Importance of Decision Making

• Measure

• Regulation

• Influence

Impact

Process

Assess/Understand

Thinking

Perceptual Issues

What Makes Making a (Good) Decision so Difficult?

• Multiple Criteria– conflicting values

• Intangibles– Unknowables, Unmeasurables

• Uncertainty• Consequences

– Long/Short ; Near/Far ; Intended/Unintended• Our Knowledge is Always Incomplete• Our Knowledge is influenced by Perception

What do you see?

What do you see now?

Paris

in the

the Spring

Types of Decisions Managers Make

• Programmed

• Non-Programmed

A company was losing money. Key managers were asked to investigate the

decline in sales• Marketing Manager framed the problem…

– a lack of advertising & promotional support• Sales Manager framed the problem…

– a lack of promotion and distributor support programs• Manufacturing framed the problem…

– inaccurate forecasting by marketing and sales, causing poor production planning

• Finance framed the problem…– budget overruns by all departments and unreliable

forecasts by marketing

Some Decision Traps• (Mis-) Framing

– limiting our questions• Anchoring

– disproportionate wt to 1st info, biasing subsequent thinking• Status Quo

– decisions tend to involve the least change• Confirming Evidence

– use of (only) data that confirms pt of view• Escalation of Commitment

– “throwing good $ after bad”, “avoid being wrong in the past”• Overconfidence

– never doubting what one believes– fear of admitting that you don’t know

Decisions are Made:

• Individually• Individually But With the

Consultation of Others• Group

Group Decision Making

• GroupThink• Debating Group• Ideal Group Process

GroupThink

ConvergentThought

Problem A Conclusion

Discussion& Debate Problem

No Action Decision Process

Ideal Decision Process

Problem Dialogue Discussion Action

Divergent Thinking

Convergent Thinking

Ways of Dealing with Problems• Avoid making a decision

– simply ignore an issue exists

• Reactive in making a decision

– event level mgmt, problems of the day, circumstance directed

• Proactive in making a decision

– anticipate, prevention, problems=opportunity

Ways to Find a Solution• Logical/Rational Thinking

– reductionistic, one-at-a-time, mechanical, memory based

• Intuitive Thinking

– connecting many, relationships, flexible, less reliance on mechanical thinking, creative

Confidence vs UncertaintyD

egre

e of

Con

fiden

ce

Amount of Uncertainty

Types of Problems Managers Face• Structured

– familiar, constant circumstances

• Unstructured

– ambiguity, not logically apparent

• Crises

– isolate and identify real issue, time is short, full information is lacking

Common Mistakes in Problem Solving

• Deciding on the Focus

• Confusing Symptoms for the Problem

• Selecting the Wrong Problem

A Problem Solving Process• Identify & Define the Problem• Analyze the Potential Causes & Gather

Information• Generate Possible Solutions• Evaluate & Select a Course of Action• Implement the Solution• Monitor and Follow Up & If not

solved, return to step 2 above

Given the following symptoms, what is the problem and what is your plan for its resolution?

PersonalFinancialWorries

BalancingWork & Family

Little or norecognitionof achievement

Poor InternalCommunication

PoorLeadership

Burdened w/work hrs & load

Insuff. Resources

Lack ofMgt Support

Co.Politics

What is Creativity?• An Attitude

– willingness to embrace doubt, uncertainty, curious

– willingness to suspend judgment • An Ability

– to generate new ideas, to be playful with ideas– to seek challenge– constructive discontent

• A Process– it takes time, it is not the result of a single

stroke of brilliance

The Creative Process

Preparation Incubation

Elaboration

Evaluation

Insight

Creativity• Preparation

– Knowledge– Non-mechanical thinking

• Incubation & Insight– Unconscious thinking– Intuition– Creative Leap

• Evaluation & Elaboration: Development– Seeking the logic of it all– Reality altering check

Critical vs Creative Thinking

• Analytic• Linear• Objective• Rational• Logical• Convergent• Left Brain

• Generative• Non-Linear• Subjective• Non-Rational• Non-Logical• Divergent• Right Brain

Obstacles to Creativity• Looking for the Right Answers• Trying to be Logical• Strictly following The Rules & Tradition• Avoiding Ambiguity• Having an Expert Mind vs Beginners Mind• Fearing Failure• Forgetting How To Play• Believing “You’re not Creative”• Failure to Express (& Be Playful with) Ideas• Failure to be Open, Flexible & Tolerant to Different

Ideas– prejudice, stereotype thinker, rigid