Management Skills: Analytical Decision Making

The decision space is the environment in which our decision making process operates

Requirements define the elements of a successful outcome

Stakeholders are the people or groups who are involved with or affected by a decision

Risks are events or conditions that could have negative effects upon our decision

Resources enable us to complete our analysis

Constraints limit our decision process or choices

A statement of purpose summarizes the team’s initial findings

Customizations allow the team to adjust the process to match the scale and complexity of the decision

The Norbert's team established objectives, set scope, identified stakeholders, assessed risks, and documented resources and constraints.

The first step in the process is to define the decision space

We seek to identify three to five solutions that appear to be feasible in the context of the requirements

Be open to innovation

The Norbert's team identifies and filters alternatives

Identifying alternatives establishes the parameters for the analysis that follows.

Decision criteria are the measures we will use to help determine which alternative to select

There are three types of criteria - quantitative, qualitative, and binary.

A comparison of attributes of excellent and weak criteria

The next step is to identify a set of criteria that best assesses the alternatives for a decision

Normalization is a technique used to transform data to facilitate rating

The goal of this exercise is to attach the largest weights to the most essential criteria

A decision making effort is more likely to be successful without some of these common errors

Creation of criteria and assignment of criteria weights can be customized to fit the decision scenario

The Norbert's team finalizes their criteria list and sets criteria weights

Criteria are measures used to determine which alternative to select.  Criteria can be prioritized by assigning weights.

Analysis begins with collecting data about each alternative to allow fair assessment of every criterion.

A matrix is used to calculate total scores for each alternative based upon criteria weights and ratings.

A rating indicates the degree to which one alternative addresses one criterion.

Total scores for each alternative are calculated based upon the data entered into the matrix.

The use of a structured decision analysis framework does not free the team from responsibility for the decision.  A common sense review helps ensure the result is fair and backed by the data.

An alternative decision matrix format can be more transparent and easier to understand.

The Norbert's team worked through their analysis and produced a recommendation.

Analysis is the culmination of all the preceding work.  This step yields a recommendation.

It’s not enough to arrive at the correct answer.  You must also be able to explain and justify the team’s recommended alternative.  The aim is to convince the sponsor and other key decision makers that the team’s work is compelling and their conclusions are valid.

A narrative is a document that provides a recap of the decision analysis, factors considered, methods employed, recommendations, and justification.  A presentation is often beneficial, especially when the sponsors or decision makers are unfamiliar with the decision and not inclined to read a document.

An innovative solution invites a clever presentation.

The Norbert's team decided to create a document to memorialize the available options and choices made at each step.

Arriving at the correct answer is only half the battle.  The team must also convince the sponsor that the team’s findings are compelling and their conclusions are valid.  This is done through narratives and presentations.

A decision tree is a tiered graphical representation of the choices that comprise a decision. This technique can help you to structure a series of choices to better understand a complex decision by breaking it into simpler parts.

An influence diagram is a more concise method for defining relationships, structuring decisions, and sharing decision elements.  It is a beneficial tool for the analysis phase of decision making.

Expected value analysis is a technique for calculating the most likely outcome for a series of alternatives.  It helps the analyst cope with uncertainty by quantifying risk and reward associated with different strategies.

Scenario planning is a tool to supplement the decision making process where the analyst defines multiple future narratives that could alter the decision space, considers the implications of each scenario, and then develops strategies to address the most likely scenarios.

These four types of analysis bring additional rigor to your decision processes.