DECISION MAKING PROCESS

A) Define the proble The decision-ma'ing process $egins when real pro$lem is identi ied. One way that a manager can

help determine the true pro$lem in a situation is $y identi ying the pro$lem separately rom its

symptoms.

TA!"

E #

S$ pto % &n' Their

Re&l C&(%e%

S$ pto % n'erl$in* Proble

6ow pro its and/or declining sales 7oor mar'et research

6ow morale 6ac' o communication $etween management andsu$ordinates

8igh employee turno#er 0ate o pay too low9 :o$ design not suita$le

8igh rate o a$senteeism ;mployees $elie#e that they are not #alued

<




!) I'entif$ Re%o(r+e% A,&il&ble

;#ery$ody wants to ma'e the $est decisions. To do so" managers need to ha#e the ideal resources= in ormation" time" personnel" e uipment" and supplies = and identi y any limiting actors to

ma'e the $est decision possi$le with the in ormation" resources" and time a#aila$le.

C) De,elop potenti&l &ltern&ti,e% Time pressures re uently cause us to mo#e orward a ter considering only the irst or most

o$#ious answers. 8owe#er" success ul pro$lem sol#ing re uires thorough e,amination o the

challenge" and a uic' answer may not result in a permanent solution.

D) An&l$-e the &ltern&ti,e%• *etermine the pros and cons o each alternati#e.

• 7er orm a cost-$ene it analysis or each alternati#e.

>




• !eight each actor&s importance in the decision" ran'ing each alternati#e relati#e to its a$ility

to meet each actor. 0egardless o the method used" one needs to e#aluate each alternati#e in

terms o• .e&%ibilit$ = Can it $e done4• Effe+ti,ene%% = 8ow well does it resol#e the pro$lem situation4• Con%e/(en+e% = !hat will $e its costs ( inancial and non inancial to the organi?ation4

E) Sele+t the be%t &ltern&ti,eA ter one has analy?ed all the alternati#es" one must decide on the $est one. The $est alternati#e

is the one that produces the most ad#antages and the ewest serious disad#antages. )ometimes"

the selection process can $e airly straight orward" such as the alternati#e with the most pros and

ewest cons. Other times" the optimal solution is a com$ination o se#eral alternati#es.

.) I ple ent the 'e+i%ion7ositi#e results must ollow decisions. ;#eryone in#ol#ed with the decision must 'now his or her

role in ensuring a success ul outcome.




SE0EN KEY STEPS

There are se#en 'ey steps to decision-ma'ingB

# Define correctly the real decision to $e made

1 )n'er%t&n' the conte,t in which the decision needs to $e made

2 I'entif$ the options

3 E,&l(&te the conse uences o each option

4 Prioriti%e the options and choose one

5 Re,ie6 the decision ta'en (possi$le re-wor'

7 T&8e &+tion to e ect the decision

nless step > is ta'en then no real decision has $een made and it has $een an e,ercise

in utility.

ou must" o course" li#e with the conse uences o the decision. I( " howe#er" you ha#e

ollowed a logical process" as outlined a$o#e" then you would e,pect these to $e within

your tolerances.

D




A FRAMEWORK FOR DECISION-MAKING

SEVEN KEY STEPS

E0A" ATION SYSTEM

CONSEQUENCES

2 3

4

5 7#

1

DD




Ongoing actions need to $e monitored. An e#aluation system should pro#ide eed$ac' on how well

the decision is $eing implemented" what the results are" and what ad:ustments are necessary to get

the results that were intended when the solution was chosen.• W&% the 6ron* &ltern&ti,e %ele+te'? I so" one o the other alternati#es generated in the

decision-ma'ing process may $e a wiser choice.• W&% the +orre+t &ltern&ti,e %ele+te'9 b(t i ple ente' i properl$? I so" a manager

should ocus attention solely on the implementation step to ensure that the chosen

alternati#e is implemented success ully.• W&% the ori*in&l proble i'entifie' in+orre+tl$? I so" the decision-ma'ing process needs

to $egin again" starting with a re#ised identi ication step.

H&% the i ple ente' &ltern&ti,e been *i,en eno(*h ti e to be %(++e%%f(l? I not" a

manager should gi#e the process more time and re-e#aluate at a later date.

DECISION MAKING STY"ES

D2




De o+r&ti+ decision ma'ing is when the leader gi#es up ownership and control o a decision and

allows the group to #ote. Ea:ority #ote will decide the action.

A(to+r&ti+ decision ma'ing is when the leader maintains total control and ownership o thedecision. The leader is also completely responsi$le or the good or $ad outcome as a result o the

decision. The leader does not as' or any suggestions or ideas rom outside sources and decides

rom his or her own internal in ormation and perception o the situation.

Colle+ti,e : P&rti+ip&ti,e decision ma'ing is when the leader in#ol#es the mem$ers o the

organi?ation. Other perspecti#es o the situation are disco#ered $ecause the leader deli$erately

as's and encourages others to participate $y gi#ing their ideas" perceptions" 'nowledge" andin ormation concerning the decision. The leader maintains total control o the decision $ecause"

although outside in ormation is considered" the leader alone decides.

Con%en%(% decision ma'ing is when the leader gi#es up total control o the decision. The complete

group is totally in#ol#ed in the decision. The leader is not indi#idually responsi$le or the outcome.

The complete organi?ation or group is now responsi$le or the outcome.

D+




DECISION MAKING TECHNI; ESGRO P DECISION MAKING

!RAIN STROMINGOne o the $est 'nown methods or de#eloping alternati#es is through br&in%tor in*9 where a

group wor's together to generate ideas and alternati#e solutions.• Con+entr&te on the proble &t h&n'< This rule 'eeps the discussion #ery speci ic and

a#oids the groupFs tendency to address the e#ents leading up to the current pro$lem.• Entert&in &ll i'e&%< In act" the more ideas that come up" the $etter. In other words" there

are no $ad ideas. ;ncouragement o the group to reely o er all thoughts on the su$:ect is

important. 7articipants should $e encouraged to present ideas no matter how ridiculous they seem"

$ecause such ideas may spar' a creati#e thought on the part o someone else.• Refr&in fro &llo6in* e ber% to e,&l(&te other%= i'e&% on the %pot< All :udgments

should $e de erred until all thoughts are presented" and the group concurs on the $est ideas.

D5




NOMINA" GRO P TECHNI; ENo in&l *ro(p te+hni/(e< This method in#ol#es

D the use o a highly structured meeting"2 complete with an agenda" and

+ restricts discussion or interpersonal communication during the decision-ma'ing process.

5 it ensures that e#ery group mem$er has e ual input in the decision-ma'ing process.

1 It also a#oids some o the pit alls"

a such as pressure to con orm

$ group dominance" hostility" and con lict" that can plague a more interacti#e" spontaneous"unstructured orum such as $rainstorming.

DE"PHI TECHNI; E!ith this techni ue" participants ne#er meet" $ut a group leader uses written uestionnaires to

conduct the decision ma'ing.

SI> THINKING HATS

D1




I you loo' at a pro$lem with the F)i, Thin'ing 8atsF techni ue" then you will sol#e it using all approaches.

our decisions and plans will mi, am$ition" s'ill in e,ecution" pu$lic sensiti#ity" creati#ity and good

contingency planning.

WHITE HAT

!ith this thin'ing hat you ocus on the data a#aila$le. 6oo' at the in ormation you ha#e" and see what you

can learn rom it. 6oo' or gaps in your 'nowledge" and either try to ill them or ta'e account o them.• This is where you analy?e past trends" and try to e,trapolate rom historical data.

RED HAT

F!earingF the red hat" you loo' at pro$lems using intuition" gut reaction" and emotion. Also try to thin' how

other people will react emotionally. Try to understand the responses o people who do not ully 'now your

reasoning.

!"ACK HAT

sing $lac' hat thin'ing" loo' at all the $ad points o the decision. 6oo' at it cautiously and de ensi#ely. Try

to see why it might not wor'. This is important $ecause it highlights the wea' points in a plan. It allows you

to eliminate them" alter them" or prepare contingency plans to counter them.

3lac' 8at thin'ing helps to ma'e your plans FtougherF and more resilient. It can also help you to spot atal

laws and ris's $e ore you em$ar' on a course o action. 3lac' 8at thin'ing is one o the real $ene its o

this techni ue" as many success ul people get so used to thin'ing positi#ely that o ten they cannot see

pro$lems in ad#ance. This lea#es them under-prepared or di iculties.

D<




YE""OW HAT

The yellow hat helps you to thin' positi#ely. It is the optimistic #iewpoint that helps you to see all the

$ene its o the decision and the #alue in it. ellow 8at thin'ing helps you to 'eep going when e#erything

loo's gloomy and di icult.

GREEN HAT

The Green 8at stands or creati#ity. This is where you can de#elop creati#e solutions to a pro$lem. It is a

reewheeling way o thin'ing" in which there is little criticism o ideas.

!" E HAT

The 3lue 8at stands or process control. This is the hat worn $y people chairing meetings. !hen runninginto di iculties $ecause ideas are running dry" they may direct acti#ity into Green 8at thin'ing. !hen

contingency plans are needed" they will as' or 3lac' 8at thin'ing" etc.

GRO P DYNAMICS

D>




D




GRO P DYNAMICS

There are se#eral actors thata ect the e iciency o groups.

The $alance $etween these(actors will determine thegroup&s e ecti#eness.

In large groups interaction$etween mem$ers decreases" leadership $ecomes moredominant and solutions tend to$e $ased on politics rather than analysis.

O

Composi t ion N o rms G # a lu es

Core The group de#ol#es into su$-groups around a core.Eem$ers on the ringe contri$ute little and outlierse ecti#ely withdraw .

D



GRO P DYNAMICS

To o$tain a decision rom a group you must understand each o its mem$ers and the rational"

emotional and political arguments that will con#ince them.

;ach one will as' %what&s in it or me and how can this ad#ance my personal am$ition or my

status within the group/organisation4& 6ac' o a satis actory answer will result in the decision

$eing re:ected" either o#ertly or" more li'ely" co#ertly. An o#ert re:ection can at least $e dealt

with. A co#ert one is pro$a$ly more damaging $ecause the decision is opposed tacitl y .

ou must carry a ma:ority o the group or at least the 'ey decision-ma'ers who will out-#ote the

rest.



INDI0ID A" DECISION MAKING

PARETO ANA"YSIS

SING THE @ 1@ R "E TO PRIORITIBE7areto Analysis is a simple techni ue or prioriti?ing possi$le changes $y identi ying the pro$lems

that will $e resol#ed $y ma'ing these changes. 3y using this approach" you can prioriti?e the

indi#idual changes that will most impro#e the situation. 7areto Analysis uses the 7areto 7rinciple H

also 'nown as the /2 0ule H which is the idea that 2 J o causes generate J o results.!ith this tool" weFre trying to ind the 2 J o wor' that will generate J o the results that doing

all o the wor' would deli#er.

STEP # IDENTI.Y AND "IST PRO!"EMS

Kirstly" write a list o all o the pro$lems that you need to resol#e. !here possi$le" tal' to clients

and team mem$ers to get their input" and draw on sur#eys" helpdes' logs and suchli'e" where

these are a#aila$le.STEP 1 IDENTI.Y THE ROOT CASE O. EACH PRO!"EM

Kor each pro$lem" identi y its undamental cause.



STEP 2 SCORE PRO!"EMS

Now you need to score each pro$lem. The scoring method you use depends on the sort o pro$lemyouFre trying to sol#e.

STEP 3 GROP PRO!"EMS TOGETHER !Y ROOT CASE

Ne,t" group pro$lems together $y cause. Kor e,ample" i three o your pro$lems are caused $y

lac' o sta " put these in the same group.

STEP 4 ADD P THE SCORES .OR EACH GROP

ou can now add up the scores or each cause group. The group with the top score is your highestpriority" and the group with the lowest score is your lowest priority.

STEP 5 TAKE ACTION

Now you need to deal with the causes o your pro$lems" dealing with your top-priority pro$lem" or

group o pro$lems" irst.

PARETO ANA"YSIS E>AMP"E



Larun has ta'en o#er a ailing ser#ice center" with a host o pro$lems that need resol#ing. 8is

o$:ecti#e is to increase o#erall customer satis action.

8e decides to score each pro$lem $y the num$er o complaints that the center has recei#ed or

each one. (In the ta$le $elow" the second column shows the pro$lems he has listed in step D

a$o#e" the third column shows the underlying causes identi ied in step 2" and the ourth column

shows the num$er o complaints a$out each column identi ied in step +.

D7hones arenFt answered uic'lyenough.

Too ew ser#ice center sta . D1

2)ta seem distracted and underpressure.

Too ew ser#ice center sta . <

+

;ngineers donFt appear to $e

well organi?ed. They needsecond #isits to $ring e,traparts.

7oor organi?ation andpreparation.

5



5

;ngineers donFt 'now what timetheyFll arri#e. This means thatcustomers may ha#e to $e in allday or an engineer to #isit.

7oor organi?ation andpreparation.

2

1)er#ice center sta donFtalways seem to 'now whattheyFre doing.

6ac' o training. +

<

!hen engineers #isit" thecustomer inds that the pro$lemcould ha#e $een sol#ed o#er the

phone.

6ac' o training. 2D

Larun then groups pro$lems together (steps 5 and 1 . 8e scores each group $y the num$er o

complaints" and orders the list as ollowsB

D. "&+8 of tr&inin* (items 1 and < H 1D complaints.

2. Too fe6 %er,i+e +enter %t&ff (items D and 52 H 2D complaints.

+. Poor or*&ni-&tion &n' prep&r&tion (items + and 5 H < complaints.



SIMP"E DECISION TREES

A decision tree maps the chain o decisions. Consider" or e,ample" the uestion o whetherto wear a coat or not. The %map& with outcomes would loo' li'e thisB

This can $e modelled using pro$a$ilities"$ut there are rulesB each option must $e linear" the $ranches must $e mutually e,clusi#e (either

it rains or itdoesn&t

and alloptions

must $erepresented.

INDI0ID)A" 0S GRO P DECISION:MAKING



The ma:or di erences in the way that indi#iduals and groups ma'e decisions are contrasted$elowB

INDIVID AL GRO P DECISION MAKING

Con$en$%$ &ot a 'roble# &eed$ to be gained(i)ergent *iew$ &ot 'o$$ible +$%all! 're$ent b%t #%$t be

allowed e,'re$$ionide-ranging e,'erience$ .i#ited to indi)id%al/$ own M%lti-0aceted(i$c%$$ion (oe$ not ha''en &eed$ to be 0acilitated1oal$ +nit! o0 '%r'o$e Man! re2%iring co#'ro#i$e$

SOME DECISION:MAKING ERRORS0esearch has identi ied a ew #ery common errors or points to watch out or when ma'ing

decisions" in particularB

M H&%te - not to $e con(used with speed. A decision is made $e(ore the acts are a#aila$le

or without ta'ing the acts into account. Decide in haste - regret at leisure.



M N&rro6 per%pe+ti,e - o ten results in addressing the wrong issue $ecause the real issue

has $een pre-:udged or con ined within a ramewor' o analysis that is inappropriate.

M O,er:+onfi'en+e - either in the decision itsel or" more commonly" in the understanding othe issue and acts.

M R(le%:of:th( b - relying on rough ramewor's or shortcuts or important decisions

instead o carrying out ade uate analysis.

M .ilterin* - screening out unpleasant indings or those that do not support pre-

concei#ed notions or the decision you want to ma'e.

M C(**lin* - lac' o analytical ramewor' and" there ore" trying to manage many #aria$lesor pieces o in ormation in your head.

SE".: TEST

!hat are the characteristics o a good decision-ma'er4

D



2

+

5

1

Compare your answers with the in ormation on the ollowing pages.

PRO!"EM SO"0ING

7ro$lem sol#ing is a 'ey s'ill" and itFs one that can ma'e a huge di erence to your career. At wor'"

pro$lems are at the center o what many people do e#ery day. ouFre either sol#ing a pro$lem or

a client (internal or e,ternal " supporting those who are sol#ing pro$lems" or disco#ering new

pro$lems to sol#e.



The pro$lems you ace can $e large or small" simple or comple," and easy or di icult to sol#e.

0egardless o the nature o the pro$lems" a undamental part o e#ery managerFs role is indingways to sol#e them. )o" $eing a con ident pro$lem sol#er is really important to your success.

Euch o that con idence comes rom ha#ing a good process to use when approaching a pro$lem.

!ith one" you can sol#e pro$lems uic'ly and e ecti#ely. !ithout one" your solutions may $e

ine ecti#e" or youFll get stuc' and do nothing" with sometimes pain ul conse uences.

PRO!"EM SO"0ING TECHNI; ES

CA SE AND E..ECT ANA"YSIS was de#ised $y 7ro essor aoru Ishi'awa" a pioneer o

uality management" in the D < s. The techni ue was then pu$lished in his D $oo'" Introduction to

uality Control.

Cause and ; ect Analysis was originally de#eloped as a uality control tool" $ut you can use the

techni ue :ust as well in other ways. Kor instance" you can use it to• *isco#er the root cause o a pro$lem.• nco#er $ottlenec's in your processes.

http://www.mindtools.com/pages/article/newTMC_76.htm

http://www.mindtools.com/pages/article/newTMC_76.htm



• Identi y where and why a process isnFt wor'ing.

THE 4 WHYS is a simple pro$lem-sol#ing techni ue that helps you to get to the root o a pro$lem

uic'ly. Eade popular in the D > s $y the Toyota 7roduction )ystem" the 1 !hys strategy in#ol#esloo'ing at any pro$lem and as'ingB !hy4 and !hat caused this pro$lem4

Lery o ten" the answer to the irst why will prompt another why and the answer to the second why

will prompt another and so on9 hence the name the 1 !hys strategy.

3ene its o the 1 !hys includeB• It helps you to uic'ly determine the root cause o a pro$lem.• ItFs simple" and easy to learn and apply.

PDCA CYC"EA popular tool or doing :ust this is the 7lan-*o-Chec'-Act Cycle. This is o ten re erred to as the *eming

Cycle or the *eming !heel a ter its proponent" ! ;dwards *eming.

The our phases in the 7lan-*o-Chec'-Act Cycle in#ol#eB• Pl&n Identi ying and analy?ing the pro$lem.•

Do *e#eloping and testing a potential solution.• Che+8 Eeasuring how e ecti#e the test solution was" and analy?ing whether it could $e impro#ed

in any way.



• A+t Implementing the impro#ed solution ully.

These are shown in Kigure D $elow.

The 7*CA Cycle encourages you to $e methodical in your approach to pro$lem sol#ing and implementing

solutions. Kollow the steps $elow e#ery time to ensure you get the highest uality solution possi$le.

STEP # P"ANKirst" identi y e,actly what your pro$lem is. Ne,t" draw together any other in ormation you need that will

help you start s'etching out solutions.

STEP 1 DO

This phase in#ol#es se#eral acti#itiesB• Generate possi$le solutions.• )elect the $est o these solutions.• Implement a pilot pro:ect on a small scale $asis" with a small group" or in a limited geographical

area" or using some other trial design appropriate to the nature o your pro$lem" product or initiati#e.



STEP 2 CHECK

In this phase" you measure how e ecti#e the pilot solution has $een" and gather together any learnings

rom it that could ma'e it e#en $etter.*epending on the success o the pilot" the num$er o areas or

impro#ement you ha#e identi ied" and the scope o the whole initiati#e" you may decide to repeat the

*o and Chec' phases" incorporating your additional impro#ements.

STEP 3 ACT Now you implement your solution ully. 8owe#er" your use o the 7*CA Cycle doesnFt

necessarily stop there. I you are using the 7*CA or *eming !heel as part o a continuous impro#ement

initiati#e" you need to loop $ac' to the 7lan 7hase ()tep D " and see' out urther areas or impro#ement .

HOW GOOD ARE YOU AT SOLVING PROBLEMS?

Instructions: Kor each statement" clic' the $utton in the column that $est descri$es you. 7lease answer

uestions as you actually are (rather than how you thin' you should $e " and donFt worry i some

uestions seem to score in the Fwrong directionF. !hen you are inished" please clic' the FCalculate Ey

TotalF $utton at the $ottom o the test.

St&te ent Not R&rel$ So e Often 0er$



&t &ll ti e% Often

# Once I choose a solution" I de#elop an implementation plan with the se uenceo e#ents necessary or completion.

1 A ter a solution has $een implemented" I immediately loo' or ways toimpro#e the idea and a#oid uture pro$lems.

2 To a#oid as'ing the wrong uestion" I ta'e care to de ine each pro$lemcare ully $e ore trying to sol#e it.

3 I stri#e to loo' at pro$lems rom di erent perspecti#es and generate multiplesolutions.

4 I try to address the political issues and other conse uences o the change I&mproposing so that others will understand and support my solution.



5 I e#aluate potential solutions care ully and thoroughly against a prede inedstandard.

7 I systematically search or issues that may $ecome pro$lems in the uture.

!hen I decide on a solution" I ma'e it happen H no matter what opposition Imay ace.

I ind that small pro$lems o ten $ecome much $igger in scope" and thus #erydi icult to sol#e.

#@ I as' mysel lots o di erent uestions a$out the nature o the pro$lem.

## A ter my solution is implemented" I rela, and ocus again on my regular

duties.

#1 I ocus on 'eeping current operations running smoothly and hope thatpro$lems don&t appear.

#2 I e#aluate potential solutions as I thin' o them.

#3 !hen I need to ind a solution to a pro$lem" I usually ha#e all o thein ormation I need to sol#e it.

#4 !hen e#aluating solutions" I ta'e time to thin' a$out how I should choose$etween options.

#5 Ea'ing a decision is the end o my pro$lem-sol#ing process.

TOTA" @

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