The Kaizen Forum

THE KAIZEN FORUM

DECISION MAKING

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DECISION MAKING
A decision is a judgement. It is a choice between alternatives. It is rarely a choice between right and wrong. It is at best a choice between almost right and probably wrong.
DRUCKER

A manager by profession is a decision maker; Uncertainty is his opponent, overcoming it is his mission.

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CONCEPTS TO BE COVERED
When making decisions dont get paralysis through analysis.
Limitations of rational decision making model Models of decision making. Individual vs Group decision making.. Your individual decision making style? Why decision fails? Guidelines for decision making.

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DECISION PROCESS

Recognize
Problem

GATHER FACTS

GENERATE

1 2 3
DEFER DELEGATE DECISION
MAKE

MATCH ASSESS RESULT IMPLEMENT

MONITOR

CONSTRAINTS OF RATIONAL DECISION MAKING

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I never sit on a fence.Iam either on one side or

another
Harry Truman
1.

PROBLEM
Seldom consensus as to the definition of the problem. Differentiate fact from opinion. Identify what standard is violated.

2.

GENERATE ALTERNATIVE SOLUTION

The first acceptable solution is usually accepted. Alternatives are based on what was successful in the past. Specify alternatives that are consistent with goals

CONSTRAINTS OF RATIONAL DECISION MAKING

3.

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EVALUATE ALTERNATIVES
Limited information available about each alternative.
Satisfactory solutions, not optimal ones, are usually accepted. Do not evaluate main effects and side effects.

4. IMPLEMENT AND FOLLOW UP

Resistance to change is a universal phenomenon. Not always clear what part of the solution should be monitored or measured in follow-up.

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MODEL OF DECISION MAKING

DECISION PROGRAMMED NON PROGRAMMED

ON GOING / RULES STRUCTURED EMPRICAL

REQUIRES THINKING UNSTRUCTURED NOT UNIQUE

MODEL

CLASSICAL

ADMINISTRATIVE

1.

Approach

Rational/Objective Prescriptive (Idealized situation) Complete Low

Satisficing Approach Descriptive (Reality Based) Fragmentary High Only a few Broad Spectrum

2.
3. 4. 5. 6.

Type
Knowledge Probability of risk

Alternatives available Many Goals Defined

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MODELS
The ideal number for a hard decision-making

meeting is two--- with one on holiday !

CRISES SPEEDY ACTION INTUITIVE RIGID TIGHT CONTROL SHORT RANGE

SINGLE

COMPLETE NOT SH SHARED AIMED AT PERFECTION DEFINED GOALS

SNAP
MIN
PARTICIPATIVE ADAPTIVE CHANGEABLE EXPLOITIVE SHIFT FOCUS

ANALYTICAL INFORMATION
CREATIVE COOPERATIVE BROAD GOALS TEAM WORK

C O N C L MAX U S I O N

FLEX

MULTIPILE

CONTINGENCY

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DIFFERENCES
WESTERN
1. Finding an answer. 2. Adhere to group think. 3. Struggle for the right answer. 4. Have to sell decision. 5. Always in a hurry to decide quickly. 6. Plans run into problem.

JAPANESE
1. Defining the question. 2. Consensus encourage dissenting opinions. 3. Focus on alternatives 4. Process delegates authority. 5. Take longer time to decide. 6. Execute with speed

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GROUP THINK
A good CEO will try and anticipate a difficult problem requiring logical analytical decision making and set in motion the machinery for providing necessary information.
FAULTY DECISION MAKING STYLE WHICH DESIRES UNANIMITY AT THE EXPENSE OF QUALITY DECISION 1.

CONDITIONS
Highly cohesive group Under pressure to make decision

2.

SYMPTOMS
Not being critical of each others ideas. Selective in gathering information. Believe in group morale. Lack of accountability.

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EFFECTIVE GROUP DECISION MAKING

Leadership
1.Avoid domination. 2.Encourage input 3.Avoid groupthink And satisficng. 4. Remember goals. Effective group Decision making Constructive conflict 1. Air legitimate difference 2.Stay task-related. 3.Be impersonal. 4.Play devils advocate.

Creativity 1.Brainstorm 2. Avoid criticizing 3. Exhaust ideas. 4. Combine ideas

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NEMAWASHI! THE TOYOTA WAY

Make decision slowly be consensus. Thoroughly considering all options. Implement rapidly
1.

Thorough Consideration
Quality of decision
Asking why? 5 times Building Consensus Deming Cycle (PDCA)

Contd

ALTERNATIVE TOYOTA DECISION MAKING METHODS

Preferred
Group Consensus, Management Approval

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Group Consensus, with full authority

Seek Individual Input, then Decide and Announce Decide and Announce

Seek Group Input, then Decide and Announce

Fallback

Fallback (if consensus not achieved)

Time

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NEMAWASHI! THE TOYOTA WAY

2.

Considering Alternative Solution

Follow set based Approach

Different people-different set of alternatives

Turn conflict into win / win situation

3.

Presenting Decision on one page

Proposal discussed with all Agreement befor presentation One page formal decision only formality

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EXAMPLE OF AN A3 REPORT
CURRENT SITUATAION PROPOSAL PLAN

IMPLEMENTATION

LABOR COST & TIME ANALYSIS TIME SAVINGS

CONTROLS

TIME LINE

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DECISION STYLES
High

Analytical
Careful decision makers Adapt to new situation

Conceptual
Broad outlook examine more alternative long range find creative solution

Tolerance for Ambiguity

Directive
Efficient,logical use less information, few alternative make decision fast focus on short-term

Behavioral
Work well with others Receptive to suggestions Avoid conflicts

Low

Rational

Source: Rowe McGrath Modules in Decision Making, 1984

Way of Thinking

Intuitive

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HOW TO IMPROVE YOUR DECISION MAKING

1. 2. 3. 4. 5. 6. 7. ANALYSE THE SITUATION SHOW FLEXIILITY TO INCREASE ACCEPTABILITY BEWARE OF PERSONAL BIASES DONT BE AFRAID TO IMPOSE YOUR INTUITION ON TOP OF RATIONAL ANALYSIS ADAPT TO JOB REQUIREMENT APPLY ETHICAL DECISION GUIDES LATERAL THINKING

SECOND thoughts are invariably wiser. ---Euripides (480-405 B.C)

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WHY DECISIONS FAIL

1. VULNERABILITY OF GROUP-THINK 2. ESCALATION OF COMMITMENT

3. LEVEL OF MORAL DEVELOPMENT

4. CONCEPTUAL BLOCK
PEOPLE who stay in the middle of the road get run over. --- Aneurin Bevan (1897-1960)

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GUIDE LINES FOR DECISION MAKING

The responsibility is always mine but the decision lies with who ever is on the spot.
1. MARSHAL THE FACTS

2. 3. 4. 5. 6. 7. 8.

CONSULT YOUR FEELING USE WISE TIMINGS DONT INFER TOO MUCH KEEP THE DECISION FLEXIBLE FOLLOW THROUGH HAVE COURAGE DECISIONS TO SAVE SKIN, BEWARE OF!