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Decision AnalysisDecision Analysisbyby

Dr. AADr. AA

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Man decides based on what he believes…

Man believes what he want to believe…

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Decision Analysis

1. Clarify purpose1. Clarify purposeState the decisionState the decisionDevelop objectivesDevelop objectivesClassify objectives into MUST and WANTClassify objectives into MUST and WANTWeigh the Wants Weigh the Wants

2. Evaluate Alternatives2. Evaluate AlternativesGenerate AlternativesGenerate AlternativesScreen alternatives against the MUSTsScreen alternatives against the MUSTsCompare alternatives against the WANTsCompare alternatives against the WANTs

3. Assess Risks3. Assess RisksIdentify adverse consequencesIdentify adverse consequences

4. Make Decision4. Make DecisionMake the best balanced choiceMake the best balanced choice

A systematic A systematic process for process for

making making

a choicea choice

To balance To balance benefits and benefits and

risksrisks

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State the Decision

AskAskWhat do we need to decideWhat do we need to decide

What are we trying to doWhat are we trying to do

Write a short statement that includesWrite a short statement that includesChoice of wordsChoice of words

ResultResult

1 or 2 key modifiers1 or 2 key modifiers

Short statement Short statement describing the describing the

intended result of a intended result of a decisiondecision

To keep To keep decision decision

makers on makers on tracktrack

ClarifyPurpose

Evaluate Alternatives

Assess Risks

Make Decision

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Develop Objectives

AskAskWhat results do we want?What results do we want?

What resources should we use or save? (people, What resources should we use or save? (people, equipment, money, time, space…)equipment, money, time, space…)

What law, regulation, or policy restrictions should we What law, regulation, or policy restrictions should we consider?consider?

List in short statementsList in short statements

Identify Criteria Identify Criteria that will that will

influence the influence the choicechoice

To help you To help you evaluate evaluate

alternatives alternatives fairlyfairly

ClarifyPurpose

Evaluate Alternatives

Assess Risks

Make Decision

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Classify objectives into Must and Wants

AskAskIs this objectives”Is this objectives”• Mandatory ? (required)Mandatory ? (required)• Measurable? (set limit)Measurable? (set limit)• Realistic? (can be met)Realistic? (can be met)

Yes to all 3 = MUST – label (M)Yes to all 3 = MUST – label (M)

All others are WantsAll others are Wants

Determining the Determining the role objectives role objectives will play in the will play in the

decisiondecision

To be clear To be clear about what is about what is

mandatory and mandatory and what is desiredwhat is desired

ClarifyPurpose

Evaluate Alternatives

Assess Risks

Make Decision

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Weigh the WANTs

AskAskWhat is the relative importance of each WANT?What is the relative importance of each WANT?

Identify the most important WANT(s), give it Identify the most important WANT(s), give it (them) a 10(them) a 10

Compare others to it (them) and assign Compare others to it (them) and assign numbered weightsnumbered weights

Check weights by comparing to the 10’sCheck weights by comparing to the 10’s

Assigning relative Assigning relative values to WANT values to WANT

objectivesobjectives

To show how To show how much each much each WANT will WANT will

influence the influence the choicechoice

ClarifyPurpose

Evaluate Alternatives

Assess Risks

Make Decision

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Generate AlternativesGenerate Alternatives

Ask:Ask:What choices do we have?What choices do we have?

Look at:Look at:Decision statementDecision statementKey ObjectivesKey ObjectivesInformation sources: experts, catalogues, …Information sources: experts, catalogues, …List alternatives without evaluationList alternatives without evaluation

Identifying or Identifying or creating creating possible possible choiceschoices

To expand the To expand the number of choices number of choices and increase the and increase the chances of picking chances of picking a winnera winner

ClarifyPurpose

Evaluate Alternatives

Assess Risks

Make Decision

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Screen Through the MUSTsScreen Through the MUSTs

Ask:Ask:Does this alternative satisfy this MUST limit?Does this alternative satisfy this MUST limit?

Gather and record factual dataGather and record factual data

Determine if Determine if GoGo or or No GoNo Go

Eliminate any Eliminate any No GoNo Go alternatives alternatives

Determining if Determining if alternatives alternatives meet the meet the MUSTsMUSTs

To eliminate To eliminate choices that do choices that do not meet not meet minimum minimum requirementsrequirements

ClarifyPurpose

Evaluate Alternatives

Assess Risks

Make Decision

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Compare Alternatives against the Compare Alternatives against the WANTsWANTs

Ask:Ask:How does this alternative satisfy this objective?How does this alternative satisfy this objective?

Gather and record factual dataGather and record factual dataCompute score for each objectiveCompute score for each objective

Score best performer for each objective (with a 10)Score best performer for each objective (with a 10)Score relative performance of remaining alternatives (0-Score relative performance of remaining alternatives (0-10)10)Multiply objective weight x scoreMultiply objective weight x scoreTotal the weighted scoreTotal the weighted score

Evaluating Evaluating relative relative performance of performance of alternativesalternatives

To determine To determine which which alternatives alternatives create the most create the most benefitbenefit

ClarifyPurpose

Evaluate Alternatives

Assess Risks

Make Decision

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Identify Adverse ConsequencesIdentify Adverse Consequences

Ask:Ask:If we do this, what could go wrong ?If we do this, what could go wrong ?Are we close to any MUST limits ?Are we close to any MUST limits ?What disadvantages are associated with this What disadvantages are associated with this alternatives ?alternatives ?Is any information vague or uncertain ?Is any information vague or uncertain ?

List each risk you find in an “if… then…” List each risk you find in an “if… then…” formatformat

Identifying Identifying future threats future threats for best for best performer(s)performer(s)

To understand To understand the risk of the risk of choosing an choosing an alternativealternative

ClarifyPurpose

Evaluate Alternatives

Assess Risks

Make Decision

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Make the Best Balanced ChoiceMake the Best Balanced Choice

For the best performing alternative, ask:For the best performing alternative, ask:Are we willing to accept the risk(s) to gain the Are we willing to accept the risk(s) to gain the benefit of this choice?benefit of this choice?

If yes, pick itIf yes, pick it

If no, repeat for the next best alternativeIf no, repeat for the next best alternative

Selecting an Selecting an alternative that best alternative that best meets criteria with meets criteria with acceptable risksacceptable risks

To commit To commit to a choiceto a choice

ClarifyPurpose

Evaluate Alternatives

Assess Risks

Make Decision

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TECHNIQUES

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Decision Analysis TechniquesDecision Analysis Techniques

Test the level of the DecisionTest the level of the Decision

Audit ObjectivesAudit Objectives

Assess the ThreatAssess the Threat

Present and Assess RecommendationsPresent and Assess Recommendations

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Test the Level of the Decision Test the Level of the Decision

Be conscious of any prior implied decisions

Examine the decision statement and ask:

What impact does each word have on our choice?

What happen if we use a different word ?

What need does this decision address ?

What is the fundamental purpose of the decision ?

Evaluating the Evaluating the type and range of type and range of alternativesalternatives

To improve To improve the decision the decision making making processprocess

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Audit ObjectivesAudit Objectives

Ask:Ask:

How does each objective relate to the Decision

Statement ?

Are the objectives separated ?

Are any objectives duplicates ?

Are any objectives features of one alternative ?

Are MUSTs mandatory, measurable and realistic ?

Reviewing Reviewing objectives before objectives before generating generating alternativesalternatives

To ensure a To ensure a complete, complete, balanced set of balanced set of objectivesobjectives

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Audit Objectives (continued)Audit Objectives (continued)

Ask:Ask:Should any MUST be reflected as WANT ?

Have short- and long-term objectives been balanced ?

Do the added weights of related objectives reflect the

intended emphasis ?

Have all stakeholders been adequately represented ?

Reviewing Reviewing objectives before objectives before generating generating alternativesalternatives

To ensure a To ensure a complete, complete, balanced set of balanced set of objectivesobjectives

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Asses the ThreatAsses the Threat

Ask:Ask:How likely is each adverse consequence ? (probability)

What impact will this adverse consequence have ?

(seriousness)

Use “if …Then …” format ?

Mark each threat High/Medium/Low for both

probability and seriousness ?

Determining the Determining the degree of risk of degree of risk of each adverse each adverse consequenceconsequence

To help To help understand understand which risks are which risks are acceptableacceptable

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Present RecommendationsPresent Recommendations

Use process to arrive at your recommendation.Use process to arrive at your recommendation.

State your choice and describe your process.State your choice and describe your process.

Make sure risks are visible.Make sure risks are visible.

Confirm that the decision maker is ready to choose.Confirm that the decision maker is ready to choose.

Formally Formally expressing expressing

a preferred choicea preferred choice

To help others To help others make a balanced make a balanced choicechoice

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Things to Do When RecommendingThings to Do When Recommending

Agree on the Decision Statement and Agree on the Decision Statement and objectives first (if possible)objectives first (if possible)

Describe the most important objectives at the Describe the most important objectives at the startstart

Explain how many alternatives you consideredExplain how many alternatives you considered

Describe how any “pet” alternatives were Describe how any “pet” alternatives were consideredconsidered

Show why your choice perform wellShow why your choice perform well

Make sure any risks for your choice are Make sure any risks for your choice are understood.understood.

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Things to Avoid When Things to Avoid When RecommendingRecommending

Assume agreement on your Decision Assume agreement on your Decision Statement and objectivesStatement and objectives

Hand out the matrix during your Hand out the matrix during your presentationpresentation

Use jargon that the decision maker does not Use jargon that the decision maker does not understandunderstand

Be too negative about any “pet” alternativesBe too negative about any “pet” alternatives

Use vague or doubtful informationUse vague or doubtful information

Hide risksHide risks

DO NOT…

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Assess RecommendationsAssess Recommendations

What were the most important things you What were the most important things you considered when you worked on this decision ?considered when you worked on this decision ?

How many alternatives did you consider ?How many alternatives did you consider ?

Why did you select this one ?Why did you select this one ?

What risks do we face with this alternative ?What risks do we face with this alternative ?

Using effective Using effective questioning and questioning and listening to evaluate listening to evaluate recommendationsrecommendations

To improve To improve your your confidence in confidence in the the recommendatiorecommendationnAsk:

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Things to Do When AssessingThings to Do When Assessing

Understand the need being met by the decisionUnderstand the need being met by the decision

Understand why the level of the decision is Understand why the level of the decision is where it iswhere it is

Understand why the key objectives are Understand why the key objectives are importantimportant

Listen to the recommendationListen to the recommendation

Look first for evidence of use of a rational Look first for evidence of use of a rational Process, then examine the contentProcess, then examine the content

Understand the risksUnderstand the risks

Provide feedback to the presenterProvide feedback to the presenter

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Things to Avoid When Things to Avoid When AssessingAssessing

Rush to judgmentRush to judgment

Focus too much on smallest detailsFocus too much on smallest details

Interrupt except to clarifyInterrupt except to clarify

Assume enough stakeholders have been consideredAssume enough stakeholders have been considered

Assume all the risks have been presentedAssume all the risks have been presented

Provide punishment for making a recommendationProvide punishment for making a recommendation

Do not…

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The Next Time You make decision,…

The End

Try Using Decision Analysis