Decision Making

The process of selecting a choice from a range of possible options , with the goal of achieving a very specific objective.

Principles

1. Objective should be clear
2. Choose who decides and who doesn't
3. Reduce ambiguity and risk
4. Make a choice and make it known
5. Evaluate and adjust based on new information

Prepare -> Decide -> Communicate -> Execute -> Measure and Adjust

Defining the decision :

1. What is the desired outcome?
2. What are the choices we are planning to make?
3. What are the possible choices?
4. What is the timeline?
5. Who will the decision affect?

Decision-Making Styles

1. Autocratic : Small size, High urgency
2. Participatory : Larger decision with higher urgency with bigger impact
3. Democratic : Mid size and low urgency
4. Consensus : No urgency but high impact

Dimensions

1. Urgency
2. Impact Size

Organisations usually have :

1. Decision making templates
2. Business Cases

RACI Matrix

For deciding stakeholders.

1. Responsible
2. Accountable
3. Consulted
4. Informed

Ambiguity

4 states :

1. Highly Predictable
2. Distinct Possibilities
3. Spectrum of Outcomes
4. Complete Unpredictability

Highly predictable

1. Easy to forecas
2. Little incremental input
3. Fewer parties invovled

Typical examples of ambiguity :

1. How will customers receive a change?
2. How many will buy?

Reduce Ambiguity

1. Confirm customer count
2. Run a focus group

Distinct Possibilities

Equal likelihood of n number of outcomes.

Reduce Ambiguity

1. Forecast results
2. Market Research

Spectrum of Outcomes

When there is a lot of variations of outcomes for a particular decision.

Gathering inputs from multiple stakeholders.

Unpredictability

Phased Decision Making for reducing unpredictability:

1. Decide
2. Gather Data
3. Decide

Reduce ambiguity by :

1. Running a pilot
2. Speaking with regulators
3. Analyzing competition
4. Review economic forecast

making a Decision

3 types of decision

1. No downside
2. Favourable odds
3. Going for Broke

Goal of decision making

1. Make the best decision
2. Reduce ambiguity

3 primary method of reducing risk :

1. Involve people into the decision making
2. Take more time
3. Break big decisions into smaller decisions

Questions to ask:

1. How big is this decision
2. How irrevocable is this decision
3. What;s the value of being right?
4. How long do you have to make the decision?
5. What is the cost of waiting?
6. What personal biases will affect the decision?
7. How do I mitigate persoal bias?
8. Who do I need to to involve and how do I involve them?
9. Who needs to know I made a decision, and how to inform them?

Communicate :

1. What the goal was
2. How success will be measured
3. Events that would lead to a reversal

Execution Risks :

1. Passive Aggresive behaviour
2. New information
3. New Events

Measure and Adjust

1. Set clear metrics
2. Resolve sources of uncertainty