2. Getting Started – Organization for Effective Decision-Making

3. 2 1.05 Getting Started Careful planning helps ensure efficient, successful decision- making. Determining the Appropriate Decision Process Building the Decision Team Planning Interaction Points Creating a Shared Project Vision Project Team Decision Board Decision Team

4. 3 1.05 Getting Started The Dialogue Decision Process can add significant value when applied efficiently and appropriately. Frame Evaluated Alternatives Plan Recog- nize Situation Approve Frame Approve Alternatives Approve Plan Develop Alternatives Assess Situation Evaluate Alternatives Plan for Implementation Make Decision Decision Board Project Team Dialogue Decision Process

5. 4 1.05 Getting Started The first decision is whether to embark on a formal decision- making process. 1.Will this decision irreversibly allocate resources? 2.Is there more than one compelling alternative? 3.Are the impacts of the decision significant? 4.Is this a major decision (i.e., not routine)? 5.Is the decision organizationally and analytically complex? 6.Are the consequences of the decision uncertain? 7.Is there time for thought before the decision is made? 8.Do stakeholders have different agendas or value measures? 9.Will a formal decision process add significant value? Questions to Answer YesNo If most answers to questions 1–9 are “yes,” then the process will likely add significant value.

6. 5 1.05 Getting Started The appropriate timing depends on the scale and complexity of the decision. Typical Example—Moderately Complex Project Strategy Process Step 12345 Months 1.Assess business situation 2.Develop alternatives, information, and values 3.Evaluate alternatives 4.Decide among alternatives 5.Plan for implementation 6.Implement strategy and manage transition Decision board meetings

7. 6 1.05 Getting Started Determining the Appropriate Decision Process Building the Decision Team Planning Interaction Points Creating a Shared Project Vision Careful planning helps ensure efficient, successful decision- making. Project Team Decision Board Decision Team

8. 7 1.05 Getting Started The decision team comprises a decision board and project team. Decision Board Members:Decision-makers Responsibilities: “Declare” decision, approve frame, provide values and trade- offs, and make decision Selection criterion:Collective choice by this group unlikely to be overturned Project Team Members:Analysts and subject-matter experts Responsibilities:Develop frame and alternatives, assess information, evaluate alternatives, plan implementation Selection criterion:Recognized by decision board as credible experts and analysts Decision Team

9. 8 1.05 Getting Started The client project leader heads the project team. Responsible for overall decision process involving the right people, perspective and client data. Often responsible for implementation Decision-maker responsible for the project team and its activities Project Team Client Project Leader * Usually 100% Commitment*

10. 9 1.05 Getting Started The decision facilitator brings expertise in all aspects of how the decision process works. Expert in the tools of decision analysis Expert in guiding the decision process Usually an “outsider,” impartial to the proceedings Leads project team meetings Project Team Decision Facilitator

11. 10 1.05 Getting Started Other team members are often midlevel managers who have limited time. Familiar with the whole problem Critical to success of the decision process and implementation Project Team Limited ability to commit significant time to the project

12. 11 1.05 Getting Started Determining the Appropriate Decision Process Building the Decision Team Planning Interaction Points Creating a Shared Project Vision Careful planning helps ensure efficient, successful decision- making. Project Team Decision Board Decision Team

13. 12 1.05 Getting Started The key concept is periodic handoffs of distilled information. Decision Board Frame Alter- natives Plan Project Team Purpose Perspective Scope Alternatives Information Values Evaluated Alternatives Risks/Returns Insights Transition Agenda The project team uses several tools to produce highly productive interactions. Evaluation

14. 13 1.05 Getting Started At their first meeting, the decision board and project team agree on the project frame. Evaluation Plan Decision Board Project Team Frame Alter- natives Issues Business Situation Market Assessment Influence Diagram Decision Hierarchy

15. 14 1.05 Getting Started The second meeting addresses the alternatives and information developed by the project team. Evaluation Plan Decision Board Project Team Frame Alter- natives Strategy TableStrategic Rationale Theme: Pros Cons

16. 15 1.05 Getting Started In the third meeting, the decision team examines each alternative’s sources of risk and value. Plan Decision Board Project Team Frame Alter- natives Evaluation Assessed Probabilities Spreadsheet ModelDecision Tree Probability Distributions Deterministic Sensitivity ABC 1 2 3 4 5 The decision board certifies the quality of the project team’s analysis.

17. 16 1.05 Getting Started The fourth meeting addresses plans for implementation. Decision Board Project Team Frame Alter- natives Evaluation Strategic Plan $$$$$$$$$$ ProjectsBudgetsOrganizationPlan

18. 17 1.05 Getting Started Determining the Appropriate Decision Process Building the Decision Team Planning Interaction Points Creating a Shared Project Vision Careful planning helps ensure efficient, successful decision- making. Decision Team Project Team Decision Board

19. 18 1.05 Getting Started Change Log VersionDateChanges 0108/06/27First version for DAF - SDG LS (modified by Bill Shew from DCW GS v1.05) 0209/23/09Updated to IMS Template (MC) 307/19/10Updated with minor revisions 406/07/12 Updated to IMSCG Template (LJ)

20. 19 1.05 Getting Started Appendix

21. 20 1.05 Getting Started Decision Board The success of any project depends critically on careful makeup of the decision board. Require of board members: −Active participation in working sessions that build and certify decision quality (~12 hours) −Delegation of authority for this decision if decision-maker cannot afford the time −Willingness to mold consensus within board and reach a decision—no proxies Board members should be at the lowest level in the organization consistent with empowerment. Involve any organization: -Required for (or supportive of) approval -Needed to provide significant resources -Necessary for implementation

22. 21 1.05 Getting Started Project Team The project team makeup should reflect the makeup of the decision board. Add expertise on specific issues as needed. Include people whose buy-in is needed for implementation. Include participants from: -All board members’ organizations -All necessary functional areas

23. 22 1.05 Getting Started A useful first step on any project is to agree on a one-page vision statement. “Eighty percent of Silicon Valley project disasters could have been avoided if the team had answered three simple questions before it started.” —Charles Golden The “Red Adair” of project managers

24. 23 1.05 Getting Started This sample vision statement guided a successful strategy- development project. Project Vision Statement What are we going to do? We will recommend a strategy for eliminating PCBs from our current product line. We will evaluate strategic alternatives using an overall profitability measure that reflects our objectives of: sustaining sales with minimal impact on cost and performance, improving corporate environmental image, and capitalizing on any new opportunities. The strategy will encompass decisions on technology, production, rollout plans, supplier strategy, service, and public policy position. Why are we doing this? International agreements and government regulation are limiting the production and use of PCBs. The company has publicly declared its intention to stop using PCBs as soon as a practical alternative is available and can be implemented. This project is designed to help fulfill this commitment while improving our competitive advantage in the market and improving our corporate environmental image. How will we know if we are successful? We have satisfactorily addressed all of the important issues and have provided management with enough information to support approval of the recommended strategy. Management has approved the time frame for the conversion and rollout plan and has agreed on a plan for responding to regulatory and technical uncertainties. How could we fail? We will fail if we do not get all the right people (real decision-makers, all functions) involved. Failure would also result from not finishing the project on time or not reaching any new insights. Project Vision Statement What are we going to do? We will recommend a strategy for eliminating PCBs from our current product line. We will evaluate strategic alternatives using an overall profitability measure that reflects our objectives of: sustaining sales with minimal impact on cost and performance, improving corporate environmental image, and capitalizing on any new opportunities. The strategy will encompass decisions on technology, production, rollout plans, supplier strategy, service, and public policy position. Why are we doing this? International agreements and government regulation are limiting the production and use of PCBs. The company has publicly declared its intention to stop using PCBs as soon as a practical alternative is available and can be implemented. This project is designed to help fulfill this commitment while improving our competitive advantage in the market and improving our corporate environmental image. How will we know if we are successful? We have satisfactorily addressed all of the important issues and have provided management with enough information to support approval of the recommended strategy. Management has approved the time frame for the conversion and rollout plan and has agreed on a plan for responding to regulatory and technical uncertainties. How could we fail? We will fail if we do not get all the right people (real decision-makers, all functions) involved. Failure would also result from not finishing the project on time or not reaching any new insights.