1. The Intellectual and Leadership Center of the Air Force
DEFENSE FINANCIAL MANAGEMENT & COMPTROLLER SCHOOL
Mrs. Desiree Murray
6 March 2007
Defense Financial Management & Comptroller School
Ira C. Eaker College for Professional Development
Maxwell Air Force Base, AL
We make a difference…
one student at a time

2. Outline Decisions, decision making and decision support
The role of the financial manager in decision support
Decision support model
DFM&CS
Summary
We’ll discuss a variety of things this morning but I’d like to boil it down to three primary areas that we will focus on.
First, I’d like to spend some time talking about decision support and what exactly we mean when we use that phrase. The intent here is to get us all on the same sheet of music regarding what decision support is and why it is important for us to be talking about decision support today.
After defining decision support, I’d like to talk about the transitioning role of the Financial Management function and how we can be of greatest value to the organizations that we serve.
Then we will take a look at the model we use at the Defense Financial Management and Comptroller School to provide a framework for effective decision support.
Once we have finished discussing what decision support is, its relevance to what we do as financial managers and a framework we can use to effectively provide decision support I will give a brief overview of opportunities we offer at the Defense Financial Management and Comptroller School for additional instruction on these topics.
We will also have a follow-on workshop after this designed to go a little further in-depth into some of the skills and tools that financial managers can use to sharpen their decision support skills.

3. Decision Making and Decision Support
To Understand Decision Support, We Must Understand Decision-Making
Theodore Roosevelt: In any moment of decision the best thing you can do is the right thing, the next best thing is the wrong thing, and the worst thing you can do is nothing.
Margaret Thatcher: Standing in the middle of the road is very dangerous; you get knocked down by the traffic from both sides.
Albert Einstein: We can't solve problems by using the same kind of thinking we used when we created them.
Effective decision making is a widely sought after skill. Who doesn’t want to make or work for someone who makes good decisions? Decisions affect us in all phases of our lives:
We make decisions in our families
We work with our neighbors to make decisions about the communities we live in
At work and in business effective decision making is often cited as the reason one organization flourishes while another falters
Politically our nation is absorbed right now trying to pick the man or woman who will make the best decisions for our country
The call for determined, proactive decision makers is not new. Presidents like Franklin and Theodore Roosevelt, heads-of-state like Margaret Thatcher, accomplished scientists like Albert Einstein and deep thinking philosophers like Yogi Berra have all recognized the need for men and women of action who are able and willing make decisions in the time of need.
But being able and willing to make decisions does not necessarily equate to making effective decisions. Consider this example. What traditionally happens in DoD financial management organizations every year beginning in late July and running through September? It’s the annual, time-tested, steeped-in-military-tradition ritual otherwise known as the year-end closeout process. It’s that time of year when many command’s find that through a combination of cost cutting, expense deferrals and unexecuted spend plans they have fall-out money available to put against other command priorities. Many decisions are made when this occurs. Where should the fall-out funds be applied? What projects should be funded? Typically as it gets closer and closer to year end the level of activity whips into a frenzy as commanders, operators, financial managers, budget analysts and accountants all work to ensure 100% obligation rates by year end. Most often that objective is achieved but who here would argue that it is the most effective use of resources?
Here’s the point… Simply making decisions when pressed to do so is not enough. While the importance of men and women who are willing to take action and make decisions is recognized, it is critical that their decisions be based on thorough, well informed input if they are to make optimal decisions.
Franklin D. Roosevelt: One thing is sure. We have to do something. We have to do the best we know how at the moment...; if it doesn't turn out right, we can modify it as we go along.
Yogi Berra: When you get to the fork in the road, take it.

4. Decision Support - a Core Competency of the FM Community
Bottom Line Up Front
For decision makers to make better decisions they must demand better decision support
A lack of quality data and analysis leads to suboptimal decisions
The majority of significant decisions have resourcing implications
Those of us in the resourcing community are responsible for providing quality analysis
Decision makers must demand the best information to be able to make the best decisions.
It’s an understatement to say that we live in a very complex environment today. There are a great number of actors that affect the decisions decision makers select. When faced with a decision it is one thing to identify the best way ahead and to take action to achieve it. It is another to be able to identify things not always directly apparent when considering the primary decision. Often times decisions have second and third order effects beyond their original intent. There is a certain element of risk present when making decisions. There are also unintended consequences of decisions. Decision makers need to have strategies to allow them to identify potential risks and to consider unintended effects that their decisions might have.
I have a favorite saying. It’s a simple saying. I heard it when I was a junior officer and I have proven it true to myself time and time again. I find that I have passed this truism down to my children as they continually prove it to me despite my best efforts to rid them of this affliction.
The saying is simply that common sense, common knowledge and common courtesy are the three of the least common things found in our society today.
Often times when we introduce our students to the concept of providing effective decision support we get responses indicating that they’ve been providing decision support all along – that’s just common sense! To a certain degree the concept of providing decision support is common sensical. But just because one may consider the need for those of us in the FM community to provide decision support to be common sense hopefully they recognize that to be effective at supporting our decision makers we must have a game plan. It’s kind of like fielding in baseball. It’s obvious that to be successful one needs to be able to field well and know where to throw the ball to make the best play. To be an effective fielder a ball player must practice both fielding the ball cleanly and making the proper play. In similar fashion, we, as FM’ers must be proficient in the skills necessary to effectively provide decision support and we must also have an effective game plan to allow us to help make the best decision.
Decision Support - a Core Competency of the FM Community

5. Successful Decision Making is not a Simple Task
Reaction vs. Decision
Reaction – Response to some stimulus or event
Decision – Selecting a choice between alternatives
Components of a decision
A set of alternatives or options
Each alternative has consequences
Uncertainty regarding consequences
Already we’ve talked quite a bit about making decisions but before we go further I think it is important to talk about what a decision really is.
We go through much of our lives without truly making decisions. When the phone rings generally we don’t weigh the pros and cons of answering it, we just instinctively answer it without giving it much thought. This is not truly a decision. Rather, it is a reaction.
Making a decision differs from simply reacting in that a decision inherently involves choosing between several different courses of action. According to Webster’s dictionary deciding is to arrive at a solution that ends uncertainty or dispute about what to do. A decision has the following components:
Each decision has a set of alternative courses of action that constitute logical actions to address the decision
The alternatives each have their own set of consequences and each decision maker has their own values regarding the possible consequences
There also is an element of uncertainty regarding the level and even the realization of the consequences.
The combination of the uncertainty regarding the consequences of the decision and the decision makers values regarding these consequences make the outcome of the decision less than a guaranteed result the majority of the time. Indeed, effective decision making is a complex process. It is often a very challenging and imprecise science if one tries to do it on the fly.
Successful Decision Making is not a Simple Task

6. Dealing with Complex Issues
Good decisions are seldom easy to recognize
Uncertainties cause decision making to be more complex
There are many techniques for dealing with these uncertainties
It is not easy to select the best course of action when facing a decision. Making a good decision generally involves effectively accomplishing the intended objectives while minimizing unintended outcomes.
Three types of uncertainty contribute to the complexity of decision making
The first uncertainty is when the decision maker is unsure of the nature of the problem
The second uncertainty involves the cause and effect relationship of the decision
The decision maker is unsure of which action will achieve the intended outcome
Finally, uncertainty exists regarding external events may affect the relationship between action and outcome
Unlikely events that would have monumental consequences
Likely events that will have lesser but significant consequences
There are many examples of decision making techniques designed to deal with these uncertainties
- prayer, tarot cards, astrology, augurs, revelation, or other forms of divination
- flipping a coin, cutting a deck of playing cards, and other random or coincidence methods
- accepting the first option that seems like it might achieve the desired result
- listing the advantages and disadvantages of each option, popularized by Plato and Benjamin Franklin
- acquiesce to a person in authority or an "expert"
- calculating the expected value or utility for each option.
Cognitive biases – a pattern of deviation in judgment that occurs in particular situations. Cognitive biases are instances of evolved mental behavior. Some are presumably adaptive, for example, because they lead to more effective actions or enable faster decisions. Others presumably result from a lack of appropriate mental mechanisms, or from the misapplication of a mechanism that is adaptive under different circumstances.
In our courses we encourage a deliberate approach to addressing the decision at hand. We refer to this approach as providing decision support.
Decision makers are subject to their own biases

7. Dealing with Complex Issues
Comptroller of the Future
“The Comptroller of the future will increasingly be called upon to provide sophisticated analyses of both financial and non-financial alternatives.”
“Provide more analysis of the ‘why’ things happen, rather than the more traditional ‘what’ happened.”

8. Outline Decisions, decision making and decision support
The role of the financial manager in decision support
Decision support model
DFM&CS
Summary 8

9. The Call for Effective Decision Making and Decision Support
“… leaders must make the tough decisions that produce the best possible use of finite resources and improve the efficiency and effectiveness of our operations. Resource stewardship, and the tradeoffs between cost and performance, must become a part of every conversation.”
Occasionally we get the question, “Why the focus on decision support at a school chartered to train Financial Management professionals?”
Both our director and our board of directors, or advisory committee, believe that providing effective decision support is a core skill of financial management professionals.
Our nation is rapidly approaching, or already at, a very critical juncture regarding its fiscal well being. We all know the budgetary pressures we are under as a result of prolonged conflict in the middle east. Last year the Army delayed its program and budget submission to recost the role that the planners had assigned it. The result was a $14B increase in the FY08 Army budget over the initial guidance the Army received. Now the USAF is sounding the alarm, claiming an extra $20B/yr is needed over the next five years to ensure we have sufficient aircraft to sustain air superiority. Universally, the services are worried about the impact deferred equipment maintenance will have when the nation begins to draw down in Iraq and supplemental appropriations are reduced.
The impact of these defense related budget issues will be felt by all of us and soon! And it will be critical that we as Financial Managers are educated and capable of providing effective decision support to our leaders as they make the decisions that will be critical to our nations future.
Assistant Secretary of the Army for Financial Management and Comptroller Quote
Others services are issuing the same warning to their people –
- CSAF - (taken from the CSAF Strategy White Paper, Dec 07) – “Today’s confluence of global trends already foreshadows significant challenges to our organization, systems, concepts and doctrine. We are at an historic turning point demanding and equally comprehensive revolution. The future strategic environment will be shaped by the interaction of globalization, economic disparities and competition for resources;”
Honorable Nelson M. Ford, ASA(FM&C)
Taken from 2007 Army Financial Statement
Effective Decision Making is Critical to our Nation’s Future

10. Where We’ve Been… Where We’re Going
Strategic Context
Decision
Support
10%
Decision Support
75%
Control
&
Reporting
50%
TRANSFORMATION
In fact, we stress to our students that providing support to leaders and managers with decision making authority is rapidly becoming the KEY competency of a financial managers.
We know that today we spend an inordinate amount of our time on transactions processing, control and reporting…as much as 90 percent of our time. While we must never, and will never, lose sight of the fact that it is our responsibility to ensure over $500 billion of public monies are accounted for properly, we must meet that goal while reducing the time we spend in these areas and focusing instead on decision support.
The corporate world has clearly proven we can accomplish these objectives. As they have shifted away from manual transactions, they have demonstrated the ability to not only reduce the size of the operation and its cost, but to actually provide better customer service while at the same time greatly enhancing their decision support role.
There are many examples we can follow, but General Electric and IBM provide excellent examples. As they digitized their purchasing and payment process, and moved from less than 20 percent electronic purchases to about 95 percent, they saw their processing time go down from over 30 days to just one, while customer satisfaction skyrocketed from 40 percent to over 80 percent.
We are now firmly on a similar path…It will, however, take both time, training and money to accomplish.
Transaction Processing
40%
Control &
Reporting
20%
Transaction
Processing (5%)
FM Strategic Plan
Past
Future
(Scorekeeping)
(Advising)
UNCLASSIFIED
UNCLASSIFIED

11. Desired Future State
Ability to analyze issues to identify opportunities and risk before decisions are made.
Developed capability to statistically analyze data AND convert information into presentable/understandable options
Trusted advisor for resource spending in most effective/efficient manner to meet mission requirements…Pushing information to leadership for awareness of opportunities

12. Financial Advisors Building/Strengthening Networks/Relationships
Influencing Outcomes, Driving Decisions
Engaging Proactively
Analyzing Options/Developing Alternatives
Looking Forward…Future Perspective
We provide an education for our students that they can use to be trusted, effective financial advisors to their decision makers. We discuss competencies, skills and abilities that allow us as financial management professionals to be trusted advisors within our teams. We also share ideas on how to develop these competencies, skills and abilities and provide an environment in which students can work to develop these qualities in small group settings.
We try to get our students to consider what they would want from their personal financial advisor. Everyone typically agrees that they want a personal financial advisor who is well connected, readily available, proactive, who looks to the future, is able to make the complex simple and who can provide solid recommendations that we can act upon. That is the direction we believe the role of the financial manager is headed. We have to be able to adapt to the needs of the decision makers. We should not expect decision makers to change their style to accommodate us. We must embrace the role of being effective providers of creative, comprehensive, clear decision analysis and seek to provide true value to the decision making process within our organizations.
Effectively Communicating
Enhancing Value To Decision-Making
What do you expect from your personal financial advisor??

13. Outline Decisions, decision making and decision support
The role of the financial manager in decision support
Decision support model
DFM&CS
Summary 13

14. Decision Support Defined
Decision Support is enabling decision makers to make informed decisions that better utilize resources and improve mission effectiveness.
This definition was crafted through the combined efforts of the SAF/FM Transformation office and DFM&CS. DFMC&S uses this definition as the basis for describing decision support in all of its courses offered.

15. Decision Support Model
Identify the Issue
Analyze the Issue
Evaluation
Decision
Support
Develop Alternatives
Implementation
This is the model we teach at the DFMCS. It is one of many decision support models. It represents a systematic approach to arrive at the best decision recommendation.
We typically break the model into two parts for instructional purposes. The first part of the model, the right hand side of the model from roughly the twelve-o’clock position to the six-o’clock position is the portion of the model we focus on. We refer to this portion of the model as the pre-decision phase of decision support. We recognize the importance of the left hand side of the model, or the post decision phase. We talk about setting the stage for success in the post decision phase but by in large our focus is on the first five stages of the model.
The goal of the pre-decision phase of our decision support model is to clearly identify a comprehensive, high quality recommended decision to the decision maker.
In our courses we walk very deliberately through the model, exploring each phase independently before putting them together in more comprehensive exercises.
I will walk through each of the steps of the pre-decision phase beginning with the first step, identifying the issue.
Evaluate Alternatives
Decision Made
Make a Recommendation

16. Process
Decision Support is a two-phased process that provides leaders with viable alternatives, financial and non-financial impacts of choosing an alternative, a well supported recommendation, and a method for implementing the leader’s direction.

17. Process
In phase one, advisors combine information, tools and techniques to understand and analyze the environment.
In phase two, advisors use their analysis to develop, evaluate, and clearly communicate projections, alternatives, and impacts and make recommendations in a concise, actionable, and timely manner to decision makers who may or may not be subject matter experts.

18. Applied Skills for Successful Decision Support
Critical thinking and problem solving
Oral communication
Written communication
Teamwork and collaboration
Diversity
Information technology application
Leadership
Creativity and innovation
Lifelong learning and self direction
Professionalism and strong work ethic
Ethics/Social responsibility
Source:
“Are they really ready to work? Employers’ perspectives on the basic knowledge and applied skills of new entrants to the 21st century U.S. workforce” (2006). Published by: The Conference Board Inc, the Partnership for 21st Century Skills, Corporate Voices for Working Families and the Society for Human Resource Management.
In addition to these skills, the ability to think critically, and apply both quantitative and qualitative analysis of alternatives is necessary for the successful use of the decision support model. Lets spend a few minutes in the next few slides discussing these additional skills in more detail. 18

19. Leader’s Role
Leaders must create an atmosphere that enhances Decision Support by:
Empowering employees to apply critical thinking.
Entertaining out of the box alternatives.
Building diverse teams to get a full spectrum of ideas.
Encouraging brainstorming to enhance thinking.
Planning ahead, Decision Support needs time to develop the best alternatives.
Advocating Decision Support’s benefits in/out of your organization.
Building accountability to follow up on implemented decisions.
John Maxwell said, “Everything rises and falls on leadership.” This statement is certainly true for decision support as well. The success or failure of the application of decision support will depend on your ability to lead it and implement it.
Organizational cultures are hard to change, and if your organization does not currently support or use the decision support process, it may take time to bring about that change. Create buy in by teaching and training others about the model. Apply the model to easy scenarios at first so members can see the tangible benefits. Over time the culture will change. 19

20. Outline Decisions, decision making and decision support
The role of the financial manager in decision support
Decision support model
DFM&CS
Summary
We’ll discuss a variety of things this morning but I’d like to boil it down to three primary areas that we will focus on.
First, I’d like to spend some time talking about decision support and what exactly we mean when we use that phrase. The intent here is to get us all on the same sheet of music regarding what decision support is and why it is important for us to be talking about decision support today.
After defining decision support, I’d like to talk about the transitioning role of the Financial Management function and how we can be of greatest value to the organizations that we serve.
Then we will take a look at the model we use at the Defense Financial Management and Comptroller School to provide a framework for effective decision support.
Once we have finished discussing what decision support is, its relevance to what we do as financial managers and a framework we can use to effectively provide decision support I will give a brief overview of opportunities we offer at the Defense Financial Management and Comptroller School for additional instruction on these topics.
We will also have a follow-on workshop after this designed to go a little further in-depth into some of the skills and tools that financial managers can use to sharpen their decision support skills. 20

21. The Defense Financial Management & Comptroller School

22. DFM&CS Courses Defense Financial Management Course (DFMC)
Defense Decision Support Course (DDSC)
Joint Course – Army, Navy, Air Force, DFAS, DoD Agencies
Budgeters, Acquisition/Cost Personnel, Financial Managers, Financial Analysts, Accountants, Auditors, Comptrollers
Four Weeks
Six Times a Year
Target Grades – GS12+, 04+, E8+
Joint Course
Financial and Non-Financial
Five Days
Twice a Year
Target Grades – GS13+, 05+, E8+

23. Defense Financial Management Course
Designed to Develop or Enhance:
Decision support skill sets
Leadership and communication skills
Awareness of the multi-faceted financial management community
Strategic Orientation
Support for Contingency Operations

24. DFMC Curriculum
Joint Course – Army, Navy, Marine Corps, Air Force, DFAS, DoD Agencies
Budgeters, Acquisition/Cost Personnel, Financial Managers, Financial Analysts, Accountants, Auditors, Comptrollers
Four Weeks - Five Times a Year
Resident Faculty teach/facilitate 75% of course
Mention the Army’s Syracuse Course and the Navy’s Monterey Course. The differences are many:
Joint
Paperless Environment
4 graduate hours
Considered having the leading edge
Intense workload with Case studies
Emphasis on Decision Support
We discuss topics from the DOD Perspective which includes

25. DFMC Curriculum Leadership and Interpersonal Skills Decision Support
Contingency Operations
Strategic Environment
FM Framework
Developed in concert with senior FM representatives
Course focus
Develop Strategic Orientation
Improve Communication & Interpersonal Skills
Critically think about and apply Leadership Skills
Broaden awareness of diverse FM environment
Expand knowledge of Expeditionary/Contingency Operations
Prepare graduates to advise senior leaders in future strategic decision support roles

26. Defense Decision Support Course
Focuses on concepts to understand Decision Support
Defines Decision Support and the Decision Support Model
Describes Analysis Tools and Techniques
Reinforces Learning through Practical Exercises
Includes Graduates of PME and PMCS
Students should already possess a broad knowledge of the DOD FM environment, a strategic perspective

27. Defense Decision Support Course
Core Lessons
Decision Making Model
Decision Support Techniques
Advising Senior Leaders
Leadership and Decision Support
Creative/Critical Thinking
Identifying Trade-offs/Opportunity Costs
Tools/Techniques for Analysis
Risk Management
Effective Communication Skills
Numerous Practical Exercises

28. DFM&CS Course Schedule
Defense Financial Management Course (DFMC) – 4 weeks
COURSE #
DATE
STATUS
DFMC 08-C
31 Mar - 25 Apr 2008
Scheduled
DFMC 08-D
2 Jun - 27 Jun 2008
DFMC 08-E
11 Aug - 5 Sep 2008
Defense Decision Support Course (DDSC) – 1 week
COURSE #
DATE
STATUS
DDSC 08-C
May 2008
Scheduled
DDSC 08-D
Sep 2008

29. Student Testimony
“Great joint perspective with a good balance between technical info, broadening perspective, and emphasis on leadership.”
“To me, the strengths of the course is the emphasis on decision support.”
“Decision Support...I thought I knew what it meant, but I really didn’t until attending the course.”
“Best training I have ever had in my 25+ years of civilian federal service”
Hands On Exercises
Leadership Exercises
Decision Support
Joint Service Interaction
Diversity of Senior Level Guest Speakers
Diverse Faculty
Paperless Environment
Networking

30. Questions