Decision Analysis by Dr. AA

1. Decision AnalysisbyDr. AA

2. Man decides based on what he believes…Man believes what he want to believe…

3. Decision Analysis 1. Clarify purpose State the decision Develop objectives Classify objectives into MUST and WANT Weigh the Wants 2. Evaluate Alternatives Generate Alternatives Screen alternatives against the MUSTs Compare alternatives against the WANTs 3. Assess Risks Identify adverse consequences 4. Make Decision Make the best balanced choice A systematic process for making a choice To balance benefits and risks

4. State the Decision Ask What do we need to decide What are we trying to do Write a short statement that includes Choice of words Result 1 or 2 key modifiers Clarify Purpose Evaluate Alternatives Assess Risks Make Decision Short statement describing the intended result of a decision To keep decision makers on track

5. Develop Objectives Ask What results do we want? What resources should we use or save? (people, equipment, money, time, space…) What law, regulation, or policy restrictions should we consider? List in short statements Clarify Purpose Evaluate Alternatives Assess Risks Make Decision Identify Criteria that will influence the choice To help you evaluate alternatives fairly

6. Classify objectives into Must and Wants Ask Is this objectives” Mandatory ? (required) Measurable? (set limit) Realistic? (can be met) Yes to all 3 = MUST – label (M) All others are Wants Clarify Purpose Evaluate Alternatives Assess Risks Make Decision Determining the role objectives will play in the decision To be clear about what is mandatory and what is desired

7. Weigh the WANTs Ask What is the relative importance of each WANT? Identify the most important WANT(s), give it (them) a 10 Compare others to it (them) and assign numbered weights Check weights by comparing to the 10’s Clarify Purpose Evaluate Alternatives Assess Risks Make Decision To show how much each WANT will influence the choice Assigning relative values to WANT objectives

8. Generate Alternatives Ask: What choices do we have? Look at: Decision statement Key Objectives Information sources: experts, catalogues, … List alternatives without evaluation Clarify Purpose Evaluate Alternatives Assess Risks Make Decision To expand the number of choices and increase the chances of picking a winner Identifying or creating possible choices

9. Screen Through the MUSTs Ask: Does this alternative satisfy this MUST limit? Gather and record factual data Determine if Go or No Go Eliminate any No Go alternatives Clarify Purpose Evaluate Alternatives Assess Risks Make Decision To eliminate choices that do not meet minimum requirements Determining if alternatives meet the MUSTs

10. Compare Alternatives against the WANTs Ask: How does this alternative satisfy this objective? Gather and record factual data Compute score for each objective Score best performer for each objective (with a 10) Score relative performance of remaining alternatives (0-10) Multiply objective weight x score Total the weighted score Clarify Purpose Evaluate Alternatives Assess Risks Make Decision Evaluating relative performance of alternatives To determine which alternatives create the most benefit

11. Identify Adverse Consequences Ask: If we do this, what could go wrong ? Are we close to any MUST limits ? What disadvantages are associated with this alternatives ? Is any information vague or uncertain ? List each risk you find in an “if… then…” format Clarify Purpose Evaluate Alternatives Assess Risks Make Decision Identifying future threats for best performer(s) To understand the risk of choosing an alternative

12. Make the Best Balanced Choice For the best performing alternative, ask: Are we willing to accept the risk(s) to gain the benefit of this choice? If yes, pick it If no, repeat for the next best alternative Clarify Purpose Evaluate Alternatives Assess Risks Make Decision Selecting an alternative that best meets criteria with acceptable risks To commit to a choice

13. TECHNIQUES

14. Decision Analysis Techniques • Test the level of the Decision • Audit Objectives • Assess the Threat • Present and Assess Recommendations

15. Test the Level of the Decision Be conscious of any prior implied decisions Examine the decision statement and ask: What impact does each word have on our choice? What happen if we use a different word ? What need does this decision address ? What is the fundamental purpose of the decision ? Evaluating the type and range of alternatives To improve the decision making process

16. Audit Objectives Ask: How does each objective relate to the Decision Statement ? Are the objectives separated ? Are any objectives duplicates ? Are any objectives features of one alternative ? Are MUSTs mandatory, measurable and realistic ? Reviewing objectives before generating alternatives To ensure a complete, balanced set of objectives

17. Audit Objectives (continued) Ask: Should any MUST be reflected as WANT ? Have short- and long-term objectives been balanced ? Do the added weights of related objectives reflect the intended emphasis ? Have all stakeholders been adequately represented ? Reviewing objectives before generating alternatives To ensure a complete, balanced set of objectives

18. Asses the Threat Ask: How likely is each adverse consequence ? (probability) What impact will this adverse consequence have ? (seriousness) Use “if …Then …” format ? Mark each threat High/Medium/Low for both probability and seriousness ? Determining the degree of risk of each adverse consequence To help understand which risks are acceptable

19. Present Recommendations Use process to arrive at your recommendation. State your choice and describe your process. Make sure risks are visible. Confirm that the decision maker is ready to choose. To help others make a balanced choice Formally expressing a preferred choice

20. Things to Do When Recommending Agree on the Decision Statement and objectives first (if possible) Describe the most important objectives at the start Explain how many alternatives you considered Describe how any “pet” alternatives were considered Show why your choice perform well Make sure any risks for your choice are understood.

21. Things to Avoid When Recommending Assume agreement on your Decision Statement and objectives Hand out the matrix during your presentation Use jargon that the decision maker does not understand Be too negative about any “pet” alternatives Use vague or doubtful information Hide risks DO NOT…

22. Assess Recommendations What were the most important things you considered when you worked on this decision ? How many alternatives did you consider ? Why did you select this one ? What risks do we face with this alternative ? To improve your confidence in the recommendation Using effective questioning and listening to evaluate recommendations Ask:

23. Things to Do When Assessing Understand the need being met by the decision Understand why the level of the decision is where it is Understand why the key objectives are important Listen to the recommendation Look first for evidence of use of a rational Process, then examine the content Understand the risks Provide feedback to the presenter

24. Things to Avoid When Assessing Rush to judgment Focus too much on smallest details Interrupt except to clarify Assume enough stakeholders have been considered Assume all the risks have been presented Provide punishment for making a recommendation Do not…

25. The Next Time You make decision,… Try Using Decision Analysis The End