Presentation on theme: "Transforming Business Through Sound Decisions"— Presentation transcript:
1 Transforming Business Through Sound Decisions Robust DecisionsTransforming BusinessThrough Sound Decisions
2 Why Is It Difficult to Make Good Decisions? UncertaintyIncreasing complexityIncomplete and evolving dataDynamic business conditionsOrganizational barriersPoorly understood informationWidely dispersed teamsUncertainty is one of the strongest factors affecting decisions today. Decisions of any kind. If uncertainty can be reduced, decisions can be made more easily. And more sound decisions should be within reach. However, in today’s world, decisions are based on information that is increasingly complex and affected by very rapid changes of conditions that affect the decision. Along with organizational barriers, poorly understood information in the forms of too much data, irrelevant or outdated information and the challenges of making decisions across widely dispersed teams, making any decisions seems to be a challenge! Given these factors how can robust decisions be made consistently and with confidence every time?
3 How Much Do Bad Decisions Cost? Lost TimeLost revenueReduced productivityLow moraleLost market shareWorse…?Everyone knows an example of bad decision-making in an organization. When it comes to key decisions in your organization, what would be the cost of a BAD decision? How do you even put a number on Lost revenue, productivity, low company morale, misdirected company resources, lost opportunities, lost market share to competitors, financial weakness, and in extreme cases: layoffs, divisional selloff, or company closure.
4 50% of Decisions Fail “Why Decisions Fail” Paul Nutt, 2002 400 decisions made by senior managersHalf of these decisions failedFailure: The action taken was not in effect 2 years laterThree classes of “blunders”Two out of every three decisions were made with failure prone practices.Premature commitments, jumping on first idea – a key cause of failurePeople spend time and money on the wrong thingsMany decisions are actually efforts to justify vs. evaluation to select the best possible alternative.Failure means action not taken on decision and if taken the action was not in effect two years later.The decision makers seemed oblivious to the poor track record of these practices and seldom studied their failures.Many decision activities are actually efforts to justify a conclusion rather than to use evidence to select the best possible alternative
5 Decision Making Processes Understand the Problem (Framing)Clarify the IssueGenerate AlternativesDevelop CriteriaEvaluate alternatives relative to the CriteriaFuse evaluation results to develop decision measuresStakeholders and decision-makersDecide what to do nextWork to gain consensusReduce uncertaintyRefine CriteriaRefine AlternativesChoose an alternative and document the deliberation and decisionMove to next issueDecisions are a process, not an event!
6 Pugh’s Method, Kepner Tregoe, Multi-Attribute Utility Theory (MAUT) Decision matrixPugh’s Method, Kepner Tregoe, Multi-Attribute Utility Theory (MAUT)AlternativesWt.Vendor 1Vendor 3Vendor 4Cr it e r i aCost.34Response time.1735Training time2Ease of use1Strong team.1Team experienceTotal1.0162322Weighted total188.8.131.52Confidence vendormeets criterion5 = very high1 = very low“The Mechanical Design Process” 3rd edition,David G. Ullman, McGraw Hill, 2003
7 Decision matrix, weaknesses Uncertainty not addressedIncomplete information excludedEvaluation results inconsistently represented(How do numbers in the matrix tie to the qualitative and quantitative evaluation results?)Little guidance on what-to-do-nextDecision risk not representedTeam members’ evaluations not combined
8 Decision Making Processes Understand the Problem (Framing)Clarify the IssueGenerate AlternativesDevelop CriteriaEvaluate alternatives relative to the CriteriaFuse evaluation results to develop decision measuresStakeholders and decision-makersDecide what to do nextWork to gain consensusReduce uncertaintyRefine CriteriaRefine AlternativesChoose an alternative and document the deliberation and decisionMove to next issueDecisions are a process, not an event!
9 How Methods Fit into Processes EvaluationSimulationTestingPrior KnowledgeOpinionCriteriaQFD -Quality Function DeploymentDoorsSpecsAlternativesTRIZMorphologiesPortfoliosBayesian Team SupportInformation fusionWhat-to-do-next analysisSatisfaction and risk analysisDecision capture toolDecision management platformUncertainEvolvingIncompleteConflicting
10 A Well Managed Decision is Robust A robust decision:Looks good laterHas customer and team buy-inIs as insensitive to uncertainties as possibleWas made with known anticipated satisfaction and risk
11 Know some of the information May be distributed in time and location Many tasks require choosing a course of action and committing resources based on information that is:IncompleteUncertainEvolvingfrom stakeholders who:Represent many different viewpoints, areas of expertise, and organizational functionsKnow some of the informationMay be distributed in time and location
12 Can Better Decisions Be Made? By using Bayesian Team Support (BTS) MethodologyRobust, proven, patented methodologyBrings technology anddiscipline to the decision-making processesUsing Bayesian Team Support (BTS) is based on the Bayesian Team Methodology developed by Robust Decisions. This methodology mathematically manages the mix of facts, judgments, opinions, uncertain, and evolving information that characterizes many decisions – especially strategic and organizational decisions that can make the difference between profit and loss.
13 BTS allows you to:Manage the mix of facts, judgments, expertise and opinions of a distributed teamIncrease the quantity and quality of team input while keeping processes straightforwardOrganize highly complex information processesOptimize criteria definition for complex decisionsDefine clear milestones and transition pointsApply easy-to-use software to enforce consistency and process learningQuickly review decisions made and repeat the process rapidly
14 Robust Decisions Uses BTS To allow you to:Improve competitive positionIncrease throughput of sound decisionsIncrease chances of profitabilityBy:Optimizing your decision processesEmpowering your people to make better, more informed decisionsEnabling decision execution faster than the competitionManaging increased complexity of decisions and dataIncreasing confidence of decisions throughout the chain
15 Decision Making w/The Accord™ Decision Making software solution uniquely supports BTS by leveraging powerful mathematical algorithms that cannot be handled manually.Factors in both Quantitative and Qualitative inputDisplays results from each person’s point of viewCalculates the RisksIdentifies what steps might improve the decision process
16 - Problem visualization One-screenGraphical InterfaceProvides structureInstant Feedback- Problem visualizationBackgroundDave’s findings re design/development process; decisions critical weak linksSolutions-
17 Use Scenario (Accord™ Network) 1.1. Identify alternatives and criteria and saves them on the server database. Has administrative oversight/controlConsultant, New York CityIssue owner2. Team evaluates information. Results saved to server databaseAnalyst, London5. Report, document, and reuse results and process.Engineer, on siteA typical use scenario:Owner or team develops alternatives and criteria for evaluating them.Team members, who can be collocated or distributed in time or location, perform evaluation based on their knowledge and analysisTheir evaluations are merged.The merged evaluations are analyzed and output presented showing value, risk, what to do next and other information. Analysis occurs real-time as new information is entered.Decision makers review the results and either choose an alternative and document the results, or choose to collect more evaluation information.Other scenarios are possible, each built around the basic steps of 1) define the problem, 2) evaluate, and 3) manage the results.Where other decision support tools were designed for a single user or analyst, Accord was designed to be used by team members.4. Team refines information at owners’ request.Server3. Interpret analysis resultsDatabase
18 Decision Management application areas Concept SelectionProduct DevelopmentProcess DesignProcess ImprovementProject ManagementIT Portfolio ManagementProposal EvaluationBusiness StrategyHiring/Review Process
19 Decision Making at Boeing, Space and Communications Division Project Decision Needed:Select a Delta Rocket nozzle modification to propose in an uncertain environment.Unrefined information: some even qualitativeConflicting information: evaluation and importance varies across team membersEvolving information: problem is changing with timeIncomplete information: evaluation is incompleteRobust decision making is leveraged off of Taguchi’s Robust Design that emphases “noise” (uncertainty) as a major consideration in the product development process. In Taguchi’s work product noises are caused by environmental factors, aging and unit-to-unit variation. In making a decision there is uncertainty in information that is unrefined, conflicting evolving and incomplete.
20 Boeing’s Benefits Ability to manage uncertainty of knowledge Increases confidence in decisionsHelps target areas for risk mitigationSignificant potential time saving due to lowering the risk of repeating a design cycle in the development process.Ability to manage strong personalitiesFacilitates team consensusAllows productive discussion of different viewsThese numbers are taken from HP. Can you say something similar?
21 Who Can Benefit? Major (<1000 employee) organizations Geographically dispersed teamsHighly competitive and fast moving industriesMid-to-senior managers in those organizations making mission-critical decisionsThe target is “Mid-level through senior managers responsible for making, executing, and managing the consequences of complex business decision. Complex business decisions include those situations where uncertainty and increased risk are present due to any combination of the following:Multiple peer-level inputs are required to be balanced (corporate strategy, major new product choices)Numerous cases of specialized assessments by experts are needed (product feature / implementation selections)Timely analysis of disperse team members are required (global vendor/supply chains, refining customer requirements)Accountability, compliance, or new process/technology choices demand documentation (major program selections, financial/corporate accounting)
22 How Will They Benefit? Improve your teams’ performance Manage organizational uncertainty and doubtEmpower the decision makers in the organizationTransform difficult processes into well-structuredRe-use, review of decisionsBuild accountability
23 HP Testimonial“We have used other decision-making software and none have provided the same level of understanding of the issues, and confidence in the outcomes, as Accord and the Robust Decisions process. The program enabled us to be more rigorous, quickly brought our teams members to a common plane, and better quantified the inputs and results.”Hewlett Packard Senior Technical Manager, Ink Jet Division
24 What is Robust Decisions? Robust Decisions brings proven solutions for rapid completion of mission-critical decisions within your organization. Through our expertise, the BTS methodology and the Accord™ technology from Robust Decisions, you have the power to optimize your decision processes and empower your people to make better, more informed decisions and execute them faster than the competition.
25 Our Unique Value Delivery ConsultingSoftwareTrainingTransform your organization’s decision-making abilities with our incremental approach model. Begin with a single decision for a single project and rapidly expand the confidence of information capture, value assessment and collaborative behaviors into an intrinsic piece of your organizational DNA. Accord software is included as part of the engagement, giving your decision-makers the edge against the competition.
26 How Do I Find Out More? Visit: www.robustdecisions.com Contact: Tom SatterleyArrange for a Consultation/DemoTry Accord for 30 days with no risk