problem solving & decision making

© 2011 ECC International

PROBLEM SOLVING & DECISION MAKING


At the end of the training, participants are expected to:

• Understand how to use an innovative yet structured process-based problem solving

approach in practical scenarios.

• Recognize how to take informed decisions and calculated risks.

Learning Objectives


PROBLEM SOLVING & DECISION MAKINGModule 3


“ There are no big problems, there are just a lot of little problems ”

- Henry Ford


PROBLEM SOLVING MODELS/ METHODOLOGIESSection 1


What is problem solving?

• Problem solving is a higher order thinking process aimed at improving performance or solving impending problems in any aspect of life.

• It requires the modulation and control of more routine or fundamental skills with structured thinking and strong effort from a committed group

Service Delivery Team

Process Group Team

Middle Management

Project Sponsor

Support Team


What is problem solving?

• Problem solving is often misunderstood

• Issues are confused as problems and problems are confused as causes

Issue Problem Cause

• Terminology is very critical before looking into the methods of problem solving


Issue Proposal to solve a problem

Situation What a circumstance is

Purpose What we want to do or what we want to be

Problem Some portions of a situation that cannot realize purpose

Problem Process with set of actions to attain the purpose / aimSolving

Cause What brings about a problem

Identifying the appropriate solution / problem solving calls for strong thinking pattern

Problem Solving Terminology


Your Thoughts…..

Team Building


STRATEGIC THINKINGJudging based on whether a situation is focused or not… remember

Strategy is not necessarily strategic

EMOTIONAL THINKINGJudging based on the participants

REALISTIC THINKINGStarts from what one can do and fix the essential problems first

EMPIRICAL THINKINGJudging based on previous experience

Thinking patterns


SYSTEMS THINKINGScientific problem solving approach utilizing system concept

Purpose

Input

Result

OutputFunction

Inside cause

Outside cause

System based problem solving process

Thinking patterns


• Systems thinking brings structure into the problem solving approach

• It is based on system concept

• Clearly defines components and the boundaries of each one of them.

• Major components• Purpose

• Input

• Output

• Function

• Causes (Inside / Outside)

• Result

Systems Thinking


• Structured problem solving approach

• Mainly applicable to product / process improvement through correction / elimination of problems

• Applies 8 timeless principles to solve problems

• Based on using a team approach rather than focusing on individuals

8D Methodology


Form Team

Describe problem

Containment Implement and Verify Interim actions

Verify Corrective action

Implement it

Prevent recurrence

Congratulate team

Identify potential causes

Select likely causes Is it root cause? Identify possible solution

YN

1

2

3

4

5

6

7

8

8D Methodology


• Strong creative problem solving methodology

• Follows a systematic approach to solve problems against other Sisyphean tasks

• Always strives for ideal solutions by avoiding any compromises common with other methods

• Major advantage is its ability to by-pass / eliminate contradictions of the system by refusing trade-offs

TRIZ Methodology


The Search for solution

TRIZ Methodology


• Using the best practices from all these methods problem solving and decision making can be carved out as a simple “SOLVE” methodology

• Similar to the DMAIC approach of SIX SIGMA

SPECIFY

OBSERVE & MEASURE

ANALYZE

VERIFY & CHOOSE

EXECUTE & EVALUATE

Hybrid PSDM Methodology


“A problem well stated is a problem half solved”

- John Dewey


• Break problems apart in a hierarchical form using a logic tree

• Start at 20,000 ft view and move progressively downward

• Logic tree diagrams can be drawn from a functional perspective (sales / research / accounting / operations) or from existing problem perspective

• Create and follow a structure for problem solving

o Structure helps in gripping the issues rapidly

o M.E.C.E (MUTUALLY EXCLUSIVE & COMPLETELY EXHAUSTIVE)

o Do not try to reinvent the wheel

Problem Framing


• Business Needs

• No needs… No problems !!!

• So identify business needs …

• Business needs can usually be in several forms

• People Competency

• Market / Customer

• Financial

• Operational

Identify Business Needs - SPECIFY


During FY 2005, the 1st Time Call Resolution Efficiency for New Customer Hardware Setup was 89% . This represents a gap of 8% from the targets @ 97% that amounts to US $2,000,000 of annualized cost impact.

Problem Statement Example


Fill in the Blanks for Your Project:

During ___________________________________ , the ____________________ for(Period of time for baseline performance) (Primary business measure)

________________________ was _________________ . (A key business process) (Baseline performance)

This gap of ____________________________(Business objective target vs. baseline)

from ___________________ represents ____________________ of cost impact. (Business objective) (Cost impact of gap)

Problem Statement Template


• Data gathering throws a wide avenue for improvement in Organizations

• It is neither easy nor fun. But it can be made simple and painless

Data

Qualitative Quantitative

OBSERVE & MEASURE – Data Gathering


Data


• Brainstorming

• Research

• Interviewing

• Surveys

• Affinity Diagram

• Tally Sheets

• Check Sheets

• Quality Function Deployment

• Research

Data Gathering – Major Techniques


• Select group of people with background in the process area

• Create the right mix in the group

• Solicit for ideas and moderate the discussion

• No idea is a bad idea

• Participate.

• Be Creative. Encourage wild and exaggerated ideas

• No criticisms allowed

Data Gathering – Qualitative


• Remember…

o No idea is a bad ideao Participateo Be Creative. Encourage wild and exaggerated

ideaso No criticisms allowedo Quantity counts more than quality at this stageo Build on the ideas provided by otherso Evaluate ideas only at the end of the session



Interviewing Tips

• Be prepared

• Interview in pairs

• LISTEN Don’t Lead

• Use indirect approach

• Don’t ask for too much

Emphasize on preparation and courtesy



• Critical step where we prove or disprove the proposed hypothesis

• Interpretation of analysis is of two types

1. Understanding the data and piece it together

2. Assembling these findings into an externally directed end-producto This represents the course of action for the Organization

• There are a number of analysis tools to choose from to interpret the data

• It is critical to choose the solution that fits the particular problem

Interpreting Results


Analysis


• Cause & Effect Diagram

• Affinity Diagram

• Flowchart

• Prioritization Matrix

• Pareto Chart

• Check Sheets

• Cost of Quality

• Control Chart

Common Analyses for Interpretation


• Commonly called Fishbone diagram (due to its appearance) or Ishikawa Diagram

• Extremely useful in organizing and systematically summarizing results and causes

Effect

Cause IICause I

Cause IV Cause V

Cause III

ANALYZE – Cause & Effect Diagram


• Need to study a problem/issue to determine the root cause

• Want to study all the possible reasons why a process is beginning to have difficulties, problems, or breakdowns

• Need to identify areas for data collection

• Want to study why a process is not performing properly or producing the desired results

Cause & Effect Diagram – Why?


1. Clearly identify and define the problem, symptom, or effect for which the causes must be identified.

2. Place the problem or symptom being explored at the right, enclosed in a box.

3. Draw the central spine as a thick line pointing to it from the left.

4. Brainstorm to identify the "major categories" of possible causes (not less than 2 and normally not more than 6 or 7). If other applicable data such as check sheets are present, incorporate them as well.

Cause & Effect Diagram – How?


Materials Mother Nature

Man Machine Methods

Measurement System

Variation

Major Categories


5. Place each of the identified "major categories" of causes in a box or on the diagram and connect it to the central spine by a line

6. Within each "major category" ask, "Why does this condition exist?"

7. Continue to add clauses to each branch until the fishbone is completed.

8. Once all the bones have been completed, identify the likely, actionable Root Cause(s).

Cause & Effect Diagram – How?


Sample Cause & Effect Diagram


Named after Italian economist Vilfredo Pareto

“In any group of elements, a small number of elements determine most of the results.”

It is also known as the 80/20 rule e.g., 20% of the causes account for 80% of the problems.

Concept of vital few-trivial many

Pareto Chart


• A vertical bar chart where bars represent the components of the total effect or problem

• Arranged in descending order according to their contribution to the total

• A Pareto Diagram allows data to be displayed as a bar chart and enables the main contributions to a problem to be highlighted.

Pareto Chart


1. Determine data classification items

2. Determine the check sheet items and collect data

3. Tabulate data for each classification item

4. Arrange data in ascending or descending order of occurrence frequency

5. Calculate cumulative frequency of occurrence against the causes and plot values a histogram

6. Use frequency on the y-axis and causes on the x-axis

Constructing a Pareto Chart


Category Frequency Percent of total Cumulative %

Wrong dose 100 50 50

Wrong time 70 35 85

Wrong medicine 15 7.5 92.5

Wrong patient 8 4 96.5

Medicine dc'd 4 2 98.5

Missed dose 3 1.5 100

Grand Total 200 100% 100%

200180160140120100

80604020

0

100%90%80%70%60%50%40%30%20%10%

0%Wrong dose

Wrong time

Wrong medicine

Wrong patient

Wrong dc’d

Missed dose

Sample Pareto Chart


PROBLEM SOLVING STAGES TOOLS / TECHNIQUES

Identify & select a process or problem

Flow charts / Balanced ScorecardInterviews and surveysData sheetsBrainstorming & other consensus techniques

Describe the problem Data sheetsPareto chartsBar charts & Control charts

Develop a broad perspective by identifying all possible causes

Data sheetsBrain stormingFish bone diagrams

Develop a consensus on root cause Data sheets & Pareto chartsCorrelation chartsBrainstorming & other consensus techniques

Create solution and action plan Brainstorming, Control plan techniques

Tools & Techniques – Selection Guide


• Once the data is interpreted into useful information through appropriate analysis, the next step is to

o Present the results to the team / corresponding personnelo Get the buy-in of the team to implement the right solution

• This requires clear decision making strategy to be followed by the team

• Decision making however is a critical part of every single step in problem solving

• Let us look in some detail the process of effective decision making

Next Steps…


“The problem is not that there are problems… It is expecting otherwise and thinking that having problems is a problem.”

- Theodore Rubin


DECISION MAKING MODELS/ METHODOLOGIESSection 2


(Attitude/Style/Education/Experience)

Leadership Competencies

Organ

izatio

nal L

eade

rship

Leve

ls

Leve

l 1: L

ead

Self

Decis

ion

Mak

ing

Com

mun

icati

ons

(Ver

bal &

Non

-Ver

bal)

Inte

grit y

Inte

rper

sona

l Rel

ation

s

FiveLeadershipSpecialized

SkillAreas(SSAs)

Buyi

ng &

Sel

ling

Busin

ess A

cum

en

Leve

l 2: L

ead

Other

s

Leve

l 3: L

ead

Man

ager

s

Leve

l 4: F

uncti

onal

Lead

er

Leve

l 5:

Busin

ess L

eade

rLeve

l 6:

Group

Lead

er

Leve

l 7:

Seni

orEx

ecuti

veLe

ader

7 Levels ofOrganizational

LeadershipMastery

Importance of decision-making


(Decision Making Accuracy*)

(Decision Making Time*)

Accurate Inaccurate

Quick Slow/Long

*Note: Accuracy is not proportionate/or necessarily related to time.

Decision-Making Spectrums


• Problem solving is concerned with overcoming obstacles in the path toward an objective and may or may not require action.

• A decision is an act requiring judgment that is translated into action.

• It is more comprehensive than problem solving

They are interrelated but not interchangeable

Decision Making Basics


Individual decision making

Group decision making

Organizational decision making

Metaorganizational decision making

The Scope of Decision Making


Group

Organization

Metaorganization

Individual

DecisionalOutputs(Actions transactions,outcomes)

Decisional Inputs(Objectives, information,resources, energy)

PermeableBoundaries

Interactional Levels

External Environment

The Scope of Decision Making


Set objectives

Follow-up & Control

Find alternatives

Implement decisions

Compare & analyze

alternatives

Make the choice

Revise objectives

Renew searchRevise / Update objectives

Take necessary corrective action

VERIFY AND CHOOSE

EXECUTE AND EVALUATE

Decision Making Process


Set Objectives1

• Objectives constitute the foundation of effective decision making

• While making the right decision is the means the objective is the end

• Success of the decision making process lies in the measure of attaining the objectives



• Set SMART objectives

S Specific

M Measurable

A Achievable

R Realistic

T Time-bound



Find alternatives2

• Consider limitations of time and money

• Additional information follows the principle of increasing cost and decreasing value

• Start search in areas around the ‘zone of cost effectiveness’



Cost of additional information



Compare and Analyze Alternatives3

• All searches must lead to alternatives that must be properly analyzed

• Decision analysis or analysis of alternatives is critical to meeting the objectives

• Decision Analysis Resolution (DAR) is one of the International best practice methodologies used specifically for this purpose



• Decision Analysis needs to be applied

– when the decision is not straightforward or clear-cut

– when the impact of the decision is very high

– when there are many alternatives with apparently equal importance

– when there are several pros and cons and we need to arrive at the most optimum solution

DAR – When to use?


• Decisions related to areas assessed as ‘HIGH’ risk elements.

• Selection among reusable components, COTS or development

• Supplier selection

• To arrive at the most appropriate architecture or design technique

• Selection of a suitable life cycle model

• Decision on the levels, sequence and methodology of integration

DAR – Some Guidelines


PMI Methodology

Pugh Matrix

Force Field Analysis

Decision Trees

Six Thinking Hats

DAR – Major Techniques


• PMI stands for– Plus / Minus / Implications

• Based on the ‘weighing of pros and cons’ decision making method

• It takes into account the implications apart from the pros and cons

• PMI is extremely useful technique to validate / analyze the decision made

• Clearly indicates whether the chosen decision will have a positive improvement effect

PMI Method


• Identify the problem and gather possible alternatives / solutions

• Once the alternatives are identified we can analyze each one to find out if the decision would improve the condition or solve the problem

• Create a table with columns ‘Positive’, ‘Negative’ & ‘Implications’

• Then list down the effects of the decision under each of these columns to the rightful place they belong

• Add relative scores to each of these effects– (+) for positive impact– (–) for negative impact– (+) or (–) for the implications based on the effect

• Add up the scores to see the strength of the positive / negative impact

• An obvious decision must be reached at the end of this short exercise

PMI Method – How?


A young professional is deciding where to live. Her question is 'Should she move to the big city?'

The PMI table below helps in making the right decision

Plus Minus Implications

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 to work? (-4)

+13 -18 -1

(+13) + (-18) + (-1) = -6

So here the choice is obvious!...

PMI Method – How?


• 'Six Thinking Hats’ is used to look at decisions from a number of important perspectives

• It forces to move outside the habitual thinking style

• Helps to get a more rounded view of a situation

• In meetings it has the benefit of blocking the confrontations that happen when people with different thinking styles discuss the same problem

Looking at a Decision From All Points of View

Six Thinking Hats


• Parallel Thinking– A house from Four sides

• Parallel Vs Arguments

• Not categories of people

• These are directions, requests to think in a particular fashion

• Assumption that Mind can not focus on everything all at once

The Six Thinking Hats Philosophy


• Single use in a meeting

• Sequence Use in meetings– Any hat as often as needed– Any number of Hats– Any sequence

• Discipline is important– Stay with the hat of the moment– No Arguments please

Using the Hats


• More thorough, yet simple

• Time saving

• Removes Ego positions

• One thing at a time leads to more focused, better result producing thinking

• Put together the entire map, the route is obvious– Not identify the route and the imagine the map

Benefits


Intuitive

Informative

Constructive

Cautious

CreativeReflective

Six Thinking Hats


• What do you feel about the suggestion?

• What are your gut reactions?

• What intuitions do you have?

• Don’t think too long or too hard.

The Red Hat


• The information seeking hat.

• What are the facts?

• What information is available?

• What is relevant?

• When wearing the white hat we are neutral in our thinking.

The White Hat


• The sunshine hat.

• It is positive and constructive.

• It is about effectiveness and getting a job done.

• What are the benefits, the advantages?

The Yellow Hat


• The caution hat.

• In black hat the thinker points out errors or pit-falls.

• What are the risks or dangers involved?

• Identifies difficulties and problems.

The Black Hat


• This is the creative mode of thinking.

• Green represents growth and movement.

• In green hat we look to new ideas and solutions.

• Lateral thinking wears a green hat.

The Green Hat


• The control hat, organising thinking itself.

• Sets the focus, calls for the use of other hats.

• Monitors and reflects on the thinking processes used.

• Blue is for planning.

The Blue Hat


• Deriving power from focused thinking

• Saving time

• Removing ego from decisions

• Doing one thing at a time

Results of six hat thinking


Decision-making strategies

• Computational

• Judgmental

• Compromise

• Inspirational

A Typology of Decisions


Decision categories

• Category I – Routine, recurring, certainty with regard to the outcome

• Category II – Non-routine, nonrecurring, uncertainty with regard to the outcome



Decision combinations

• Category I / Computational strategy

• Category II / Judgmental strategy

Top management makes Category II decisions.

Operating management makes Category I decisions.

Middle management supervises the making of Category I decisions and supports the making of Category II decisions.



Category II

• Long-range organizational objectives

• Best choice from among a set of alternatives

• Decision involves organizational change

• Decision requires a commitment of resources

• Choice is a means to an end, not an end to itself

• Decision maker tends to overestimate success

• Success is measurable through objectives attainment

Characteristics of Managerial Decisions


Concept of Decision-Making Strategies

Knowledge about outcome Preference for outcome

Strong preference Weak preference

High-level knowledge Computational decision making strategy

Compromise decision making strategy

Low-level knowledge Judgmental decision-making strategy

Inspirational decision making strategy


4

• Choice is mere culmination of the entire decision making process

• All results from the previous decision analysis must be appropriately applied to choose the right decision

• It makes better sense to collaborate with the team involved in order share ideas and choose the right alternative

Making the choice


5

• Implementation / Rollout of the decision made is very critical

• Proper presentation of the decision decides the buy-in from the team

Decision success is a function of its quality and implementation

Decision Implementation


Success factors Detractors

Proper observation of operational constraints

Disregard of risks involved

Influence of decision maker Lack of clear direction

Involvement from implementers Lack of proper coordination

Lack of conflict of interest Too much additional information

Decision Implementation


6

• Essential to ensure that implemented decision meets the objectives

• Performance measurement is made based on observing implemented decision in relation to the standard derived from the objective

• Involves corrective and preventive action implementation where necessary

Follow-up and Control


Solve the problem that really exists

NOT just the symptoms of a problem

NOT the problem you already have a solution for

NOT the problem you wish existed and

NOT the problem someone else thinks exists.


“If you do what you’ve always done, you’ll get what you always got!”

- W. Edwards Deming


END

problem solving & decision making

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