Robust Decisions

1. Robust Decisions Transforming Business Through Sound Decisions

2. Why Is It Difficult to Make Good Decisions? • Uncertainty • Increasing complexity • Incomplete and evolving data • Dynamic business conditions • Organizational barriers • Poorly understood information • Widely dispersed teams

3. How Much Do Bad Decisions Cost? • Lost Time • Lost revenue • Reduced productivity • Low morale • Lost market share • Worse…?

4. 50% of Decisions Fail • “Why Decisions Fail” Paul Nutt, 2002 • 400 decisions made by senior managers • Half of these decisions failed • Failure: The action taken was not in effect 2 years later • Three classes of “blunders” • Two out of every three decisions were made with failure prone practices. • Premature commitments, jumping on first idea – a key cause of failure • People spend time and money on the wrong things Many decisions are actually efforts to justify vs. evaluation to select the best possible alternative.

5. Understand the Problem (Framing) • Clarify the Issue • Generate Alternatives • Develop Criteria Stakeholders and decision-makers Evaluate alternatives relative to the Criteria Fuse evaluation results to develop decision measures • Decide what to do next • Work to gain consensus • Reduce uncertainty • Refine Criteria • Refine Alternatives • Choose an alternative and document the deliberation and decision Move to next issue Decision Making Processes Decisions are a process, not an event!

6. Decision matrix Pugh’s Method, Kepner Tregoe, Multi-Attribute Utility Theory (MAUT) Confidence vendor meets criterion 5 = very high 1 = very low “The Mechanical Design Process” 3rd edition, David G. Ullman, McGraw Hill, 2003

7. Decision matrix, weaknesses • Uncertainty not addressed • Incomplete information excluded • Evaluation results inconsistently represented • (How do numbers in the matrix tie to the qualitative and quantitative evaluation results?) • Little guidance on what-to-do-next • Decision risk not represented • Team members’ evaluations not combined

8. Criteria • QFD -Quality Function Deployment • Doors • Specs • Alternatives • TRIZ • Morphologies • Portfolios • Evaluation • Simulation • Testing • Prior Knowledge • Opinion Uncertain Evolving Incomplete Conflicting Uncertain Evolving Incomplete Conflicting Uncertain Evolving Incomplete Conflicting • Bayesian Team Support • Information fusion • What-to-do-next analysis • Satisfaction and risk analysis • Decision capture tool • Decision management platform How Methods Fit into Processes

9. A Well Managed Decision is Robust A robust decision: • Looks good later • Has customer and team buy-in • Is as insensitive to uncertainties as possible • Was made with known anticipated satisfaction and risk

10. Decision Making w/ The Accord™ Decision Making software solution uniquely supports BTS by leveraging powerful mathematical algorithms that cannot be handled manually. • Factors in both Quantitative and Qualitative input • Displays results from each person’s point of view • Calculates the Risks • Identifies what steps might improve the decision process

11. One-screen Graphical Interface Provides structure Instant Feedback - Problem visualization

12. Engineer, on site Use Scenario (Accord™Network) 1. 1. Identify alternatives and criteria and saves them on the server database. Has administrative oversight/control Consultant, New York City Issue owner 2. Team evaluates information. Results saved to server database Analyst, London 5. Report, document, and reuse results and process. 4. Team refines information at owners’ request. Server 3. Interpret analysis results Database

13. Decision Management application areas • Concept Selection • Product Development • Process Design • Process Improvement • Project Management • IT Portfolio Management • Proposal Evaluation • Business Strategy • Hiring/Review Process

14. Decision Making at Boeing, Space and Communications Division Project Decision Needed: Select a Delta Rocket nozzle modification to propose in an uncertain environment. • Unrefined information: some even qualitative • Conflicting information: evaluation and importance varies across team members • Evolving information: problem is changing with time • Incomplete information: evaluation is incomplete

15. Boeing’s Benefits • Ability to manage uncertainty of knowledge • Increases confidence in decisions • Helps target areas for risk mitigation • Significant potential time saving due to lowering the risk of repeating a design cycle in the development process. • Ability to manage strong personalities • Facilitates team consensus • Allows productive discussion of different views

16. Who Can Benefit? • Major (<1000 employee) organizations • Geographically dispersed teams • Highly competitive and fast moving industries • Mid-to-senior managers in those organizations making mission-critical decisions

17. How Will They Benefit? • Improve your teams’ performance • Manage organizational uncertainty and doubt • Empower the decision makers in the organization • Transform difficult processes into well-structured • Re-use, review of decisions • Build accountability

18. How Do I Find Out More? • Visit: www.robustdecisions.com • Contact: Tom Satterley 215-396-7332 • Arrange for a Consultation/Demo • Try Accord for 30 days with no risk