Baxter Decision Making

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This presentation was made to the management for Baxter Corporation for their yearly international meeting.

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Baxter Decision Making

  1. 1. Decision MakingToo important to leave to Luck Jim Marteney jimmarteney@gmail.com & Associates
  2. 2. Population of TurkeyGreater or Less Than 35,000,000
  3. 3. Populationof Turkey78,785,548
  4. 4. Mental Trap Unconscious mental routine that leads us to make poor decisions
  5. 5. Anchoring TrapInitial impressions,estimates, or dataanchor subsequentthoughts and judgments. Mind gives disproportionate weight to the first information it receives.
  6. 6. Status Quo TrapSins of commision punishedmore than sins of omissionWe instinctively stay withwhat seems familiar.More alternatives, stronger status quoWe look for decisions that involvethe least changePeople want to avoid, “rocking the boat”
  7. 7. Justify PastActions Trap more invested in the past, more difficult to change Don’t cultivate a fear of failure culture
  8. 8. Framing Trap The way a problem is worded or “framed” can profoundly influence the choices one makes
  9. 9. Framing Trap People are: risk averse when a problem is posed in terms of gains risk seeking when a problem is posed in terms of avoiding losses
  10. 10. Framing Trap Which would you choose? A sure gain of $3,000 80% chance of winning $4,000 and a 20% chance of winning nothing
  11. 11. Framing Trap Which would you choose? A sure loss of $3,000 80% chance of losing $4,000 and a 20% chance of losing nothing
  12. 12. Framing Trap Which production schedule would you choose after hearing that if you continue as you are, all 6,000 units will be lost?
  13. 13. Framing Trap Plan A sure production of 2,000 units Plan B a one-third chance that 6,000 units can be produced, two-thirds that no units can be produced.
  14. 14. Framing Trap Plan A sure production loss of 4,000 units Plan B a one-third chance that 6,000 units can be produced
  15. 15. Framing Trap “Bird in the hand, worth two in the bush.”
  16. 16. Critical Thinking Involves a persistent effort to examine any belief or supposed form of knowledge in the light of the evidence that supports it.
  17. 17. Critical Thinking Gives reasoned consideration to evidence, to contexts, to conceptualizations, to methods, and to criteria.
  18. 18. Critical Thinking Reaches factual or judgmental conclusions based on sound inferences drawn from unambiguous statements of knowledge and belief.
  19. 19. Ten Decision Challenges1. Plunging In2. Frame Blindness3. Lack of Frame Control4. Overconfidence in Your Judgment5. Shortsighted Shortcuts
  20. 20. Ten Decision Challenges 6. Shooting From the Hip 7. Group Failure 8. Fooling Yourself About Feedback 9. Not Keeping Track 10. Failure to Audit Your Decision Process
  21. 21. DanielKahneman
  22. 22. AmosTversky
  23. 23. Try Their Test You are at a Would you go downstore in one end to the other end ofof the mall about the mall to to purchase a purchase the same calculator for calculator for $25 $20
  24. 24. Try Their Test You are at a Would you go downstore in one end to the other end ofof the mall about the mall to to purchase a purchase the same computer for computer for $2000 $1995
  25. 25. Lateral Thinking Edward Debono Story of evil money lender, debtor and his beautiful daughter
  26. 26. Lateral Thinking Engine Intelligence Fuel Knowledge Tuned Thinking Smart = the integration of all three
  27. 27. The Intelligence Trap When one is so intelligent He can justify any quick decision
  28. 28. Decision Making Skills  Identify the Problem  Ask the Key Questions  Develop Alternatives  Build a Consensus  Lead a Supportive Group
  29. 29. Identify the Problem“A problem well statedis a problem halfsolved.” Charles Kettering
  30. 30. Identify the Problem“If I had only one hour to save the world I would spend fifty-five minutes defining theproblem and only five minutes finding the solution.” Albert Einstein
  31. 31. Identify the ProblemDifference Between Cause of a Problem Effect of a Problem
  32. 32. Identify the ProblemFishbone Analysis Dr. Kaoru Ishikawa
  33. 33. Identify the ProblemFishbone Analysis
  34. 34. Asking the Right Questions Is there a Problem? How Significant is the Problem? Structural or Attitudinal? Is there a Solution? Will the Solution Solve the Problem? What are the negative effects? Negative aspects outweigh the benefits?
  35. 35. Asking the Key Questions Failed to ask Key Question Did Japanese households have conventional western ovens?
  36. 36. Develop Alternatives Two important steps Ideation Judgment
  37. 37. Develop AlternativesBrainstorming Goal is Quantity No Criticism Build on Ideas
  38. 38. Developing Alternatives“If you only have ahammer, you tend tosee every problem as anail.” Abraham Maslow
  39. 39. Analyze Alternatives Appraise Strengths Appraise Weaknesses
  40. 40. Build a ConsensusWhere all Group Members at least partially agree are committed to the decision
  41. 41. Build a Consensus Avoid Arguing for Just your Opinion Avoid Win/Lose Situations Seek Differences of Opinion Use Group Pronouns Orient Towards Group Goal
  42. 42. Leading a Supportive GroupEvery group has aunique personality Syntality
  43. 43. Leading a Supportive GroupGroup strength fromeffective merging ofparticipantsindividual energy Synergy
  44. 44. Leading a Supportive GroupTwo Challenges Managing Group Tension GroupthinkAbilene Paradox
  45. 45. GroupthinkThe Mismanagement of Disagreement Korean War Stalemate Escalation of Vietnam War Defense of Pearl Harbor Irving Janis Bay of Pigs Blunder
  46. 46. Groupthink “The psychological drive for consensus at any cost that suppresses dissent and appraisal of alternatives in cohesive decision- making groups” Irving Janis
  47. 47. Groupthink “I cannot imagine any condition which would cause a ship to founder” Edward J. Smith, Captain of the Titanic
  48. 48. Groupthink
  49. 49. Groupthink Challenger Shuttle
  50. 50. Groupthink According to a scathing report released by the Senate Intelligence Committee, the United States went to war with Iraq on the basis of flawed intelligence assessments. The CIA analysts suffered a case of Groupthink that rendered them incapable of considering that Iraq might have dismantled its weapons programs. Senate Intelligence Committee July 10 2004
  51. 51. Groupthink Members avoid being too harsh in their judgments of their leader’s or their colleagues’ ideas. They adopt a soft line of criticism, even in their own thinking.
  52. 52. Groupthink At their meetings, all the members are amiable and seek complete concurrence on every important issue, with no bickering or conflict to spoil the cozy, “we- feeling” atmosphere. ----Psychology Today
  53. 53. Groupthink Symptoms  Pressure for Conformity  Self-Censorship  Illusion of Unanimity Mindguards
  54. 54. GroupthinkNegative Outcomes  Examine Few Alternatives  Not being critical of each other’s ideas  Not examining early alternatives  Not seeking expert opinion  Gathering Information Selectively  Not having contingency plans
  55. 55. Groupthink Avoiding  Refrain from stating preference  Encourage member’s objections  Assign a Devil’s Advocate  Seek expert input  Call a “Second Chance Meeting”  Split into Sub-groups
  56. 56. Groupthink The Key: Someone with the courage to disagree.
  57. 57. Abilene ParadoxThe Mismanagement of Agreement Occurs when a group takes action contrary to the desires of the members and thus, defeats the purpose of the group.
  58. 58. Abilene Paradox “Taking the trip to Abilene” Jerry Harvey
  59. 59. Group ClimateTwo Basic Group Climates  Supportive  Defensive
  60. 60. Implement AlternativeThere will always be resistance
  61. 61. Implement AlternativeChange has considerableimpact on the human mind. To the fearful, it is threatening because it means things may get worse. To the hopeful, it is encouraging because things may get better. To the confident, it is inspiring because the challenge exists to make things better.
  62. 62. Implement Alternative Obviously then, ones character and frame of mind determine how one relates to change.
  63. 63. “When you assemble a number of (people) to have advantage of their joint wisdom, you assemble with those (people), all theirPrejudices, their passions, their errors ofopinion, their local interest, and theirselfish views.From such an assembly can a perfectproduction be expected?” Ben Franklin Constitutional Convention September 15, 1787
  64. 64. For more information, insights, or questions, contact: jimmarteney@gmail.com
  65. 65. Thank you, now go make some quality decisions.

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