decision making & problem solving skills
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Decision Making SkillsDecision Making Skills
Personal Development Club Training Activities
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ContentsContents
I. Decision Making An Overview1. Functions of Mind
2. The Depth of Mind (Subconscious)
II. The Classic Approach to Decision Making1. Define objectives
2. Collect relevant information
3. Generate feasible options
4. Make the decision5. Implement and evaluate
III. Eight Elements of Smart Choices
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IV. Techniques for Effective Decision-Making
Skills1. Pareto analysis2. Paired comparison analysis
3. Grid analysis
4. Decision trees
5. Plus/Minus/Implication (PMI)
6. Force field analysis
7. Impact Analysis
V. Improving Decision Making
1. The Ladder of Inference2. Six Thinking Hats
3. Reactive Decision-Making
VI. Psychological Traps to Decision-Making
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I. Decision MakingI. Decision Making An OverviewAn Overview
y Decision making can be regarded as the mentalprocesses (cognitive process) resulting in theselection of a course of action among severalalternatives.
y Other definitions: From psychological perspective: decision is made
based on the context of a set of needs, preferencesan individual has and values they seek.
From cognitive perspective: decision is made as a
continuous process integrated in the interaction withthe environment.
From normative perspective: decision is made inconcern with the logic of decision making andrationality and the invariant choice it leads to
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1. Functions of Mind1. Functions of Mind
Separating a whole
into its constituent
parts.
Establishing success criteria,
evaluating, appraising performance,
and judging people.
Putting things together
to make it a whole.
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2. The Depth of Mind (Subconscious)2. The Depth of Mind (Subconscious)
y Level 1: You dont know
that you dont know.
y Level 2: You know thatyou dont know.
y Level 3: You know that
you know.
y Level 4: You dont know
that you know.
The Conscious Competence
Ladder
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II. The Classic Approach to Decision MakingII. The Classic Approach to Decision Making
y Step 1: Define objectives
y Step 2: Collect relevant information
y
Step 3: Generate feasible optionsy Step 4: Make the decision
y Step 5: Implement and evaluate
Not to decide is to decide.
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1. Define Objectives1. Define Objectives
y Ask yourself:
What you want to achieve
If you dont know what port you are heading
for, any wind is the right wind.
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2. Collect Relevant Information2. Collect Relevant Information
y It is a good principle not to make decisions in
the absence of critically importance information
that is not immediately to hand.
Required
InformationAvailable
Information
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3. Generate Feasible Options3. Generate Feasible Options
y Brainstorm for possibilities
y Generate feasible options.
y Form alternatives
y Select the course of actions
The Lobster
Pot Model
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5. Implement and Evaluate (cont)5. Implement and Evaluate (cont)
y In case of simple choice, use your
conscious mind.
y In case of complex choice, use your
subconscious mind
y Our subconscious mind can best process
all the complex information that comes
from another person and transform itinto a simple but profound judgment.
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III. Eight Elements of Smart ChoicesIII. Eight Elements of Smart Choices
y Problem
y Objectives
y
Alternativesy Consequences
y Tradeoffs
y
Uncertaintyy Risk tolerance
y Linked decision
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IV. Techniques for Effective DecisionIV. Techniques for Effective Decision
Making SkillsMaking Skills
y Pareto analysis
y Paired comparison analysis
y Grid analysisy Decision trees
y Plus/Minus/Implication (PMI)
y Force field analysis
y Impact Analysis
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1. Pareto Analysis1. Pareto Analysis
y Selecting the most important/most
beneficial changes to make.
y How to use tools:
List the problems you face, or the options
you have available.
Group options where they are facets of the
same larger problem. Apply an appropriate score to each group.
Work on the group with the highest score.
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2. Paired Comparison Analysis2. Paired Comparison Analysis
y Evaluating the relative importance ofdifferent options and set priorities whenthere are conflicting demands on yourresources.
To use the technique, compare each optionwith each other option, one-by-one.
For each comparison, decide which of the twooptions is most important, and then assign a
score to show how much more important it is.
You can then consolidate these comparisonsso that each option is given a percentageimportance.
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2. Paired Comparison Analysis (cont.)2. Paired Comparison Analysis (cont.)
y How to use tools:
1. List the options you will compare. Assign a letter to each option.
2. Set up a table with these options as row and column headings.
3. Block out cells on the table where you will be comparing an
option with itself (the diagonal from top-left to bottom-right).4. Also block out cells on the table where you will be duplicating a
comparison. Normally, these will be the cells below the diagonal.
5. Within the remaining cells, compare the option in the row withthe one in the column. For each cell, decide which of the two
options is more important.Write down the letter of the more
important option in the cell, and score the difference inimportance from 0 (no difference) to 3 (major difference).
6. Finally, consolidate the results by adding up the total of all the
values for each of the options. You may want to convert these
values into a percentage of the total score.
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2. Paired Comparison Analysis (cont.)2. Paired Comparison Analysis (cont.)
Case: you need to decide to buy only one
among these items: cell phone, laptop,
motorbike, and Playstation 3.
Cell phone
(A)
Laptop
(B)
Motorbike
(C)
PS3
(D)
Cell phone
(A)Step 3
Laptop
(B) Step 4 Step 3
Motorbike
(C)Step 4 Step 4 Step 3
PS3
(D)Step 4 Step 4 Step 4 Step 3
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2. Paired Comparison Analysis (cont.)2. Paired Comparison Analysis (cont.)
y Finally add up the A, B, C and D values, and converts each into apercentage of the total. This gives these totals: A=1 (12.5%), B =5 (62.5%), C = 2 (25%), D = 0.
y Thus, you may decide to buy a new laptop, and then a newmotorbike. Other two might not be as necessary as the first.
Cell phone
(A)
Laptop
(B)
Motorbike
(C)
PS3
(D)
Cell phone
(A)B2 C1 A1
Laptop
(B) B1 B2
Motorbike
(C)C1
PS3
(D)
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3. Grid Analysis3. Grid Analysis
y Selecting between good options while manyfactors to take into account.
y How to use tools:
1. List your options and then the factors that areimportant for making the decision.
2. Score each option for each of the important factorsin your decision (from 0 [poor] to 3 [very good]).
3. Work out the relative weights of the factors inyour decision (variable value).
4. Multiply the scores by the weights, and totals them.
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3. Grid Analysis (cont.)3. Grid Analysis (cont.)
Cost System Storage Graphic Design Total
MAC 1 3 1 3 3
SONY 2 2 2 2 2
DELL 3 2 3 2 2
HP 3 2 3 2 1
Cost
5
System
4
Storage
4
Graphic
3
Design
2Total
MAC 5 12 8 9 6 40
SONY 10 8 8 6 4 36
DELL 15 8 12 6 4 45
HP 15 8 12 6 2 43
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4. Decision Trees4. Decision Trees
y Choosing between options by projecting likelyoutcomes.
y Clearly lay out the problem so that all optionscan be challenged.
y Allow us to analyze fully the possibleconsequences of a decision.
y Provide a framework to quantify the values of
outcomes and the probabilities of achievingthem.
y Help us to make the best decisions on the basisof existing information and best guesses.
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4. Decision Trees (cont.)4. Decision Trees (cont.)
y How to use tools:
Start a Decision Tree with a decision that you need tomake (square represents decision).
From this box draw out lines towards the right for each
possible solution, and write that solution along the line(lines represent solutions or outcomes).
At the end of each line, consider the results. If the resultof taking that decision is uncertain, draw a small circle(circle represents uncertain outcomes).
Write the decision or factor above the square or circle.
If you have completed the solution at the end of the line,just leave it blank.
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An example of the
sort of thing you will
end up with.
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the calculation
of uncertain
outcome nodes
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By applying this techniquewe can see that the best
option is to develop a new
product. It is worth much
more to us to take our time
and get the product right,
than to rush the product tomarket. It is better just to
improve our existingproducts than to botch a
new product, even though it
costs us less.
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5. Plus/Minus/Implication (PMI)5. Plus/Minus/Implication (PMI)
y Weighing the Pros, Cons, and implications ofa decision.When you have selected a courseof action, PMI is a good technique to use tocheck that it is worth taking.
y How to use tools:
'Plus', write down all the positive results oftaking the action.While 'Minus' write down
all the negative effects. 'Implication' write down the interests and
possible outcomes of taking the action,whether positive, negative, or uncertain.
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5. Plus/Minus/Implication (PMI) (cont.)5. Plus/Minus/Implication (PMI) (cont.)
Plus Minus Implication
More going on (+5) Have to sell house (-6)Easier to find new job?(+1)
Easier to see friends
(+5)More pollution (-3) Meet more people? (+2)
Easier to get places (+3) Less space (-3)
More difficult to get own
work done? (-4)
No countryside (-2)
More difficult to get towork? (-4)
+13 -18 -1
Case: A young professional is deciding where to live.
Her question is 'Should she move to the big city?
She draws up the PMI table below:
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6. Force Field Analysis6. Force Field Analysis
y Force Field Analysis is a useful technique forlooking at all the forces for and against adecision.
y By carrying out the analysis you can plan to
strengthen the forces supporting a decision,and reduce the impact of opposition to it.
Describe your plan or proposal for change in themiddle.
List all forces for change in one column, and allforces against change in another column.
Assign a score to each force, from 1 (weak) to 5(strong)
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7. Impact Analysis7. Impact Analysis
y Identifying the full consequences of change.Capture and structure all the likely conse-quences of a decision; and then ensurethat these are managed appropriately.
y To conduct effective impact analysis:
Prepare for impact analysis
Brainstorm major areas affected
Identify all areas
Evaluate impacts
Manage the consequences
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V. Improving Decision MakingV. Improving Decision Making
y The ladder of inference
y Six thinking hats
y Reactive decision making
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1. The Ladder of Inference1. The Ladder of Inference
y The Ladder of Inference describes the thinking process thatwe go through, usually without realizing it, to get from a factto a decision or action.
Experience these selectively based on our
beliefs and prior experience.
Interpret what they mean.
Apply our existing assumptions, sometimes
without considering them.
Draw conclusions based on the interpreted facts
and our assumptions. Develop beliefs based on these conclusions.
Take actions that seem "right" because they are
based on what we believe.
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2. Six Thinking Hats2. Six Thinking Hats
y Six Thinking Hats is a good technique for looking atthe effects of a decision from a number of differentpoints of view.
Information: (White) - considering purely what informationis available, what are the facts?
Emotions (Red) - instinctive gut reaction or statements ofemotional feeling (but not any justification).
Bad points judgment (Black) - logic applied to identifyingflaws or barriers, seeking mismatch.
Good points judgment (Yellow) - logic applied to identifying
benefits, seeking harmony. Creativity (Green) - statements of provocation and
investigation, seeing where a thought goes.
Thinking (Blue) - thinking about thinking.
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3. Reactive Decision3. Reactive Decision--MakingMaking
y Reactive decision making usually happens
in case of emergency or when a disaster
unfolds.
y In such case(s), Steps of Classic Approach
to effective Decision-Making cannot be
fully followed. Bad decision is more likely
to happen. So contingency plan is highlyneeded.
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3. Reactive Decision3. Reactive Decision--Making (cont.)Making (cont.)
y Planning for exceptional reactive decision-making:
Look at the risks you face and determine if they havea high or low probability of occurring.
Use a Risk Assessment Matrix (RAM): draw a simple
table with a vertical axis marked as "Consequences"and a horizontal axis marked as "Probability".
Use a simple scale of 0 (very small) to 5 (very large)."Consequences" are credible potential worst-casescenarios that may develop.
Brainstorm the possible consequences to whichyou're exposed and assess the risk of eachconsequence occurring.
Plot these into RAM.
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VI. Psychological Traps to DecisionVI. Psychological Traps to Decision--MakingMaking
y Overrelying on first thought
y Keeping on keeping ony Protecting earlier choicesy Seeing what you want to see
y Posing the wrong questionsy Being too sure of yourself
y Focusing on dramatic events
y Neglecting relevant information
y
Slanting possibilities and estimatesy Seeing pattern where none exists
y Going mystical about coincidencesy Forewarned is forearmed
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