Upcoming SlideShare
×

# Decision cheat sheet

1,318 views
1,229 views

Published on

A collection of different decision and complexity tools that can be used to breakdown a complex decision.

0 Likes
Statistics
Notes
• Full Name
Comment goes here.

Are you sure you want to Yes No
• Be the first to comment

• Be the first to like this

Views
Total views
1,318
On SlideShare
0
From Embeds
0
Number of Embeds
0
Actions
Shares
0
32
0
Likes
0
Embeds 0
No embeds

No notes for slide

### Decision cheat sheet

1. 1. How do I select the most important change to make?? Which option is more important?? Is this change worth making?? How much will it cost and what will I get? All goo bes Analysing forces for and against change. - How much resistance can i expect if i go through with this decision? How Can I get more viewpoints on this problem! This problem is not manageable it is too complex!! How do I find out what the cause of the problem really is? How do all these factors and parameters relate to each other?
2. 2. Sometimes the prob big or complex that in our mind - Theref Which option is more tools to help us. important?? Often Problems are Complex a the core of the problem to unde making a hasty misinformed de All options seem good!! Which is the This is often a good starting po best for me?? COMPLEXTITY I need to see outcomes of my Once you have understood and decisions and perform projections!! into manageable parts, analysed options you need to decide whic Decision Making Tools will help y DECISION MAKI I need to see the pros and cons of these options now!! How do all these factors and parameters relate to each other?
3. 3. etimes the problem we face is just so r complex that we cannot handle it all r mind - Therefore we do well in using to help us. ms are Complex and we need to drill down to he problem to understand it fully and to avoid sty misinformed decision. a good starting point! COMPLEXTITY TOOLS ve understood and broken down your problem able parts, analysed and synthezised solution eed to decide which option to choose. ing Tools will help you with this! DECISION MAKING TOOLS
4. 4. Decision Making Tools Help to select the most important change to make. Pareto Analysis Evaluate the relative importance of different options. Paired Comparison How to select between several good options. Grid Analysis Projecting the outcome inorder to help you to decide. Decision Tree Weighting the Pros and Cons of a decision. PMI Assess which forces are against and for a change and how to balance the scales in yo Force Field Lets you look at the decision from all viewpoints Six Thinking Hats Helps you to determine if the change is worth doing! Cost/Benefit Analysis Takes your feelings into the assessment. Instinct and Gut reaction Traffic Light
5. 5. o balance the scales in your favour. action
6. 6. Complexity Managining Tools Extracting as much information as possible from the facts. Appreciation Method Dividing the problem into manageable parts. Drill Down Analysis Identifying likely causes of problems. Cause and Effect Analysis Understanding how factors influence and affect each other. Systems Diagrams Analyzing, Strengths, Weaknesses, Opportunities and Threats in the situation. SWOT Assess possible risks inorder to mitigate the possebility of harm. Risk Analysis
7. 7. ts in the situation. rm.
8. 8. Complexity Managining Tools Appreciation Method Appreciation is a very simple but powerful technique for extracting the maximum amount of information from a simple fact. HOW TO: Starting with a fact, ask the question 'So what?' - i.e. what are the implications of that fact? Keep on asking that question until you have drawn all possible inferences Fact: It rained heavily last night So What? - The ground will be wet So What? - It will turn into mud quickly So What? - If many troops and vehicles pass over the same ground, movement will be progressively slower and more difficult as the ground gets muddier and more difficult. So What? - Where possible, stick to metalled roads. Otherwise expect movement to be much slower than normal.
9. 9. START PAGE DECISION MAKING TOOLS NOTE: The simplicity of this tool belies the effectiveness of it. Make no doubt about it this is a very powerful tool to use. While it would be possible to reach this conclusion without the use of a formal technique, appreciation provides a framework within which you can extract information quickly, effectively and reliably.
10. 10. AKING TOOLS COMPLEXTITY TOOLS
11. 11. Complexity Managining Tools Drill down Drill down is a simple technique for breaking complex problems down into progressively smaller parts. Drilling into a question helps you to get a much deeper understanding of it. The process helps you to recognise and understand the factors that contribute to it. Drill Down prompts you to link in information that you had not initially associated with a problem. It also shows exactly where you need further information HOW TO: 1) start by writing the problem down on the left-hand side of a large sheet of paper. 2) A little to the right of this, write down a list of points relating to the problem. These may be factors contributing to the problem, information relating to it, or questions raised by it. This process of breaking the problem down into its component part is called 'drilling down'. 3) For each of these points, repeat the process. Keep on drilling down into points until you fully understand the factors contributing to the problem. If you cannot break them down using the knowledge you have, then carry out whatever research is necessary to understand the point. See the example to the right. The problem is how to improve the waterquality of the beaches of the city.
12. 12. START PAGE DECISION MAKING TOOLS A well known technique that has been used successfully a long time. In latin it is called "Divide et Impere" - Divide and rule.
13. 13. AKING TOOLS COMPLEXTITY TOOLS me. In latin it
14. 14. Complexity Managining Tools systems diagrams System diagrams are powerful tools that help you to understand how complex systems work. Systems analysed may be anything from businesses, through biological population models, to the impact of social policy, etc. System diagrams are particularly helpful in showing you how a change in one factor may impact elsewhere. They are excellent tools for flushing out the long term impacts of a change. Importantly, a good system diagram will show how changing a factor may feed back to affect itself! Drawing a system diagram is a good way of starting to build a computer model. The technique helps you to lay out the structure of the system to be modelled. It shows which factors and relationships are important, and helps you to start quantifying the linkages between factors Syntax and Semantics 1) Relationships At the heart of the use of system diagrams is the idea of linking factors to show a relationship between them. The Relationship is modelled by an arrow which points in the direction of the relationship. The Relationship cannot go against the direction of the arrow. ie. in figure 1 we cannot say that if Customer Satiesfaction increases that so will Quality of the product. 1.1) Same Way relationships A company believes that raising quality of their product will increase customer satisfaction. This is modelled as a Same Way Relationship in figure 1. The S above the arrow denotes that it is a Same Way Relationship. 1.2) Opposite Way Relationship Furthermore the company belives that raising the price of the product will lower customer satiesfaction. This is modelled as a
15. 15. so will Quality of the product. 1.1) Same Way relationships A company believes that raising quality of their product will increase customer satisfaction. This is modelled as a Same Way Relationship in figure 1. The S above the arrow denotes that it is a Same Way Relationship. 1.2) Opposite Way Relationship Furthermore the company belives that raising the price of the product will lower customer satiesfaction. This is modelled as a Opposite Way Relationship in figure 2. The O above the arrow denotes that it is a Opposite Way Relationship 2) Feedback Loops Feedback is an important concept in the use of system diagrams - in very many cases changing one factor will impact on another factor, which will then affect the first. Feedback can either reduce the impact of the change, or will amplify it. 2.2) Balancing Loops Where feedback reduces the impact of a change, we call this a Balancing Loop. Figure 3 shows an example of a balancing loop, where an under-resourced service company is trying to raise quality. 2.3) Reinforcing Loops Where feedback increases the impact of a change, we call this a Reinforcing Loop. Figure 5 shows an example of a theatre trying to improve its profitability by investing more in productions. 3) External factors So far have we ignored all influences from external factors. In our balancing loop example above we assumed that demand was raised only as customers became more satisfied. In reality demand is just as likely to be affected by the state of the economy. This is shown by modifying the diagram as shown in Figure 7.
16. 16. START PAGE DECISION MAKING TOOLS Systems diagrams allow you to model the way in which complex systems work. They help you to think through the w in which the factors within a system interact and feed back upon themselves. You should now be able to analyse: *how factors are related, and how one factor will change wh another changes *how factors may feed back in either balancing loops or reinforcing loops *how external factors impact on the system *how gaps operate *how delay affects the system *all the complexities of a system
17. 17. AKING TOOLS COMPLEXTITY TOOLS way in which ink through the way t and feed back or will change when cing loops or m
18. 18. Complexity Managing Tools SWOT Strenghts, Weaknesses, Opportunities and Threats. SWOT Analysis is a very effective way of identifying your Strengths and Weaknesses, and of examining the Opportunities and Threats you face. Carrying out an analysis using the SWOT framework will help you to focus your activities into areas where you are strong, and where the greatest opportunities lie. How to use tool: To carry out a SWOT Analysis write down answers to the following questions. Where appropriate, use similar questions: Strengths: What are your advantages? What do you do well? What do other people see as your strengths? Consider this from your own point of view and from the point of view of the people you deal with. Don't be modest - be realistic. If you are having any difficulty with this, try writing down a list of your characteristics. Some of these will hopefully be strengths! Weaknesses:
20. 20. START PAGE DECISION MAKING TOOLS You can perform a SWOT analysis for your competitors or cli ths and can reveal some interesting insights. ou elp you here the ng view of are
21. 21. view of are er your now, w scale s, etc. s s of o
22. 22. AKING TOOLS COMPLEXTITY TOOLS competitors or clients as this
23. 23. Complexity Managining Tools risk analysis How to Evaluate and Manage the Risks You Face Why use the tool? Risk Analysis is a formal framework that helps you to assess the risks that you or your organisation face. A good risk analysis will help you to decide what actions to take to minimise disruptions to your plans. It will also help you to decide whether the strategies you could use to control risk are cost-effective. Here we define risk as 'the perceived extent of possible loss'. Different people will have different views of the impact of a particular risk - what may be a small risk for one person may destroy the livelihood of someone else. One way of putting figures to risk is to calculate a value for it as: risk = probability of event * cost of event Doing this allows you to compare risks objectively. We use this approach formally in decision making with Decision Trees. 1. Identify Threats: The first stage of a risk analysis is to identify threats facing you. Threats may be: Human - from individuals or organisations, illness, death, etc. Procedural - from failures of accountability, internal systems and controls, organisation, etc. Natural - threats from weather, natural disaster, accident, disease, etc. Technical - from advances in technology, technical failure, etc. Political - from changes in tax regimes, public opinion, government policy, foreign influence, etc. Project - risks of cost over-runs, jobs taking too long, of insufficient product or service quality, etc. Financial - from business failure, stock market, interest rates, unemployment, etc.
24. 24. Procedural - from failures of accountability, internal systems and controls, organisation, etc. Natural - threats from weather, natural disaster, accident, disease, etc. Technical - from advances in technology, technical failure, etc. Political - from changes in tax regimes, public opinion, government policy, foreign influence, etc. Project - risks of cost over-runs, jobs taking too long, of insufficient product or service quality, etc. Financial - from business failure, stock market, interest rates, unemployment, etc. Others This analysis of threat is important - it is easy to overlook important threats. One way of trying to capture them all is to use a number of different approaches: Firstly, run through a list such as the one above, to see if any apply Secondly, think through the systems, organisations or structures you operate, and analyse risks to any part of those See if you can see any vulnerabilities within these systems or structures Ask other people, who might have different perspectives. 2. Estimate Risk: Once you have identified the threats you face, the next step is to work out the likelihood of the threat being realised and to assess its impact. One approach to this is to make your best estimate of the probability of the event occurring, and to multiply this by the amount it will cost you to set things right if it happens. This gives you a value for the risk. 3. Managing Risk: Once you have worked out the value of risks you face, you can start to look at ways of managing them. When you are doing this, it is important to choose cost effective approaches - in most cases, there is no point in spending more to eliminating a risk than the cost of the event if it occurs. Often, it may be better to accept the risk than to use excessive resources to eliminate it. Risk may be managed in a number of ways: *By using existing assets: Here existing resources can be used to counter risk. This may involve improvements to existing methods and systems, changes in responsibilities, improvements to accountability and internal controls, etc. *By contingency planning: You may decide to accept a risk, but choose to develop a plan to minimise its effects. A good contingency plan will allow you to take action immediately, with the minimum of project control. *By investing in new resources:
25. 25. *By using existing assets: Here existing resources can be used to counter risk. This may involve improvements to existing methods and systems, changes in responsibilities, improvements to accountability and internal controls, etc. *By contingency planning: You may decide to accept a risk, but choose to develop a plan to minimise its effects. A good contingency plan will allow you to take action immediately, with the minimum of project control. *By investing in new resources: Your risk analysis should give you the basis for deciding whether to bring in additional resources to counter the risk. 4. Reviews: Once you have carried out a risk analysis and management exercise, it may be worth carrying out regular reviews. These might involve formal reviews of the risk analysis, or may involve testing systems and plans appropriately.
26. 26. START PAGE DECISION MAKING TOOLS he risks p you to ns. It se to rticular e s: u. nd ease, ment cient
27. 27. nd ease, ment cient ortant ber of apply es you to work impact. bability l cost the risk. n start is s, there of the an to involve ontrols, n to take
28. 28. involve ontrols, n to take her to xercise, olve ems
29. 29. AKING TOOLS COMPLEXTITY TOOLS
30. 30. Decision Making Tools pareto analysis - 80/20 rule The Pareto principle - the idea that by doing 20% of work you can generate 80% of the advantage of doing the entire job. Pareto analysis is a formal technique for finding the changes that will give the biggest benefits. It is useful where many possible courses of action are competing for your attention To start using the tool: 1) Write out a list of the changes you could make. If you have a long list, group it into related changes. 2) Then score the items or groups. The scoring method you use depends on the sort of problem you are trying to solve. For example, if you are trying to improve profitability, you would score options on the basis of the profit each group might generate. If you are trying to improve customer satisfaction, you might score on the basis of the number of complaints eliminated by each change. DO THIS The first change to tackle is the one that has the highest score. This one will give you the biggest benefit if you solve it. NOTE: The options with the lowest scores will probably not even be worth bothering with - solving these problems may cost you more than the solutions are worth
31. 31. cost you more than the solutions are worth
32. 32. START PAGE DECISION MAKING TOOLS Pareto Analysis shows the lack of symmetry that almost always appears between work put in and results achieved. This can be seen in area after area of competitive activity. The figures 80 and 20 are illustrative - for example, 13% of work could generate 92% of returns. Vilfredo Pareto(1848-1923) was an Italian economist who noted that approximately 80% of wealth was owned by only 20% of the population. This was true in almost all the societies he studied.
33. 33. COMPLEXTITY TOOLS ry that almost results achieved. mpetitive activity. example, 13% of economist who as owned by only most all the
34. 34. Complexity Managining Tools Cause and effect diagram Cause & Effect Diagrams help you to think through causes of a problem thoroughly. Their major benefit is that they push you to consider all possible causes of the problem, rather than just the ones that are most obvious. The approach combines brainstorming with use of a type of Concept Map. This type of diagram is also called Ishikawa or fish diagram. 1) Identify the problem: Write down the exact problem you face in detail. Where appropriate identify who is involved, what the problem is, and when and where it occurs. Write the problem in a box on the left hand side of a large sheet of paper. Draw a line across the paper horizontally from the box. This gives you space to develop ideas. 2) Work out the major factors involved: Next identify the factors that may contribute to the problem. Draw lines off the spine for each factor, and label it. These may be people involved with the problem, systems, equipment, materials, external forces, etc. Try to draw out as many possible factors as possible. If you are trying to solve the problem as part of a group, then this may be a good time for some brainstorming! Using the 'Fish bone' analogy, the factors you find can be though of as the bones of the fish. 3) Identify possible causes: For each of the factors you considered in stage ii, brainstorm possible causes of the problem that may be related to the factor. Show these as smaller lines coming off the 'bones' of the fish. Where a cause is large or complex, then it may be best to break the it down into sub-causes. Show these as lines coming off each cause line.
35. 35. though of as the bones of the fish. 3) Identify possible causes: For each of the factors you considered in stage ii, brainstorm possible causes of the problem that may be related to the factor. Show these as smaller lines coming off the 'bones' of the fish. Where a cause is large or complex, then it may be best to break the it down into sub-causes. Show these as lines coming off each cause line. 4) Analyse your diagram: By this stage you should have a diagram showing all the possible causes of your problem. Depending on the complexity and importance of the problem, you can now investigate the most likely causes further. This may involve setting up investigations, carrying out surveys, etc. These will be designed to test whether your assessments are correct.
36. 36. START PAGE DECISION MAKING TOOLS TIP: A good starting point can be the following 5 m factors: manpower, machines, methods, mat and environment. Depending on your situatio remove or add major factors to fit into your organisation. Tools No training on the tools Methods Wrong tools for the job Not enough environments to test in Unit test was removed from the process Unclear Requirements Testing takes Lacking right skillset Understaffed from More bugs than beginning anticipated Added too much staff in mid project which delayed everything Quality Staff
37. 37. Lacking right skillset Understaffed from More bugs than beginning anticipated Added too much staff in mid project which delayed everything Quality Staff
38. 38. AKING TOOLS COMPLEXTITY TOOLS e the following 5 major es, methods, materials g on your situation s to fit into your ools for the job ments to test in Testing of the system takes too long time taffed from ginning o much staff in mid h delayed everything
39. 39. taffed from ginning o much staff in mid h delayed everything
40. 40. Decision Making Tools paired comparison analysis Paired Comparison Analysis helps you to work out the importance of a number of options relative to each other. It is particularly useful where you do not have objective data to base this on. This makes it easy to choose the most important problem to solve, or select the solution that will give you the greatest advantage. Paired Comparison Analysis helps you to set priorities where there are conflicting demands on your resources. How to use the tool: Follow these steps to use the technique: 1) List the options you will compare. Assign a letter to each option. 2) Set up a table with these options as row and column headings. 3) Block out cells on the table where you will be comparing an option with itself - there will never be a difference in these cells! These will normally be on the diagonal running from the top left to the bottom right. 4) Also block out cells on the table where you will be duplicating a comparison. Normally these will be the cells below the diagonal. 5) Within the remaining cells compare the option in the row with the one in the column. For each cell, decide which of the two options is more important. Write down the letter of the more important option in the cell, and score the difference in importance from 0 (no difference) to 3 (major difference). 6)Finally, consolidate the results by adding up the total of all the values for each of the options. You may want to convert these values into a percentage of the total score.
41. 41. values into a percentage of the total score.
42. 42. START PAGE DECISION MAKING TOOLS GOOD FOR: r. It is to base * weighing up the relative importance of different cou action. It is useful where priorities are not clear, or are competing in importance. m to st * to show the difference in importance between facto t Fast Cheap Safe Easy 2 Maintain a b c d Fast a B C D Cheap b B B Safe c C D ch E2M d D B SCORE A=0 B=4 <= Winner ng an C=2 se cells! D=3 top left plicating ow with e two more ). f all the these
43. 43. DECISION MAKING TOOLS COMPLEXTITY TOOLS ce of different courses of re not clear, or are ce between factors.
44. 44. Decision Making Tools Grid analysis (well almost) 1) Starting point: Write down all pertinent data for both options (in this case two persons have been interviewed and a job offer will be extended to one of them) Person A Person B Person A Analytical 8years of work experience Analytical Experienced tester Branch knowledge Experienced tester Management experience Excellent Technical skills Management experience Good social skills Knows websphere Good social skills Can start now Good social skills Can start now Experience from multicult. Experience from multicult. Workplaces knows iso9001 Workplaces Knows ISO9001 Can start now Knows ISO9001 2) Find out which options negate each other and strike them Knows spanish out Person A Person B Person A Analytical 8years of work experience Analytical Experienced tester Branch knowledge 4) Congratulations your decision Experienced tester Management experience Excellent Technical skills has been simplified Management experience Knows websphere Experience from multicult. Experience from multicult. Workplaces Knows spanish Workplaces Good social skills Good social skills Good social skills Knows ISO9001 knows iso9001 Knows ISO9001 Can start now Can start now Can start now
45. 45. START PAGE DECISION MAKING TOOLS Person B 8years of work experience Branch knowledge Excellent Technical skills Knows websphere Good social skills knows iso9001 Can start now Knows spanish 3) See if there are any different but equally important factors that negate each other Person B 8years of work experience Branch knowledge Excellent Technical skills Knows websphere Knows spanish Good social skills knows iso9001 Can start now
46. 46. ECISION MAKING TOOLS COMPLEXTITY TOOLS
47. 47. Decision Making Tools Decision tree Decision Trees are excellent tools for helping you to choose between several courses of action. They provide a highly effective structure within which you can lay out options and investigate the possible outcomes of choosing those options. They also help you to form a balanced picture of the risks and rewards associated with each possible course of action CREATE YOUR DECISION TREE 1) Start a Decision Tree with a decision that you need to make. Draw a small square to represent this towards the left of a large piece of paper. 2) From this box draw out lines towards the right for each possible solution, and write that solution along the line. Keep the lines apart as far as possible so that you can expand your thoughts. 3) At the end of each line, consider the results. If the result of taking that decision is uncertain, draw a small circle. If the result is another decision that you need to make, draw another square. Squares represent decisions, and circles represent uncertain outcomes. 4) Write the decision or factor above the square or circle. If you have completed the solution at the end of the line, just leave it blank. 5) Starting from the new decision squares on your diagram, draw out lines representing the options that you could select. 6) From the circles draw lines representing possible outcomes. Again make a brief note on the line saying what it means. Keep on doing this until you have drawn out as many of the possible outcomes and decisions as you can see leading on from the original decisions
48. 48. REVIEW AND EVALUATE YOUR DECISION TREE Once you have done this, review your tree diagram. Challenge each square and circle to see if there are any solutions or outcomes you have not considered. If there are, draw them in. If necessary, redraft your tree if parts of it are too congested or untidy. You should now have a good understanding of the range of possible outcomes of your decisions. Now you are ready to evaluate the decision tree. This is where you can work out which option has the greatest worth to you. Start by assigning a cash value or score to each possible outcome - how much you think it would be worth to you if that outcome came about. Next look at each circle (representing an uncertainty point) and estimate the probability of each outcome. If you use percentages, the total must come to 100% at each circle. If you use fractions, these must add up to 1. If you have data on past events you may be able to make rigorous estimates of the probabilities. Otherwise write down your best guess. CALCULATE THE VALUE OF NODES Where you are calculating the value of uncertain outcomes (circles on the diagram), do this by multiplying the value of the outcomes by their probability. The total for that node of the tree is the total of these values.
49. 49. FINALIZE THE TREE 1) When you are evaluating a decision node, write down the cost of each option along each decision line. 2) Then subtract the cost from the outcome value that you have already calculated. This will give you a value that represents the benefit of that decision. Note that amounts already spent do not count for this analysis - these are 'sunk costs' and (despite emotional counter-arguments) should not be factored into the decision. When you have calculated these decision benefits, choose the option that has the largest benefit, and take that as the decision made. This is the value of that decision node.
50. 50. START PAGE DECISION MAKING TOO NOTE: It is seldom you need to go further than 2-3 decision tree. If you start to get more levels tree to see if you are bogged down in detai big picture.
51. 51. DECISION MAKING TOOLS COMPLEXTITY TOOLS to go further than 2-3 levels down in the tart to get more levels take a look at your bogged down in details and loosing the
52. 52. Decision Making Tools plus/minus/implications PMI stands for 'Plus/Minus/Implications'. It is a valuable improvement to the 'weighing pros and cons' technique used for centuries. PMI is an important decision-making tool: In comparison to Pareto, Paired comparison, Grid Analysis and Decision Tree which are focused on selecting a course of action from a range of options. PMI checks what implications the decision will have. Before you move straight to action on this course of action, it is important to check that it is going to improve the situation (it may actually be best to do nothing!) To use PMI: 1) draw up a table headed up 'Plus', 'Minus', and 'Implications'. 2) In the column underneath 'Plus', write down all the positive results of taking the action. 3) Underneath 'Minus' write down all the negative effects. 4) In the 'Implications' column write down the implications and possible outcomes of taking the action, whether positive or negative OPTIONAL - If the decision is still not obvious. 5) score the table to show the importance of individual items. The total score should show whether it is worth implementing the decision.
53. 53. total score should show whether it is worth implementing the decision.
54. 54. START PAGE DECISION MAKING TOOLS Move to the big city or to stay in the hometown?
55. 55. AKING TOOLS COMPLEXTITY TOOLS
56. 56. Decision Making Tools force field analysis Force Field Analysis is a useful technique for looking at all the forces for and against a decision. In effect, it is a specialized method of weighing pros and cons. By carrying out the analysis you can plan to strengthen the forces supporting a decision, and reduce the impact of opposition to it CREATE THE FORCE FIELD DIAGRAM: 1) List all forces for change in one column to the left 2) List all forces against change in another column to the right. 3) Assign a score to each force, from 1 (weak) to 5 (strong). 4) Draw a diagram, write the plan or decision in the main box and then the forces for and against change. Show the size of each force as a number next to it.
57. 57. START PAGE DECISION MAKING TOOLS Where you have already decided to carry out a projec Analysis can help you to work out how to improve its p success. Here you have two choices: 1) To reduce the strength of the forces opposing a pro 2) To increase the forces pushing a project. Often the most elegant solution is the first: just trying through may cause its own problems. People can be u change is forced on them.
58. 58. AKING TOOLS COMPLEXTITY TOOLS carry out a project, Force Field w to improve its probability of : es opposing a project, or project. e first: just trying to force change s. People can be uncooperative if
59. 59. Decision Making Tools six thinking hats 'Six Thinking Hats' is an important and powerful technique. It is used to look at decisions from a number of important perspectives. This forces you to move outside your habitual thinking style, and helps you to get a more rounded view of a situation. Many successful people think from a very rational, positive viewpoint. This is part of the reason that they are successful. Often, though, they may fail to look at a problem from an emotional, intuitive, creative or negative viewpoint. This can mean that they underestimate resistance to plans, fail to make creative leaps and do not make essential contingency plans. Similarly, pessimists may be excessively defensive. Emotional people may fail to look at decisions calmly and rationally. If you look at a problem with the 'Six Thinking Hats' technique, then you will solve it using all approaches. Your decisions and plans will mix ambition, skill in execution, public sensitivity, creativity and good contingency planning. This tool was created by Edward de Bono. The six hats explained *White Hat – Analyzing, data processing,facts, figures, information needs and gaps. Lets drop the agreements and proposals, and look at the data *Red Hat – Feelings, hunches, gut feeling, Does not need to be justified by logic. *Black Hat – Judgement, defensivly, finding out all bad points. The Devil’s Advocate, or why something may not work. Must be logical. *Yellow Hat – Optimistic Viewpoint, benefits. This the logical why something will work and why it will offer benefits. Loking forward to the results. *Green Hat – freewheling creativity, no critisism, all goes. Possibilities, alternatives and new ideas *Blue Hat – Process control, directing the session. It looks not at the
60. 60. Devil’s Advocate, or why something may not work. Must be logical. *Yellow Hat – Optimistic Viewpoint, benefits. This the logical why something will work and why it will offer benefits. Loking forward to the results. *Green Hat – freewheling creativity, no critisism, all goes. Possibilities, alternatives and new ideas *Blue Hat – Process control, directing the session. It looks not at the subject but at the thinking about the subject. Us it at the beginning of the meeting to clarify the following:why we are here, definition of the situation, alternative definitions, what we want to achieve, where we want to end up, 6 hats explantion, plan for the sequence of the hats to be used. Use it at the end of the meeting to indicate: outcome, conclusion, design, solution and next steps. HOW TO USE IN GROUP1: 1) Everyone puts on the Blue Hat in the beginning and agrees on a predetermined sequence of hats to use in the meeting. This is the most useful method unless there is experience in using the 6 hats since otherwise it can be perceived that the person choosing the sequence manipulates the group. HOW TO USE IN GROUP2: 1) Assign one person to wear the Blue hat and to ensure that everyone knows what the hat colors mean. 2) The person wearing the Blue Hat will initiate the meeting by introducing the problem and asking that everyone regard it with a Yellow hat on their head. (any hat color works fine, yellow was just an example) 3) Blue Hat, will ask people to change hat from time to time to ensure that all angles are covered. * Remember everyone changes hats at the same time. HOW TO USE IN GROUP3: (Evolving method) 1) Everyone agrees on which color the meeting is started with. 2) When the hat is completed the next hat is chosen and so forth... * The disadvantage of this method is that it can take time to decide which hat is to be used next.
61. 61. HOW TO USE IN GROUP3: (Evolving method) 1) Everyone agrees on which color the meeting is started with. 2) When the hat is completed the next hat is chosen and so forth... * The disadvantage of this method is that it can take time to decide which hat is to be used next. HOW TO ALONE: 1) Put on any hat you wish and think about the problem let a few minutes pass and change hat color.
62. 62. START PAGE DECISION MAKING TOO que. It is used You can use Six Thinking Hats in meetings ectives. This In meetings it has the benefit of blocking th e, and helps you happen when people with different thinking same problem. sitive viewpoint. Some Rules: en, though, they *There are no bad hats ve, creative or *Everybody has to stay with the current ha mate resistance *There should not be any typecasting. ie. th essential hold a specific color. *Dont allocate too much time per color, it is motional people time than to have people sitting and just w chnique, then nd plans will mix TIP About hat sequences: and good 1) Always use blue hats in the beginning an 2) Red hat can be used immediatly after th are a lot of emotions already present. It sh cases if there are no pre-existing feelings o express his/hers feelings since some peop agree or to steer their thinking in the bosse 3) For assessment situations use the yellow hat. If there are no opportunities then there with black hat thinking. 4) For the green, yellow and black hats it c do some individual thinking during a meetin "lets take two minutes to think about this w , information osals, and look eed to be points. The ust be logical. ogical why ng forward to oes. ooks not at the
63. 63. ust be logical. ogical why ng forward to oes. ooks not at the he beginning , definition of achieve, where uence of the conclusion, agrees on a . nce in using person re that eting by ard it with a low was just time to ed with. nd so forth... me to decide
64. 64. ed with. nd so forth... me to decide let a few
65. 65. DECISION MAKING TOOLS COMPLEXTITY TOOLS king Hats in meetings or on your own. e benefit of blocking the confrontations that with different thinking styles discuss the ats ay with the current hat any typecasting. ie. that specific persons uch time per color, it is better to extend the ople sitting and just waiting. nces: ats in the beginning and the end. ed immediatly after the initial blue hat if there already present. It should be avoided in the pre-existing feelings or if a boss is there to ings since some people can feel the need to ir thinking in the bosses direction. tuations use the yellow hat before the black pportunities then there is no need to continue g. ow and black hats it can be very beneficial to inking during a meeting. The faciliator can say s to think about this with our green hats."
66. 66. Decision Making Tools Cost benefit analysis Evaluating Quantitatively Whether to Follow a Course of Action Cost/Benefit Analysis is a relatively simple and widely used technique for deciding whether to make a change. As its name suggests, to use the technique simply add up the value of the benefits of a course of action, and subtract the costs associated with it. Costs are either one-off, or may be ongoing. Benefits are most often received over time. We build this effect of time into our analysis by calculating a pay-back period. This is the time it takes for the benefits of a change to repay its costs. Many companies look for pay-back over a specified period of time - e.g. three years. In its simple form, cost/benefit analysis is carried out using only financial costs and financial benefits. For example, a simple cost/benefit analysis of a road scheme would measure the cost of building the road, and subtract this from the economic benefit of improving transport links. It would not measure either the cost of environmental damage or the benefit of quicker and easier travel to work. A more sophisticated approach to cost/benefit analysis is to try to put a financial value on these intangible costs and benefits. This can be highly subjective - is, for example, a historic water- meadow worth £25,000, or is it worth £500,000 because if its environmental importance? What is the value of stress-free travel to work in the morning?
67. 67. environmental importance? What is the value of stress-free travel to work in the morning?
68. 68. START PAGE DECISION MAKING TOOLS
69. 69. AKING TOOLS COMPLEXTITY TOOLS
70. 70. Decision Making Tools Traffic Light The Traffic Light is a way of quantifying emotions into the decision process. Clinical research shows that emotions are the brains own way of filtering away bad experiences and decisions and letting the good ones to surface. When you take a decision and act on it your body makes sure that depending on the outcome a emotion is attached to the decision you just made. Therefor should you acknowledge your feelings and weight them into your decision making process. Traffic light is a tool for doing just that. HOW TO: 1) Try to sit down in a environment where you can be in peace, 2) See if you are feeling any negativ emotions related to the decision. 3) If you do try to map them against a specific item in the decision that causes it. This your time to probe and to understand why you feel these negativ emotions. 4) If you find out what causes the emotion and it is indeed relative to the decision, change your decision analysis made earlier accordingly to this new finding.
71. 71. START PAGE DECISION MAKING TOO NOTE: Traffic Light should be used after your have used another method or process to structure your options and implications. You should not give too much weight to your feelings in comparison to your other decision making processes but neither should you ignore or downplay them. peace, o the he ed made
72. 72. DECISION MAKING TOOLS COMPLEXTITY TOOLS your have used ucture your options ight to your feelings in n making processes downplay them.
73. 73. How do I select the most important change to make?? Is this change worth making?? How much will it cost and what will I get? Pareto Analysis Cost/Benefit Analysis Analysing forces for and against change. - Force Field How much resistance DECISON can i expect if i go Analysis Problem through with this decision? 6 Thinking Hats PMI I need more viewpoints on this problem! I need to see the pros and cons of these options now!!
74. 74. I need to see the pros and cons of these options now!!
75. 75. the ?? Which option is more important?? Pareto Analysis Paired Comparison All options seem Analysis good!! Which is the best for me?? ECISON Grid Problem Analysis Decision Tree I need to see outcomes of my decisions and perform PMI projections!! d to see the pros ons of these ns now!!
76. 76. d to see the pros ons of these ns now!!