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Choosing. Basic Decision Making Model. Recognize a problem or dm situation Frame the problem/decision (objectives, constraints, factors, priorities) Generate alternatives Evaluate & choose Implement & evaluate results (iterate) Stabilize & learn from. Choosing.

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  1. Choosing

  2. Basic Decision Making Model • Recognize a problem or dm situation • Frame the problem/decision (objectives, constraints, factors, priorities) • Generate alternatives • Evaluate & choose • Implement & evaluate results (iterate) • Stabilize & learn from

  3. Choosing • Important to have a good frame first, including objectives and constraints • Good to have a rich range of creative alternatives • Very important to minimize judgmental biases & mental locks, both in generating alternatives & in evaluating them

  4. 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

  5. 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 & inferences • Recognize & reduce biases & blocks/locks

  6. 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 appropriate • Sometimes, intuitive decisions work (but beware of “fire, ready, aim” DM)

  7. 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

  8. Managing Factors Affecting Decision Making & Creativity

  9. Some Factors Influencing Decisions • Type of decision • Urgency, pressure, constraints • Attributes of environment • Uncertainty, risk • Complexity, ambiguity • Conflict

  10. 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 • Ethics

  11. Visualization

  12. Visualization • 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…

  13. 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

  14. 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 positively • Experience it, not observe or think about it • With input to all senses: sight, hear, smell, feel, taste

  15. 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

  16. 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

  17. Judgmental Biases • Selective perception • Impression effects • Framing & presentation effects • Escalation of commitment • Categorization effects

  18. 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

  19. Judgmental Biases -2 • Impression effects • Halo effects • Primacy and recency effects

  20. 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 presentation • Moot if presentations of two sides & the decision are together (although individual listeners can vary in their ways of taking in information)

  21. 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

  22. 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

  23. 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 busy.

  24. 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 mistake • Avoid loss of "face" & political influence • More intense when we feel personally responsible for initial decision

  25. Escalation of Commitment: • Some suggestions: • Set limits in advance and stick to them • Share personal responsibility for original decision • Do not include unrecoverable past costs in evaluating future costs

  26. Judgmental Biases - 5 • Categorization • Representativeness • Stereotyping • 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

  27. Judgmental Biases • Selective perception • Impression effects • Framing & presentation effects • Escalation of commitment • Categorization effects

  28. 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

  29. Implementation

  30. Implementation • 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.”

  31. Any implementation plan needs to answer: • What? • How? • Who? • When? • Where? • Why (are we doing it this way)?

  32. Consider, when identifying barriers & action steps: • Resources • Support • Reward systems • Timing • Monitoring & controlling • Culture

  33. 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

  34. Stakeholder Exercise • TBD

  35. Case 4, Implementation Disaster • Brief summary? • Questions at end: • Critique John's implementation. • 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? • Discuss the advantages and disadvantages of continuing to use the quality circle technique in the Fairlee plant, given the events that have already occurred. • Recommend a course of action for John Stevens now that his quality ­circle experiment is in trouble. Explain your reasoning.

  36. Next Time • Mental locks 6, 7, 8 (read Oech sections) • Perceptions of risk (see Notes on DM Section 5)

  37. Perceptions of Risk Affect Decision Making

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