Making Project Decisions

1. Making Project Decisions Life’s The noblest of pleasure is the joy of understanding Leonardo De Vinci

2. Decision Issues - 1 • Two skills critical to the quality of life are: • Parenting • Decision Making Formal training in either is rare

3. Fit Decision Maker A Fit Decision Maker • Understands the decision significance • Has the right decision statement • Knows the proper frame and the associated selection criteria • Knows the amount of uncertainty • Knows the information required and how to get it • Is skilled in the right decision process • Is able to manage peer group biases • Is emotionally centered and fit to make the decision

4. Systems Engineering Decisions • Requirements Determination • Concept Selection • Architecture Selection • Interface Definition • Specification Quantification • Requirements Flowdown • Lower Level Concepts and Architectures • Verification Plans • Validation Plans • Anomaly Resolution • Etc.

5. Decision Significance and Uncertainty First Customer for Bungee Jumping With New Company Critical Decision Zones Selecting A New Restaurant Uncertainty Open Heart Surgery By World’s Best Surgeon Selecting A Beverage To Drink Significance of Decision Consequence

6. High Uncertainty and High Consequence Example Accident ruling over bungee jump death Feb 25 2005Evidence from an inquest into the horrific death of a 22-year-old Welsh student at a charity jump raises safety concerns for jumpers across the UK. Chris Thomas plunged to his death after leaping from a 180ft crane in the car park of a pub in Swansea. An inquest heard yesterday that Chris weighed 132kg. But an expert investigation discovered that the rope holding him had a maximum load weight of just 90kg, and should not have safely held more than 70kg.

7. Two Relevant Questions We want to make good decisions, so what is a “good decision?” How are decisions and consequences related?

8. A Good Decision • A good decision is an alternative selection based on sound logic and relevant information (the head factor) and the selection is consistent with ethics based instincts (the heart factor) • A good decision selects the alternative with the best chance of achieving the opportunity (outcome) given the information available at the time • Decision processes provide guidance to achieving a logical selection

9. Outcomes (Consequences) • A good decision can result in a good or bad outcome • A bad decision can result in a good or bad outcome • Criticism of a good decision that resulted in bad outcome is unjustified, but it is common, especially by sports commentators

10. What is a Decision? Application of opportunity-seeking judgment resulting in action Decisions may or may not be binding Consequences may or may not be permanent Actions may include unmanageable risk • People judge themselves by their best intentions • Others judge people by their worst action F .

11. There Are A Variety Of Alternative Judgment Methods 8. Probability Based 7. Fact Based 6. Expert Based 5. Intuition Based 4. Emotion Based 3. Addiction Based 2. Authority/Peer Pressure Based 1. Indifference Based

12. Judgment Process Suitability 4 and 5 may influence the final selection Not suitable for business decisions 8. Probability Based Defensible for business decisions 7. Fact Based 6. Expert Based 5. Intuition Based 4. Emotion Based 3. Addiction Based 2. Authority/Peer Pressure Based 1. Indifference Based

13. Stockton Record Front page, 22 September 2006 The point is… What’s hard about decisions? Communication and language. Gov. Arnold Schwarzenegger and Lodi Resident Byng Forsberg My Younger Brother Takes on Governor Arnold Schwarzenegger! My younger brother is older than I am.

14. Defensible Decision Processes 7 Low Uncertainty Fact Based 6 Expert Based 8 High Uncertainty Probability Based Pugh’s Method Decision Tree Analysis Analytical Hierarchy Process (AHP) aka Pairwise Comparison Analysis Dominance Analysis Kepner Tregoe (KTA) Analysis Rank Summing Bayesian Team Support Expert Decides Consequence Table and Even Swaps Prioritize, Weight, and Rate +, 0, - Prioritize, Weighted Scores & Other Factors Prioritize, Weighted Scores & Other Factors Requires uncertainty and value attitude knowledge Requires beliefs, alternatives, preferences Sums relative criteria rankings Instant decision Informed Judgment Increasing Uncertainty Of Relevant Decision Information

15. Kepner Tregoe Form - Example Decision Statement: Alternative 1 Alternative 2 Alternative 3 Alternative 4 Evaluation Criteria: Musts (Go/No-Go): Score Score Score Score Wants: Weight Comments Raw Comments Raw Comments Raw Comments Raw R*W R*W R*W R*W ( R ) ( R ) ( R ) ( R ) Max Score (10xW): Total Score: Car “I believe that this nation should commit itself to achieving this goal, before this decade is out, of landing a man on the moon and returning him safely to earth” President John F Kennedy, May 25, 1961

16. Kepner Tregoe - Example Decision Statement: Select the best vehicle to meet the needs of the Patrick family. (Mom, dad, and three kids, ages 5 to 16) Alternative 1 Alternative 2 Alternative 3 Alternative 4 Evaluation Criteria: Domestic Car Japanese Sports Car Domestic Minivan Italian Sports Car Musts (Go/No-Go): Y Y Y N • Under $25,000 Y N Y N • Transport 5 People Score Score Score Score Wants: Weight Comments Raw Comments Raw Comments Raw Comments Raw R*W R*W R*W R*W ( R ) ( R ) ( R ) ( R ) • 20.0 MPG 8 10 80 6 48 • Fuel economy • 26.2 MPG 6 3 18 10 60 • 7.0 sec • Good acceleration • 10.5 sec • Large Capacity • Carry Garden Supplies • Small capacity 10 2 20 10 100 • Avg. Ratings • Crash Safety • High Ratings 9 10 90 7 63 • Conservative • Good for dates (16 yo.) • “Cool image” 4 10 40 6 24 Max Score (10xW): 370 248 295 Total Score: Max Score = Sum of Weights X 10 May wish to “normalize” so that max score is 100 or 1000

17. Evaluate Other Factors That Can Influence The Selection For the highest scoring alternatives evaluate other factors Factors not evaluated New evidence Emerging opportunities Emerging risks Incorporate actions to enhance opportunities and mitigate risks Re-score candidates Make informed selection TROUBLE! People in my path!

18. Other Factors Evaluation – Kepner-Tregoe Example Decision Statement: Select the best vehicle to meet the needs of the Patrick family. (Mom, dad, and three kids, ages 5 to 16) Alternative 1 Alternative 2 Evaluation Criteria: Alternative 3 Alternative 4 • The decision process is not complete until other factors have been considered. • The highest scoring candidate may not be the best choice. Domestic Car Japanese Sports Car Domestic Minivan Italian Sports Car Musts (Go/No-Go): • Under $25,000 Y Y Y N • Transport 5 people Y N Y N Wants: Score Score Score Score Weight Raw (R) Raw (R) Raw (R) Raw (R) Comments Comments Comments Comments R*W R*W R*W R*W • Fuel Economy 26.2 MPG avg. 10 80 20.0 MPG avg. 6 48 8 • Good acceleration 3 18 10 60 10.5 sec 7.0 sec 6 • Carry garden supplies 2 20 10 100 Small capacity Large capacity 10 • Crash safety 10 90 7 63 9 High ratings Ave. Ratings • Good for dates (16 yo) 10 40 6 24 4 “Cool image” Conservative 370 Max Score (10xW): 248 295 Total Score: Mid-Size Domestic Domestic Minivan Residual Risk Issue P S Issue S P 1. If reliability does not improve from last year’s model (as dealer promised), the car will require service more often H L 1. Recent crash tests reveal poor occupant protection and new owners reporting below advertised gas mileage H H P = Probability S = Seriousness H = High M = Medium L = Low 2. If family size is increased sedan will not be large enough L H Selected

19. Success in Decision Making in Capability-Based Acquisition Concepts • Customer involvement • Concurs in problem statement • Reviews and concurs with criteria and weights • Understands options (which include favored approach, if known) • Reviews final results before, not after, the presentation • Your management support when needed • Clear presentation of results • Use graphic display of numeric data whenever possible • Use KTA Matrix whenever possible • Use tabular display of numeric data as supporting info

20. Questions? Comments? Discussion?