Tbl hc5

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Tbl hc5

  1. 1. Rotterdam, 6 september 2010 the Bottom line vrijdag 29 oktober 2010
  2. 2. Making decisions vrijdag 29 oktober 2010
  3. 3. Impact & Effort Consider you are selling an alcohol-free beer, that gets ridiculed by the country’s leading stand-up comedian. as a result sales are plummeting think of some options and write five of your best on post-it notes. vrijdag 29 oktober 2010
  4. 4. vrijdag 29 oktober 2010
  5. 5. What was the problem? vrijdag 29 oktober 2010
  6. 6. Making decisions “Decision making can be regarded as the mental processes (cognitive process) resulting in the selection of a course of action among several alternatives.” - wikipedia the science of decision making: CAPM Analytical network process decision trees etc... vrijdag 29 oktober 2010
  7. 7. Some vocabulary Utility= expected outcome (“attractiveness”) of a decision Risk= the probable distribution of outcomes is known Uncertainty= the nature of the outcomes is unknown Regret= measure of how much better a decision maker could have done had he known the nature of the outcomes vrijdag 29 oktober 2010
  8. 8. Decisions under risk (decision tree) Risk means the probability of the outcomes is know as are the values. (IMHO these instances are actually pretty rare in “normal” businesses. but the purpose is to illustrate decisions and outcomes) vrijdag 29 oktober 2010
  9. 9. vrijdag 29 oktober 2010
  10. 10. Rational decision making process (simplified) “What is the problem that needs solving?” therefore which criteria must my solution adress “how “important” are these criteria? What solutions do I have? How (well) do they adress the problem? What do they cost? vrijdag 29 oktober 2010
  11. 11. issue 1 issue 2 issue 3 score weight 1 0,2 0,6 strategy 1 10 5 4 13,4 strategy 2 5 10 8 11,8 strategy 3 10 5 10 17 Weighted sum method vrijdag 29 oktober 2010
  12. 12. vrijdag 29 oktober 2010
  13. 13. Recap Decision making can be done rationally or on gut feeling Neither has been proven to be “better” In a case competition / presentation setting you might want to use the “rational” method to bolster your case. the rational method does not work well in enviroments of high uncertainty, complexity and/or turbulence vrijdag 29 oktober 2010
  14. 14. Next week: defining the business problem making your case vrijdag 29 oktober 2010

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