Transforming Business Through Sound Decisions Robust Decisions Transforming Business Through Sound Decisions

Why Is It Difficult to Make Good Decisions? Uncertainty Increasing complexity Incomplete and evolving data Dynamic business conditions Organizational barriers Poorly understood information Widely dispersed teams Uncertainty 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 Along with organizational barriers, poorly understood information in the forms of too much data, irrelevant or outdated information and the challenges of making decisions across widely dispersed teams, making any decisions seems to be a challenge!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?

How Much Do Bad Decisions Cost? Lost Time Lost revenue Reduced productivity Low morale Lost market share Worse…? 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.

50% of Decisions Fail “Why Decisions Fail” Paul Nutt, 2002 400 decisions made by senior managers Half of these decisions failed Failure: The action taken was not in effect 2 years later Three 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 failure People spend time and money on the wrong things Many 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

Decision Making Processes Understand the Problem (Framing) Clarify the Issue Generate Alternatives Develop Criteria Evaluate alternatives relative to the Criteria Fuse evaluation results to develop decision measures Stakeholders and decision-makers Decide what to do next Work to gain consensus Reduce uncertainty Refine Criteria Refine Alternatives Choose an alternative and document the deliberation and decision Move to next issue Decisions are a process, not an event!

Pugh’s Method, Kepner Tregoe, Multi-Attribute Utility Theory (MAUT) Decision matrix Pugh’s Method, Kepner Tregoe, Multi-Attribute Utility Theory (MAUT) Alternatives Wt. Vendor 1 Vendor 3 Vendor 4 Cr i t e r i a Cost .3 4 Response time .17 3 5 Training time 2 Ease of use 1 Strong team .1 Team experience Total 1.0 16 23 22 Weighted total 2.8 3.8 3.9 Confidence vendor meets criterion 5 = very high 1 = very low “The Mechanical Design Process” 3rd edition, David G. Ullman, McGraw Hill, 2003

Decision matrix, weaknesses Uncertainty not addressed Incomplete information excluded Evaluation results inconsistently represented (How do numbers in the matrix tie to the qualitative and quantitative evaluation results?) Little guidance on what-to-do-next Decision risk not represented Team members’ evaluations not combined

Decision Making Processes Understand the Problem (Framing) Clarify the Issue Generate Alternatives Develop Criteria Evaluate alternatives relative to the Criteria Fuse evaluation results to develop decision measures Stakeholders and decision-makers Decide what to do next Work to gain consensus Reduce uncertainty Refine Criteria Refine Alternatives Choose an alternative and document the deliberation and decision Move to next issue Decisions are a process, not an event!

How Methods Fit into Processes Evaluation Simulation Testing Prior Knowledge Opinion Criteria QFD -Quality Function Deployment Doors Specs Alternatives TRIZ Morphologies Portfolios Bayesian Team Support Information fusion What-to-do-next analysis Satisfaction and risk analysis Decision capture tool Decision management platform Uncertain Evolving Incomplete Conflicting

A Well Managed Decision is Robust A robust decision: Looks good later Has customer and team buy-in Is as insensitive to uncertainties as possible Was made with known anticipated satisfaction and risk

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: Incomplete Uncertain Evolving from stakeholders who: Represent many different viewpoints, areas of expertise, and organizational functions Know some of the information May be distributed in time and location

Can Better Decisions Be Made? By using Bayesian Team Support (BTS) Methodology Robust, proven, patented methodology Brings technology and discipline to the decision-making processes Using 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.

BTS allows you to: Manage the mix of facts, judgments, expertise and opinions of a distributed team Increase the quantity and quality of team input while keeping processes straightforward Organize highly complex information processes Optimize criteria definition for complex decisions Define clear milestones and transition points Apply easy-to-use software to enforce consistency and process learning Quickly review decisions made and repeat the process rapidly

Robust Decisions Uses BTS To allow you to: Improve competitive position Increase throughput of sound decisions Increase chances of profitability By: Optimizing your decision processes Empowering your people to make better, more informed decisions Enabling decision execution faster than the competition Managing increased complexity of decisions and data Increasing confidence of decisions throughout the chain

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 input Displays results from each person’s point of view Calculates the Risks Identifies what steps might improve the decision process

- Problem visualization One-screen Graphical Interface Provides structure Instant Feedback - Problem visualization Background Dave’s findings re design/development process; decisions critical weak links Solutions -

Use Scenario (Accord™ Network) 1. 1. Identify alternatives and criteria and saves them on the server database. Has administrative oversight/control Consultant, New York City Issue owner 2. Team evaluates information. Results saved to server database Analyst, London 5. Report, document, and reuse results and process. Engineer, on site A 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 analysis Their 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. Server 3. Interpret analysis results Database

Decision Management application areas Concept Selection Product Development Process Design Process Improvement Project Management IT Portfolio Management Proposal Evaluation Business Strategy Hiring/Review Process

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 qualitative Conflicting information: evaluation and importance varies across team members Evolving information: problem is changing with time Incomplete information: evaluation is incomplete Robust 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.

Boeing’s Benefits Ability to manage uncertainty of knowledge Increases confidence in decisions Helps target areas for risk mitigation Significant potential time saving due to lowering the risk of repeating a design cycle in the development process. Ability to manage strong personalities Facilitates team consensus Allows productive discussion of different views These numbers are taken from HP. Can you say something similar?

Who Can Benefit? Major (<1000 employee) organizations Geographically dispersed teams Highly competitive and fast moving industries Mid-to-senior managers in those organizations making mission-critical decisions The 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)

How Will They Benefit? Improve your teams’ performance Manage organizational uncertainty and doubt Empower the decision makers in the organization Transform difficult processes into well-structured Re-use, review of decisions Build accountability

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

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.

Our Unique Value Delivery Consulting Software Training Transform 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.

How Do I Find Out More? Visit: www.robustdecisions.com Contact: Tom Satterley 215-396-7332 Arrange for a Consultation/Demo Try Accord for 30 days with no risk