Objectives zLearn how to state and clarify a problem Develop a procedure for problem solving zLearn the traps in problem solving
What’s typical? Self-Doubt Over Confidence Procrastination Flip-flops Desperation! WRONG!
Six Criteria for Effective Decisions zFocuses on what is important z Logical and consistent z Acknowledges objective and subjective factors, blends analytical and intuitive thinking zDoes not gather too much information z Tries to reach consensus z Straightforward, reliable, easy to use, flexible
Problem Solving Model POACTPOACT roblem bjectives lternatives onsequences radeoffs
Problem Solving Steps zState the problem carefully y Acknowledge complexities y Avoid assumptions and prejudices zSpecify the objectives z Create imaginative alternatives z Understand the consequences of the alternative z Grapple with your tradeoffs………con’t
Problem Solving Steps, con’t zClarify uncertainties z Think about your risk tolerance and the risks of each alternative z Consider linked decisions yEach alternative opens or closes future options
What’s the best solution? A good solution to a well-posed problem…. An excellent solution to a poorly posed problem Is a almost always a smarter choice than..
Define the Problem What triggers the problem? State the problem Question the constraints of the problem statement Identify the essential elements How does this impact other decisions? What is the scope of the problem? Gain insights from others Restate problem, if necessary
What Objectives Do zHelp determine what information to seek z Explain your choices to others z Determine the importance of, time and effort devoted to the problem
How to identify objectives z Write down the concerns you hope to address: y Wish list y Worst possible outcome y Impact on others y Insights from others y What’s a good alternative but unfeasible? y What is bad about the worst alternatives?
How to identify objectives Convert the concerns into succinct objectives z Separate the ends from the means zClarify what you mean by each objective Test your objectives
Alternatives zUse your objects and ask HOW? z Challenge constraints to your alternatives z Set high aspirations zThink through your alternatives before consulting others z Learn from past experience z Then ask others for suggestions
How to generate alternatives z Brainstorming yJust list alternatives, don’t evaluate yNever stop looking for alternatives y Look for win-win alternatives zStop when you’ve thought through alternatives z One solution would satisfy you z But still have a range of alternatives
Consequences zList the consequences of each alternative z Assess the future consequences of each alternative z Create a free-form description of the consequences z Eliminate any clearly inferior alternatives z Organize descriptions of remaining alternatives into a table …….
Consequences z Try to develop a common scale to measure consequences z Use qualitative and quantitative data z Use experts if necessary z Use scales that reflect appropriate levels of precision
Tradeoffs zEliminate alternatives clearly dominated by others z Then swaps between alternatives using measures zValue incremental improvements z Make consistent tradeoffs
Uncertainties z What are the key uncertainties? z What are the possible outcomes of these uncertainties? z What are the changes of the outcomes, given these uncertainties? z What are the consequences of each outcome?….
Uncertainties zIdentify the key uncertainties z Define the possible outcomes z Assign chance of occurrence of each outcome z Clarify consequences using quantitative and qualitative measures z Create a decision tree
Risk Tolerance zHow much risk do you want to handle? z How much are others affected by your decision? z Quantify the risks, if possible z Seek to lessen the risks but avoid foolish optimism z Don’t avoid making risky decisions just because they are complex
How to lessen risk zSeek risk reducing information z Diversify the risk zHedge the risk zInsure against the risk
Linked decisions zChoose options that leave future flexibility intact z Get timing right on decision tree z Describe the consequences at the end points
Psychological Traps zWorking on the wrong problem z Failing to identify key objectives zFailing to develop a range of good, creative alternatives z Overlooking crucial consequences of your alternatives z Giving inadequate thought to tradeoffs z Disregarding uncertainty…….
Traps, con’t z Failing to account for risk intolerance zFailing to plan ahead when decisions are linked over time... So, tell me some specifics on these traps...
Common Traps zAnchoring trap zStatus Quo Trap zSunk Cost Trap zConfirming Evidence Trap zFraming Trap zOverconfidence Trap zRecallability Trap z Base Rate Trap z Prudence Trap z Random Events
Review zA model for problem solving z The actions in each of the steps z Common Traps in problem solving