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@cyetain Decision Economies

Jabe Bloom at LKSE14 - Decision Economies

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In many organizations we examine the output of a system, plan or strategy to determine if it was successful. “Where are we” and “is this where we want to be”, the evaluation of outcomes, is of course a critical to the learning capability of any organization. Unfortunately, a myopic focus on a goal/outcome driven approach has resulted in many organizations not be able to answer a related question “How did we get here?” Organizations who make the effort to be mindful of decisions, and relate those decisions more clearly to outcome become more effective and learn faster than. Jabe Bloom will describe how organizations can be more mindful of, who is making decisions, how decisions are made, the effects of decision fatigue and establishing a Decision Economy to begin valuing and distributing decisions more effectively.

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Page 1: Jabe Bloom at LKSE14 - Decision Economies

@cyetain

Decision Economies

Page 2: Jabe Bloom at LKSE14 - Decision Economies

@cyetain

blog http://jabe.coSend Anonymous Feedback

http://sayat.me/jabebloom

Joshua (Jabe) Bloom

Page 3: Jabe Bloom at LKSE14 - Decision Economies

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#LKSE14

@cyetain

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https://mail.google.com/mail/u/0/?ui=2&ik=0130d003aa&view=att&th=1454b6fdf9da6bbb&attid=0.1.1&disp=emb&zw&atsh=0@cyetain

No man treats a motor car as foolishly as he treats another human being. When the car will not go, he does not attribute its annoying behavior to sin, he does not say, "You are a wicked motorcar, and I shall not give you any more petrol until you go." He attempts to find out what is

wrong and set it right. !

-Bertrand Russell

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What is the Problem?

What Might We Do About it?

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The Problem

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We sail within a vast sphere, ever drifting in uncertainty, driven

from end to end. !

-Blaise Pascal

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Latin decisionem (nominative decision) "a decision, settlement,

agreement"

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to settle a dispute

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decidere "to decide, determine," literally "to cut off,"

from de-"off" (see de-)+caedere "to cut"

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Closure

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Commitment

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Rational Actor

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Rational Choice Theory

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It has been said that man is a rational

animal. All my life I have been searching for evidence which could support this.

-Russell

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Bounded Rationality

limited by; Information access Cognitive abilities

Finite Time

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Biased Rationality

Regular measurable deviation from rational judgement caused by

cognitive or motivational influences

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Jelly Test

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Decision Fatigue

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Let’s Prioritize The Backlog!

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Right Uncertain Wrong

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Right Wrong

Uncertain

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The Problem of Expertise

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Knowledge can only be volunteered it cannot be conscripted.

!We only know what we know when we need to know

it. !

Everything is fragmented !

The way we know things is not the way we report we know things.

!We always know more than we can say, and we will

always say more than we can write down.

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Information, skill and knowledge are embedded in networks and

relationships. !

Individuals, instead of “owning” information, attract, translate and

know how to and where to access to the information that

emerges in the networks around them.

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Peter’s PrincipleIn a hierarchy every employee tends to rise to his

level of incompetence ... in time every post tends to be occupied by an employee who is incompetent to

carry out its duties ... Work is accomplished by those employees who have not yet reached their

level of incompetence.

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Peter’s Corollary

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Box Packing Algorithm

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So Distributed Decision Making Then?

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The Disempowerment

Spiral

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Where & When

Decision Economies &

Real Options

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Economies

An economy or economic system consists of the production, distribution or trade, and consumption of limited goods and services by different agents in a given

geographical location.

http://en.wikipedia.org/wiki/Economy

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Mindful Decisions

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How Many Decisions Can I Make In A Day?

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Start with the noticing when asked to decide

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Interesting Questions

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Why Do You Ask?

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Journal

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Safe Decisions

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Mission Command

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Strategy

Operating

Tactical

Experiment

Task

Quarters

Month

Week

Days

Hours

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What Are You Doing? !

Why?

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Strategy

Operating

Tactical

Experiment

Task

Quarters

Month

Week

Days

Hours

Pop The Why Stack

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Information Arrival Process (time changes everything)

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Ideal Delivery

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Options

Information Arrival

Ideal Delivery

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Start Deadline

Bad Decisions

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Uninformed Speculative

Risk (as Cost of Delay)

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Aleatory Uncertainty!

Intrinsic randomness of phenomenon

Cannot be reduced

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Epistemic Uncertainty

More Information Would Reduce our Uncertainty

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Uncertainty about how to Classify our Uncertainty

!

(it is turtles all the way down)

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PROTIP (for Human Systems Thinkers) !

Human Error is Aleatory !

(systems that assume infallibility of human reason WILL fail)

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Epistemic vs

Pragmatic ActionDAVID KIRSH AND PAUL MAGLIO

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Value Increment

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Pragmatic Value or

Information

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Real Options

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BOUNDING Uncertainty

(I thought you said humans dislike uncertainty?)

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Options expire

Never commit early unless you know why

Options have value

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Obligation vs

a Right (commitment vs option)

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If the time it takes to recover, is greater than the time you can survive, you die.

!

Which means you need more options.

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Converting a Commitment into

an Option

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100% Utilization ==

NO OPTIONS

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Given there are NO other OPTIONS, if you do not have good information

you are about to convert a SPECULATIVE Option into a COMMITMENT

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Additional Options May Allow You to Avoid

Speculative Commitments

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Option 1

Option 2

Option 3

When will we be done?

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Option 1

Option 2

Option 3

When does the Option Expire?

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Estimates are a function of Duration and

Uncertainty (often reduced to a single

variable duration)

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Option 1

Option 2

Option 3

How Much Uncertainty is there?

????

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Decision

Commitment

Option

Pragmatic Action

Epistemic Action

Result

Option Expiration

Success Criteria

Expiration Criteria

Bounds the

Option

Unbounded Uncertainty

Causes Stress

Defer Decision

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Conclusions

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The temporal and social distance between relevant

information and those making decisions impacts the quality, efficiency and timeliness of those decisions

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More Options More Value !

More Time More Information !

More Information & Options Better Decisions

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Be Mindful Of How System

Drives Decision Making

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Bound Uncertainty !

Create Options !

Defer Commitments

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Donald Reinertsen

David Snowden

Chris Matts

Olav Maassen

Troy Magennis

David Anderson

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@cyetainhttp://commitment-thebook.com

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Page 90: Jabe Bloom at LKSE14 - Decision Economies

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blog http://jabe.co

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Joshua (Jabe) Bloom