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

1. Decision
Making
Too important to
leave to Luck
Jim Marteney
jimmarteney@gmail.com
& Associates

2. Population
of Turkey
Greater or Less
Than
35,000,000

3. Population
of Turkey
78,785,548

4. Mental Trap
Unconscious mental routine that
leads us to make poor decisions

5. Anchoring Trap
Initial impressions,
estimates, or data
anchor subsequent
thoughts and judgments.
Mind gives disproportionate
weight to the first
information it receives.

6. Status Quo Trap
Sins of commision punished
more than sins of omission
We instinctively stay with
what seems familiar.
More alternatives, stronger status quo
We look for decisions that involve
the least change
People want to avoid, “rocking the boat”

7. Justify Past
Actions Trap
more invested in the past,
more difficult to change
Don’t cultivate a
fear of failure
culture

8. Framing
Trap
The way a problem is worded or
“framed” can profoundly
influence the choices one makes

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. 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. 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. 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. 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. 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. Framing
Trap
“Bird in the hand,
worth two in the
bush.”

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. Critical Thinking
Gives reasoned
consideration to
evidence, to contexts,
to conceptualizations,
to methods, and to
criteria.

18. Critical Thinking
Reaches factual or
judgmental conclusions
based on sound
inferences drawn from
unambiguous
statements of
knowledge and belief.

19. Ten Decision Challenges
1. Plunging In
2. Frame Blindness
3. Lack of Frame Control
4. Overconfidence in Your Judgment
5. Shortsighted Shortcuts

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. Daniel
Kahneman

22. Amos
Tversky

23. Try Their Test
You are at a Would you go down
store in one end to the other end of
of the mall about the mall to
to purchase a purchase the same
calculator for calculator for
$25 $20

24. Try Their Test
You are at a Would you go down
store in one end to the other end of
of the mall about the mall to
to purchase a purchase the same
computer for computer for
$2000 $1995

25. Lateral Thinking
Edward Debono
Story of evil money
lender, debtor and his
beautiful daughter

26. Lateral Thinking
Engine Intelligence
Fuel Knowledge
Tuned Thinking
Smart = the integration of all three

27. The Intelligence Trap
When one is so
intelligent
He can justify any
quick decision

28. Decision Making Skills
 Identify the Problem
 Ask the Key Questions
 Develop Alternatives
 Build a Consensus
 Lead a Supportive Group

29. Identify the Problem
“A problem well stated
is a problem half
solved.”
Charles Kettering

30. Identify the Problem
“If I had only one hour
to save the world I
would spend fifty-five
minutes defining the
problem and only five
minutes finding the
solution.”
Albert Einstein

31. Identify the Problem
Difference Between
Cause of a Problem
Effect of a Problem

32. Identify the Problem
Fishbone Analysis
Dr. Kaoru Ishikawa

33. Identify the Problem
Fishbone Analysis

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. Asking the Key Questions
Failed to ask
Key Question
Did Japanese
households have
conventional
western ovens?

36. Develop Alternatives
Two important steps
Ideation
Judgment

37. Develop Alternatives
Brainstorming
Goal is Quantity
No Criticism
Build on Ideas

38. Developing Alternatives
“If you only have a
hammer, you tend to
see every problem as a
nail.”
Abraham Maslow

39. Analyze Alternatives
Appraise Strengths
Appraise Weaknesses

40. Build a Consensus
Where all Group Members
at least partially agree
are committed to the decision

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. Leading a Supportive Group
Every group has a
unique personality
Syntality

43. Leading a Supportive Group
Group strength from
effective merging of
participants
individual energy
Synergy

44. Leading a Supportive Group
Two Challenges Managing Group Tension
Groupthink
Abilene Paradox

45. Groupthink
The Mismanagement of Disagreement
Korean War Stalemate
Escalation of Vietnam War
Defense of Pearl Harbor
Irving Janis
Bay of Pigs Blunder

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. Groupthink
“I cannot imagine any
condition which
would cause a ship to
founder”
Edward J. Smith, Captain of
the Titanic

48. Groupthink

49. Groupthink
Challenger
Shuttle

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. 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. 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. Groupthink
Symptoms
 Pressure for
Conformity
 Self-Censorship
 Illusion of
Unanimity
Mindguards

54. Groupthink
Negative 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. 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. Groupthink
The Key:
Someone with
the courage to
disagree.

57. Abilene Paradox
The 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. Abilene Paradox
“Taking the trip to Abilene”
Jerry Harvey

59. Group Climate
Two Basic Group Climates
 Supportive
 Defensive

60. Implement Alternative
There will always be resistance

61. Implement Alternative
Change has considerable
impact 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. Implement Alternative
Obviously then, one's character
and frame of mind determine how
one relates to change.

63. “When you assemble a
number of (people) to
have advantage of their
joint wisdom, you
assemble with those
(people), all their
Prejudices, their passions, their errors of
opinion, their local interest, and their
selfish views.
From such an assembly can a perfect
production be expected?”
Ben Franklin
Constitutional Convention
September 15, 1787

64. For more information, insights,
or questions, contact:
jimmarteney@gmail.com

65. Thank you, now go make
some quality decisions.