1. Decision and Risk Analysis Affinity Diagram

2. Decision and Risk Analysis Decision Analysis Process Identify Problem Identify Objectives (values) Identify Alternatives Decompose and Model Problem – Structure – Uncertainty – Preference Choose Best Alternative Sensitivity Analysis More Analysis Needed Make Recommendation Yes No

3. Decision and Risk Analysis Affinity Diagrams An Affinity Diagram is a tool that gathers large amounts of language data (ideas, opinions, issues) and organizes them into groupings based on their natural relationships Affinity process is often used to group ideas generated by Brainstorming Method: 1.State the issue to be examined in broad terms, such as an open ended question or statement. 2.Generate and record ideas using Post-it notes. Begin sticking them on a wall or large sheet of chart paper, in no particular order, and where everyone can see them 3.Arrange the notes in related or similar groupings 4.Choose a word or phrase that captures the intent of each group and place it at the top as a category name or title

4. Decision and Risk Analysis Example Selecting courses for Summer

5. Decision and Risk Analysis Brainstorming- Step 1 Generate Ideas Selecting courses for Summer

6. Decision and Risk Analysis Display Ideas -Step 2 Time of the day Day of the week Cost of books Cost of credit Difficulty level Professor Selecting courses for Summer

7. Decision and Risk Analysis Sort Ideas into Groups -Step 3 Time of the day Day of the week Cost of books Cost of credit Difficulty level Professor Selecting courses for Summer

8. Decision and Risk Analysis Create Headers -Step 4 TimeCostQuality Selecting courses for Summer

9. Decision and Risk Analysis Draw the final Affinity Diagram – Step 5 Selecting courses for Summer Time of the day Day of the week Cost of books Cost of credit Difficulty level Professor TimeCostQuality

10. Decision and Risk Analysis Decision Analysis Process Identify Problem Identify Objectives (values) Identify Alternatives Decompose and Model Problem – Structure – Uncertainty – Preference Choose Best Alternative Sensitivity Analysis More Analysis Needed Make Recommendation Yes No

11. Decision and Risk Analysis Value Focused Thinking Chapter 6 Structuring Decisions Chapter 3 Affinity Diagram Quantitative value hierarchy model

12. Decision and Risk Analysis Value Focused Thinking

13. Decision and Risk Analysis Where are we going? Our goal is to build a “Value Function” –Quantifies the benefit that we get from implementing a decision alternative –Type of utility function –Typically maps anticipated benefit to a dimensionless number (utility) –Used for comparison purposes (which alternatives do more to give the decision make what he/she wants) –Can be used as an objective function for optimization Helps overcome the things that make a decision hard to make First step in building a value function is to identify the DM’s values

14. Decision and Risk Analysis Values Values – Those things that are important to a decision maker, things that they care about Values are fundamental to all we do Values should drive decisions

15. Decision and Risk Analysis Identifying Values Interact with decision makers Elicit feedback throughout design process or analysis Values are stated through objectives 3 Features of objectives (1) Decision Context (2) Object (3) Direction of Preference ex. Forest products company wants to “minimize environmental impact” (1) Decision Context - Harvesting Trees (2) Object - Environmental Impact (3) Direction of Preference - Minimum is best

16. Decision and Risk Analysis Value Focused Thinking Uncover hidden objectives Creating alternatives Identify Decision Opportun- ities Guiding Strategic Thinking Inter- connecting decisions Guiding Information Collection Evaluating alternatives Improving Commun- ication Involving Multiple DM’s Where does thinking about values lead? Keeney, Ralph L., Value-Focused Thinking: A Path To Creative Decision making, Harvard University Press, Cambridge, MA, 1992, pp. 3-28.

17. Decision and Risk Analysis Ways to Identify Values - Professor Gregory Parnell, USMA Gold Standard: based on an approved vision, policy, strategy, planning, or doctrine document –Values have been thought about, discussed, and written down –We use work that has already been done and approved Platinum Standard: based on interviews with decision- makers and stakeholders –Often difficult to get enough time with stakeholders and DMs –Use Affinity Diagram for group settings (will discuss later) Silver Standard: uses data provided by stakeholder representatives –When real DMs and stakeholders are not available –Still use Affinity Diagrams for groups Combined Standard: combination of the above

18. Decision and Risk Analysis Process of Identifying Values 1.Research potential Gold Standard documents Recognize that environment might have changed Results of research must be validated with DMs 2.Interview Stakeholders and/or Decision Makers Validate Gold Standard work If none, elicit values directly 3.Interact with lower level representatives as necessary Fill in the blanks Make sure you are consistent with thoughts of DMs 4.Combine above as necessary Note: always check regularly with the decision makers or reps!

19. Decision and Risk Analysis Structuring Objectives Initial list has “non-objectives’’ – Alternatives – Constraints – Criteria for evaluation Convert “non-objectives” into objectives – Means objectives – Fundamental objectives Why is each important? – Means Objective: similar to smaller objectives that lead to the fundamental objective – Fundamental Objective: Main objective

20. Decision and Risk Analysis Values help guide strategic thinking Means Obj 1Means Obj 2Means Obj 3 Fundamental Objective Strategic objectives should guide our decision-making Strategic objectives are stable over time although the means to obtain these objectives vary over time.

21. Decision and Risk Analysis My professional values help guide my strategic planning Be an internationally recognized Military OR Analyst and Professor Be an excellent teacher & mentor Publish important research & be in demand as consultant Perform significant professional service Fundamental Objective Means Objectives

22. Decision and Risk Analysis Affinity Diagrams Example Scenario: The Global War on Terrorism has continued. Intelligence sources indicate that a country (Red), that is a known supporter of terrorism, is developing a Weapons capability at a facility in a populated urban area. After diplomatic discussions failed to have an impact on the leadership of Red, Blue (NATO) decides to “send a message” by an attack that will disrupt operations of the weapons facility. NATO Commander’s Intent: The combatant commander has decided to attack the electrical power grid to achieve the effect of disrupting the operations of the weapons facility. The commander’s intent is that the attack should be non-attributable to Blue, that the effects of the attack should be for a short duration (to preclude a long term disruption to Red’s economy), and that the attack should not result in Red civilian casualties. Analysis Methodology: The leader of the combatant commander’s analysis cell has decided to use Value-Focused Thinking to develop an Effect Based Operations value model for targeting course of action evaluations.

23. Decision and Risk Analysis Affinity Diagrams Example (continued) Fundamental Objective: The fundamental objective is to “develop the best COA to achieve the commander’s intent.” Value Model Standard. Since our research found three Gold Standard documents, we used the Combined Standards approach. The three Gold Standard documents used were: –JP 3-60, Joint Doctrine for Targeting, 7 January 2002 –JP 3-13, Joint Doctrine for Information Operations, 8 October 1998 –JP 3-0, Doctrine for Joint Operations Doctrine, 10 September 2001 Data for Affinity Diagrams. Focus research on verb-object combinations that defined the targeting objectives from the Gold Standard documents and additional research

24. Decision and Risk Analysis Affinity Diagrams Example (continued)

25. Decision and Risk Analysis Affinity Diagrams Example (continued)

26. Decision and Risk Analysis Affinity Diagrams Example (continued)

27. Decision and Risk Analysis Affinity Diagrams Example (continued) Resulting Qualitative Value Model

28. Decision and Risk Analysis In summary

29. Decision and Risk Analysis General Qualitative Value Model (Value Hierarchy) Fundamental Objective Function 1Function 2 Objective 2.1Objective 2.2 Evaluation Measure 2.2.1 Evaluation Measure 2.2.2 Objective 2.3 Function 3 There can be multiple tiers or levels so that the problem can be subdivided into small enough pieces At the bottom tier are the attributes or measures or metrics that are used to quantify achievement in the objectives Use terms most appropriate for the domain

30. Decision and Risk Analysis Building a Qualitative Value Model Step 1: Identify the fundamental objective Step 2: Identify functions that provide value Step 3: Identify the objectives that define value Step 4: Identify the value measures

31. Decision and Risk Analysis Overall Method We Will Employ Start with values (not alternatives) Generate better alternatives based on values Evaluate alternatives using values This is the Value Focused Thinking (VFT) Philosophy Multiple Objective Decision Analysis is the mathematical technique used to implement VFT Also called: –Multiple Attribute Utility Theory –Multiple Attribute Value Theory –Multiple Attribute Preference Theory