Guide to Decision Making Contents  Effective decision making  When do decisions need to be made?  Choose the appropriate strategy  The decision making process  Gather the facts  Identify alternatives  Assess the alternatives  Decide  Helpful hints  Decision making behaviour  Decision making approaches  Consensus decision making  When to use which decision making method  How to conduct a consensus decision making session  Further assistance 2 Effective decision making A major activity of management is the making of decisions. Decisions need to be timely. There are times when a decision has to be made. Even if it turns out not to be the best decision it can be better than not making a decision at all. Decisions often have to be made when there is insufficient information. Decisions involve taking risks. Effective decision making involves gathering what information is known, identifying the options, assessing the risks and making the best decision with the information available in a timely manner. 3 When do decisions need to be made Situations include: • Determining the project strategy/approach • Resolving project issues • Developing estimates • Making purchases • Interviewing and selecting project team members • Selecting external suppliers • Handling disagreements and conflict resolution • Scheduling work and allocating resources to tasks • Managing meetings 4 Choose the appropriate strategy When making a decision it is useful to determine what type of decision it is and the appropriate strategy to follow. Focus time on important decisions, don’t waste time on unimportant decisions. High importance (Risks/Impacts/Costs are major) Low importance (Risks/Impacts/Costs are minor) Urgent decision required No time for detailed analysis, so use considered judgement or consult an expert. A quick decision can be made with minimal analysis. No urgency on making decision Conduct detailed analysis Defer or delegate decision 5 The decision making process Four simple steps: 1. Gather the facts 2. Identify a number of alternatives 3. Assess the alternatives 4. Decide Where quick decisions need to be made, these steps can be done mentally “on the fly” or by one person. When time allows and the decision is important, more people can be involved and a more thorough decision making process used. 6 Gather the facts Guidelines • Write down a statement of what needs to be decided. • Is the decision statement clear and precise? If not refine the statement. • Is the need for the decision a result of an underlying problem, which also needs to be addressed? • Are there assumptions underlying the decision that need to be clarified and possibly challenged? • Is the decision part of a bigger decision that needs to be made, or can this decision be decomposed into smaller decisions? 7 Identify alternatives Guidelines • Identify as many alternatives as possible. • Use brainstorming if appropriate. • Do not filter out alternative options at this stage - assume they can all be made to work. • When you have generated lots of ideas, consider each one to see if it is a viable alternative. • Shortlist the viable alternatives. 8 Assess the alternatives Guidelines • Write down the pros and cons of each alternative. • Identify the risks associated with each alternative. • Determine the impact of each alternative on other areas of the organisation. Consider the big picture. • Review the alternatives to determine if there is clearly a preferable choice. 9 Decide Guidelines • Select the best alternative from those available. • Consider your “gut feel”. Instincts can often be right. • If the best alternative is not obvious draw up a table for the options. List the attributes that the options are to be assessed on. Assign points to each (see example below) • Make the decision and take action. Attribute Repair option Cost 2 Warranty 1 Expected useful life 1 Risk 1 Functionality 0 Total 5 Replace Comments option Repair is a much cheaper 0 option Full warranty if replace, partial 2 only if repair Extended by repair, but not as 2 long as if new Repair could damage other 2 components, new is less risky Replacement has more 1 features. 7 Replace is better option overall. 10 Helpful hints  Don’t: – Make assumptions – Procrastinate – Jump to conclusions – Make uninformed decisions – Favour one decision prior to gathering the facts and evaluating the alternatives – Allow only technical people to make the decisions – Attempt to make a decision in isolation of the context – Let emotion override objectivity  Do: – Clearly identify the decision to be made – Involve people qualified to help in the decision making – Identify the context of the decision (the bigger picture) – Identify all alternatives – Assess each alternative – Assess the risks – Consider your “gut feel” – Make the decision and stick to it 11 Decision making behaviour People tend to adopt a particular decision making approach as a result of factors such as: • • • • • • their own personality their current mood the organisational culture the personality of the person/people they are dealing with the nature of the relationship they have with the people they are dealing with time pressure and perceived level of stress Being aware of these influences can result in better decision making, by adopting the best decision making approach for each situation. 12 Decision making approaches Approaches* to decision making situations: • Withdrawing: holding off making the decision. • Smoothing: focusing on areas of agreement and ignoring areas of difference. • Compromising: trying to come up with a decision that provides some degree of satisfaction for all parties. • Confronting/problem solving: working through the issues. • Forcing: executing a particular decision knowing agreement has not been reached. *Adapted from D Billows, Project Manager’s KnowledgeBase, 2nd edition, 2004, The Hampton Group. 13 Decision making approaches Skilled project managers and business analysts select the best approach appropriate to the situation. Withdrawing: • Withdraw to gather more information and perspective • Only a stop gap measure • Useful in “cooling down” an overheated situation • Taking time out (“sleep on it”) before final decision Smoothing: • Relationship focused rather than solution focused • Avoids dealing with the issues • Can be useful in reducing the emotional tension where the decision is of low importance. • Does not provide a long-term solution 14 Decision making approaches Compromising: • Bargaining to get an acceptable agreement • Falls short of the best decision • Can be useful in resolving negotiation deadlocks Confronting/problem solving: • Direct approach • Identifies alternatives and works through the issues • Time-consuming • Most likely method to develop the best solution Forcing: • Used when an urgent decision is required or as a last resort • Necessary for situations when decision making is blocked • May result in reluctance in execution of decision if not handled well. 15 Consensus decision making Consensus decision making is the process of involving a group of stakeholders in the making of a decision such that even though some of the participants may not agree with the decision that is made, they all accept the decision. Consensus decision making is more time-consuming than unilateral decision making, but does have the added benefit of building commitment to the decision that is made. Consensus decision making should make use of the confronting/problem solving approach and avoid resorting to compromising or forcing. 16 When to use consensus decision making Consensus Unilateral • • • • • Suggestions of alternatives are needed The decision can have a significant impact on the team The team need to action the decision • • Decision is minor or urgent Does not affect the overall team There are issues of confidentiality There is sufficient time to organise a meeting to work through the decision 17 How to conduct a consensus decision making session… * 1. Provide a brief of what decision needs to be made, and what information is already available. Gather additional facts. 2. Identify the alternatives. 3. Assess the alternatives, allowing all opinions and concerns to be raised. Use a round robin* technique. 4. Identify common areas of agreement 5. Identify the differences and work through them 6. Measure consensus** 7. State the final agreed-upon decision. Round robin is where each of the participants in a meeting is asked in turn for their opinion. It ensures that the quieter members of the group have a chance to express their views. ** Consensus can be measured by people raising one hand and showing the number of fingers to indicate level of agreement, from one finger for low level of consensus through to open hand for full consensus. Do not hold a vote, because this splits the team into winners and losers. 18 Further assistance For additional supporting guides see  Guide to Problem Solving  Guide to Brainstorming 19