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Decision Making, Value Propositions, and Project Failures Reality and Responsibility INCOSE Las Vegas September 15-18 Rick Dove email@example.com Paradigm Shift International
Anonymous Case Study: Projects and Value Propositions That will probably stick Staffed integration-management responsibility Agile enterprise IT infrastructure (XML bus, ETL templates) On-Demand application integration (anything anytime) That will probably be lost Access to comprehensive information On-Demand Differentiated eBusiness strategy Dept-manager responsibility for IT business tools Business-engineering office Comprehensive employee involvement in customer service That were planned but will probably not be implemented Strategy Portfolio Management system Agile-culture development and maintenance Agile security strategy Attributed Copies Permitted © 2004 RKDove, Paradigm Shift International, www.parshift.com
Case Stdy: Hindsight Observations Value propositioning insufficiently addressed for execs CEO vision was articulated, but not bought into by others Benefits of agile vision neither appreciated, nor taught Major attention focus conflict Production focused on plant/process construction (Herculean) Sales/Marketing focused on getting orders (Herculean) Other areas struggling with OJT and cultural conflicts Unresolved responsibility gaps Copy-Exact MES untouchable, isolationist (Mfg Execution Sys) Unresolved data-integrity conflict between ERP and MES Unresolved ownership of eBusiness strategy & proj mgmnt Unresolved cultural conflicts Serious intercultural cold war and gang politics Competency and performance not appreciated concepts Unsustainable implementation and strategy Mandate to hire local IT, but insufficient capabilities available Attributed Copies Permitted © 2004 RKDove, Paradigm Shift International, www.parshift.com
Attributed Copies Permitted © 2004 RKDove, Paradigm Shift International, www.parshift.com Project Failure Defined Project fails to deliver acceptable ROI = Implementation Failure project terminated before completion needs cease to exist - the world changed unpredictably necessary resources become insufficient or unavailable decision makers have a change of heart or are replaced project ill defined = resources inefficiently applied project incorrectly defined = user rejection or insufficient value Project fails to deliver as proposed = Proposal Failure project exceeds budget project exceeds time project doesn't meet spec Caused by Inadequate Value Propositioning
Individual Decision Logic Under Valued Increases Individual Decision Behavior Low Probability Gain High Probability Loss Averse Behavior "S" Curve RelativeNon-Linear Formulation Dependent Risk Averse Behavior Risk Seeking Behavior Steeper Negative Values GainLoss Value Status Quo Ruiness Outcome Hopes and Expectations Perception as Loss or Gain to High Probability Gain Low Probability Loss Under Weighted High Prob Over Weighted Certainty Psycho- logical Bias Over Weighted Low Prob Losses Loom Larger Knowledge Dependent Over Weighted Prob Under Weighted Prob Low Knowledge High Knowledge Chunking Probabilities Simplified Elimination by Simpli- fication reflects valuation as: unless results in with looks like shaped as Initial Gains/Losses Dominate Diminishing Incremental Values results in Not Significant if perceptions of if DM has sets neutral point of which biases shaped by effect is Probability (Prob) is the subjective likelihood, assumed by a Decision Maker, that a proposed benefit will deliver as promised. Kaheman & Tvarsky: Prospect Theory © 2004, Rick Dove, Value Propositioning – Book One – Perception and Misperception in Decision Making, Iceni Books, 2004 Attributed Copies Permitted Decision Makers hear promised benefits with a bit of healthy skepticism. In the information technology arena, with a good deal of skepticism. They associate a probability, that a benefit will deliver as promised. They know from experience that honest claims assume ideal conditions of implementation, transfer, and acceptance. [interpretation of Prospect Theory]
based on Perception Creation Group Decision Behavior Performance Targets Unresolved Conflict Simple Patterns Candidate Solutions Search Process Problem Perception Who's Searching Amount of Org Slack Standard Rules Past Experience Past Org Slack selected by Past Perform- ance Past Objectives Perform- ance of Others based on DM's Objectives Objective List Group Members involves Objective Setting Choice based on Influenced by based on "Satisficing" Valuation results in avoids uncertainty by Short Term View results in Contract Terms Negotiated Predictability Sequential Attention results in Postponing Some Objectives results in Lowest Commonality Acceptable Level Rules includes Mitigating Conflict Training and Experience Attention Focus Similarity to Current Solution by Value Propositions Decision Psychology interpreting from determined by Group Decision Logic Cyert & March: Behavioral Theory of the Firm Simon: Administrative Behavior © 2004, Rick Dove, Value Propositioning – Book One – Perception and Misperception in Decision Making, Iceni Books, 2004 Attributed Copies Permitted The Decision Maker "...looks for a course of action that is satisfactory, or 'good enough'....Because administrators satisfice... they can make their decisions with relatively simple rules of thumb that do not make impossible demands upon their capacity for thought. Simplification may lead to error, but there is no realistic alternative in the face of the limits on human knowledge and reasoning." [Herb Simon]
Misperception Logic Plous: Behavioral Psychology of Decision Making © 2004, Rick Dove, Value Propositioning – Book One – Perception and Misperception in Decision Making, Iceni Books, 2004 conforms to Selective Perception Expectations Hopes Context Dependence Memory Bias Associated Memories Inferred Details Re- construction of Event Partial Memory Other Information from filled in with Hindsight Bias Past Event believing Predictable was Mis- perception is caused by Consistency Biased Knowledge Self Image with forces Old Perceptions meaning results in Comparison Specific Reference Dominate Perception First Perception Last Perception Associated Perceptions determined by making may use meaningmaking with conform to drawn from Cognitive Dissonance Recency Effect Primacy Effect Contrast Effect Halo Effect will be Perception Creation by changing determined by Attributed Copies Permitted Recreating from memory what was witnessed at an auto accident is not unlike trying to remember what was shown in a project presentation, or what was read in a written proposal. Information is selectively filtered and interpreted by the observer in the process of becoming memory and perception. The end result is a set of perceptions that are both incomplete and different than the original information. [paraphrasing Plous]
Perception Formation Logic David Ausebel, Meaningful Learning Joseph Novak, Concept Maps © 2004, Rick Dove, Value Propositioning – Book One – Perception and Misperception in Decision Making, Iceni Books, 2004 Attributed Copies Permitted "The most important single factor influencing learning is what the learner already knows. Ascertain this and teach him accordingly." [David Ausebel] requires learner with Commitment To Learn Interest in Material Close Prior Knowledge New Info Subsumed Under Old Progressive Differen_ tiation Integrative Recon- ciliation Hierarchy with principles of Increasing Linkage & Refinement Knowledge Cross Links & Fixed Links Relevancy RoteMeaningful Learning Perception Formation is Source Internal Self Discovery External Presentation has scale spanning Structured Concepts which creates Concept Maps which appears to be that can be modeled as reflecting Relationships Concepts consisting of connected by with dimensions of as
Case Study: Hindsight Lessons Value propositioning for main decision should never stop People will not listen until they are ready Focus individually on individual's values Success constraints should be addressed with separate and continuous value propositioning Do not assume problems are understood, make the case Responsibility voids and conflicts must be resolved early IT cannot get cooperation w/o business mgr's commitment Cultural engineering should start early Soft stuff is hard part, and cannot be postponed There is no substitute for competency and talent Plan sustainability up front and act early Attributed Copies Permitted © 2004 RKDove, Paradigm Shift International, www.parshift.com
Attributed Copies Permitted © 2004 RKDove, Paradigm Shift International, www.parshift.com Value Propositioning Book One Perception and Misperception in Decision Making by Rick Dove – Book One – Perception and Misperception in Decision Making Nov 2004, Iceni Books, 14 Chapters, ~60 pages, $15.00 Pre-publish PDF available now – Book Two – Competency and Talent of Decision Champions Q2 2005 – Book Three – Responsibility and Skill of Decision Makers Q4 2005
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