Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.

The Collaborative Design Process and Decision Engineering

5,176 views

Published on

Slides from INFORMS Presentation, Nov. 11, 2014

Published in: Business

The Collaborative Design Process and Decision Engineering

  1. 1. The Collaborative Design Process and Decision Engineering INFORMS Presentation November 11, 2014 San Francisco, California Steve Barrager, Ph.D. Publisher Baker Street Publishing steve@bakerstreetpublishing.com
  2. 2. © 2014 Baker Street Publishing, LLC.  All Rights Reserved. Harvard Business Review, November 2013 Did you see this issue of Harvard Business Review?
  3. 3. © 2014 Baker Street Publishing, LLC.  All Rights Reserved. McKinsey recently moderated a discussion, Whatstrategistsneed:Ameetingoftheminds. Let’s rethink these frameworks together with people who use them in their professional practice, and revise the strategy canon. What people in my position want to know is which techniques are scientifically proven, so we can discard the rest. Very few traditional frameworks, even scenario planning, were built for “black swan” events, which many companies now face every ten years or so. One of the toughest strategy challenges is still the creation of options - creating them is the black box of strategy. Framing questions is the other tough challenge, and it’s one of the most important yet under appreciated parts of strategy development. While analysis is very important, developing strategies is ultimately a While analysis is very important, developing strategies is ultimately a While analysis is very important, developing strategies is ultimately a While analysis is very important, developing strategies is ultimately a While analysis is very important, developing strategies is ultimately a people-centric process fueled by conversation. For me one of the most important things is a set of dynamic tools to deal with, or at least understand, uncertainty. You can read about the discussion by clicking here.
  4. 4. © 2014 Baker Street Publishing, LLC.  All Rights Reserved. • Julian Birkinshaw, London Business School • Michael Birshan, McKinsey London • Laurence Capron, INSEAD • Pankaj Gharnawat, IESE • Fred Gluck, McKinsey • Robert Grant, Bocconi School of Management • MIchael G. Jocobides, London Business School • Conor Kehoe, McKinsey London The participants were the following: • Sudeep Maltra, Centrica • Matt McEvoy, Burberry • Mark Reckitt, Smiths Group • Dan Simpson, Clorox • Sven Smit, McKinsey Amsterdam • PatrickViguerie, McKinsey Atlanta • Mark Wilson, Unilever Were you invited?
  5. 5. © 2014 Baker Street Publishing, LLC.  All Rights Reserved. Neither was I. This is what I would say if McKinsey invited me.
  6. 6. © 2014 Baker Street Publishing, LLC.  All Rights Reserved. Decision making is important because it is the bridge between thought and action. Decision Making The world of action The world of thought Source: Ron HowardThis is aVenn diagram.
  7. 7. © 2014 Baker Street Publishing, LLC.  All Rights Reserved. Every decision has a basis. Frame Action Values Information Alternatives What we want. What we know. What we can do. Source: Ron Howard Action
  8. 8. © 2014 Baker Street Publishing, LLC.  All Rights Reserved. good outcome ≠ good decision
  9. 9. © 2014 Baker Street Publishing, LLC.  All Rights Reserved. There is a difference between normative and descriptive decision making. Normative is what we should or should not do. Descriptive is what we actually do.
  10. 10. © 2014 Baker Street Publishing, LLC.  All Rights Reserved. There is a difference between normative and descriptive decision making. We should not text while driving. Many people text while driving.
  11. 11. © 2014 Baker Street Publishing, LLC.  All Rights Reserved. What is a good decision? A good decision is one that is logically consistent with what we can do, what we want, and what we know. A good decision is an informed choice that is based on valid information and internal commitment.
  12. 12. © 2014 Baker Street Publishing, LLC.  All Rights Reserved. Success in any enterprise consists of doing three things well. “Decision making is only one of the tasks of an executive. It usually takes but a small fraction of his time. But to make decisions is the specific executive task.” 
 Peter Drucker, The Effective Manager, 1966 Strategic Decision Making Leadership Operational Management (Execution)
  13. 13. © 2014 Baker Street Publishing, LLC.  All Rights Reserved. Expansion into new products, services or geographies Investment in existing products, services or geographies Building new infrastructure Mergers and acquisitions Maintenance of existing infrastructure Organizational change for other reasons 21 5 11 12 15 34 Two thirds of strategic decisions deal with products, services, geographies, or These are the goals of strategic decision making based on a McKinsey Consulting survey of 2,327 executives from the full range of industries, regions and functions. (In percentage of total decisions.)
  14. 14. © 2014 Baker Street Publishing, LLC.  All Rights Reserved. Act Experts/Scientists Decision Makers Stakeholders Action Strategic decisions usually involve a conversation among three kinds of people.
  15. 15. © 2014 Baker Street Publishing, LLC.  All Rights Reserved. Now things get complicated. Act Action A Stakeholders have different frames, alternatives, information, and values. Frame Information Alternativ We want value-free information from experts and scientists. We want decision makers to make informed choices that are based on valid information and internal commitment.
  16. 16. © 2014 Baker Street Publishing, LLC.  All Rights Reserved. Good strategic decision making requires profound knowledge of four things. Mutual learningFraming Tools Observable “data” and experience! Design
  17. 17. © 2014 Baker Street Publishing, LLC.  All Rights Reserved. Inappropriate framing is the root cause of most bad decisions. Find x. 4 cm 3cm x Here it is! Too often we get the right answer to the wrong question.
  18. 18. © 2014 Baker Street Publishing, LLC.  All Rights Reserved. Framingis largely about answering questions. Frame busting questions What would you do if you knew you could not fail? What would you do if you had unlimited resources? Or, no resources? How did the scene in the crystal bal happen? (“back casting”)
  19. 19. © 2014 Baker Street Publishing, LLC.  All Rights Reserved. Framingis largely about answering questions. Questions about metaphors Is business like war? Is business like dancing?
  20. 20. © 2014 Baker Street Publishing, LLC.  All Rights Reserved. Framingis largely about answering questions. Rhetorical questions Is it life insurance or death insurance?
  21. 21. © 2014 Baker Street Publishing, LLC.  All Rights Reserved. Framingis largely about answering questions. Project management questions What are we going to do? Why are we doing this? How will we know if we are successful? How can we fail?
  22. 22. © 2014 Baker Street Publishing, LLC.  All Rights Reserved. Framingis largely about answering questions. Context questions Do we have the right people involved? Have we set the boundaries too narrowly? What systems are we considering? What assumptions are we making about reality? Are we using the appropriate values?
  23. 23. Technology alone is not enough. Mutual Learning
  24. 24. Axioms and logic Norms for how we should think and behave There are norms in both “technology” and “liberal arts.” This normative stuff is insanely great!!!!
  25. 25. © 2014 Baker Street Publishing, LLC.  All Rights Reserved. This is how we say we should think and behave in decision making situations. Your Purpose •Informed choice •Valid Information •Internal commitment Acting •State thinking behind own view •Inquire into other’s views •Make dilemmas discussible •Express and reflect on emotion •Design ways to test merits of differing views Results •Increased understanding •More informed decisions •High commitment to action •Mutual learning •Better working relationships Framing •How you see yourself -What I see is one perspective -I may be missing something •How you see others -Acting sensibly in own mind -Caught in a dilemma Source: Action Design. Adapted from Chris Argyris & Donald Schön This Mutual Learning Model is normative.
  26. 26. © 2014 Baker Street Publishing, LLC.  All Rights Reserved. We think and act much differently than we say we should. We practice a Unilateral Control model. Action repertoire • Assert own view • Take own reasoning for granted • Minimize inquiry into others’ views • Ask leading questions • Promote face-saving Assumptions • I am acting sensibly. • Those who differ are wrong. • Mistakes are crimes or sins. Aims • Unilateral control • Win, don’t lose • Be rational • Avoid upset (Adapted from Argyris & Schön, Theory in Practice, 1974) Results •Limited understanding •Poor Decisions •Low commitment •Each sees other as problem •Limited learning
  27. 27. © 2014 Baker Street Publishing, LLC.  All Rights Reserved. A decision coach can help teams move toward the Mutual Learning Model; where they say they want to be. Can we make dilemmas discussable? Action Repertoire Assumptions Aims Joe, our team should think and act this way. What questions do you have? Acting Results Framing Your Purpose
  28. 28. © 2014 Baker Street Publishing, LLC.  All Rights Reserved. We have tools for facilitating mutual learning. Balancing Advocacy and Inquiry The Ladder of Inference Observable “data” and experience!
  29. 29. © 2014 Baker Street Publishing, LLC.  All Rights Reserved. Observable “data” and experience! Actions based on beliefs Beliefs about the world Conclusions Assumptions based on affixed meanings Affixed Meaning (cultural and personal) Selected data 
 and experience Adapted from Action Science, Chris Argyris et al, 1985 We tend to get stuck because we begin discussions high on the ladder. We get stuck when we work at the level of beliefs. We get unstuck as we move toward this level.
  30. 30. © 2014 Baker Street Publishing, LLC.  All Rights Reserved. Observable “data” and experience! Actions based on beliefs Beliefs about the world Conclusions Assumptions based on affixed meanings Affixed Meaning (cultural and personal) Selected data 
 and experience Adapted from Action Science, Chris Argyris et al, 1985 Technology and liberal arts come together on the ladder. Science Structural Models Facilitation
  31. 31. © 2014 Baker Street Publishing, LLC.  All Rights Reserved. Strategy Competition Market Share Comfort and Convenience Styling Unit Costs Investment High Sport Market Size Performance Quality Warranty Costs Pricing Strategy Net Present Value Decision and Framing hierarchies --- Which decisions 
 are we working on? How do they fit with other decisions? What are the givens. Strategy tables --- How do alternative strategies differ? Do they cover the range of possibilities? Decision Diagrams --- What issues are relevant to the strategy? How do issues influence each other? Dynamic System Simulation and Optimization Models --- Have we captured the complexities and dynamics logically? Sensitivity Analysis --- What are the important uncertainties? Where should we focus our attention? Probability assessment techniques --- How do we express what we don’t know? How do we deal with cognitive biases? Bayesian updating of information --- How do probabilities change as we learn more? What is the value of better information? Policy Strategy Tactics A B C 1 2 3 4 5 We routinely use many decision making tools.
  32. 32. © 2014 Baker Street Publishing, LLC.  All Rights Reserved. Forward-looking tools are especially valuable because strategic decisions are about the Past Future Scenarios Structural Models Expert Assessments Statistical Models K RC V K Data You are here.
  33. 33. © 2014 Baker Street Publishing, LLC.  All Rights Reserved. There are many notions of what design is. For example: From Resilience by Design
  34. 34. © 2014 Baker Street Publishing, LLC.  All Rights Reserved. Generate Alternatives Define Problem Analyze Synthesize The Design Process Museum of Science and Industry, Chicago, circa1963 Designinvolves two ways of thinking in engineering: analysisand synthesis.
  35. 35. © 2014 Baker Street Publishing, LLC.  All Rights Reserved. Design is the blending of analysis and synthesis. Steve Jobs called synthesis,“Connecting the dots.” Analysis Synthesis
  36. 36. © 2014 Baker Street Publishing, LLC.  All Rights Reserved. W. Edwards Deming “If you can’t describe what you are doing as a process, then you don’t know what you are doing.” Process is how we put it all together.
  37. 37. © 2014 Baker Street Publishing, LLC.  All Rights Reserved. We can always design a “hybrid” that is better than any of the “test” strategies. Often the hybrid is much better. Test Strategy A Test Strategy C Hybrid Strategy Test Strategy B We have developed a powerful process for designing strategies.
  38. 38. © 2014 Baker Street Publishing, LLC.  All Rights Reserved. Stakeholders and ExpertsFraming Alternative Generation Analysis Synthesis Act Experts Stakeholders Decision Makers The Collaborative Design Process combines advocacy and inquiry; analysis and synthesis.
  39. 39. © 2014 Baker Street Publishing, LLC.  All Rights Reserved. Knowledge Management and Training Facilitation Project
 ManagementToolsProcess The decision coaching profession is emerging to support this process.
  40. 40. © 2014 Baker Street Publishing, LLC.  All Rights Reserved. The Collaborative Design process brings together the important ways of thinking about strategic decisions. Decision Theory Probability Theory Systems Analysis Framing Design Mutual Learning
  41. 41. © 2014 Baker Street Publishing, LLC.  All Rights Reserved. Thank you Steve Barrager, Ph.D. Decision Engineer
  42. 42. © 2014 Baker Street Publishing, LLC.  All Rights Reserved. For additional information the following slide decks are available from Baker Street Publishing. Coach’s Guide to the Collaborative Design Process Coach’s Guide to Framing Coach’s Guide to the Decision Analysis Process Follow this link to download a copy of these slides.

×