2. 2
Lecture plan
Effective decision making
When do decisions need to be made?
Choose the appropriate strategy
The decision making process
Gather the facts
Identify alternatives
Assess the alternatives
Decide
Helpful hints
Decision making behaviour
Decision making approaches
Consensus decision making
When to use which decision making method
How to conduct a consensus decision making session
Further assistance
3. Objectives
At the end of the session you should be able to
Understand the importance of decision making
Approaches to decision making
Identify the common errors while making decisions
3
4. 4
Effective decision making
A major activity of management is the making of
decisions.
Decisions need to be timely. There are times when a
decision has to be made. Even if it turns out not to be
the best decision it can be better than not making a
decision at all.
Decisions often have to be made when there is
insufficient information. Decisions involve taking
risks. Effective decision making involves gathering
what information is known, identifying the
options, assessing the risks and making the best
decision with the information available in a timely
manner.
5. 5
When do decisions need to be made
• Determining the project strategy/approach
• Resolving project issues
• Developing estimates
• Making purchases
• Interviewing and selecting project team members
• Selecting external suppliers
• Handling disagreements and conflict resolution
• Scheduling work and allocating resources to tasks
• Managing meetings
Situations include:
6. 6
Choose the appropriate strategy
High importance
(Risks/Impacts/Costs
are major)
Low importance
(Risks/Impacts/Costs
are minor)
Urgent decision
required
No time for detailed
analysis, so use considered
judgement or consult an
expert.
A quick decision can be
made with minimal
analysis.
No urgency on
making decision
Conduct detailed analysis Defer or delegate decision
When making a decision it is useful to determine what type
of decision it is and the appropriate strategy to follow.
Focus time on important decisions, don’t waste time on
unimportant decisions.
7. 7
The decision making process
1. Gather the facts
2. Identify a number of alternatives
3. Assess the alternatives
4. Decide
Four simple steps:
Where quick decisions need to be made, these steps can
be done mentally “on the fly” or by one person. When
time allows and the decision is important, more people
can be involved and a more thorough decision making
process used.
8. 8
Gather the facts
• Write down a statement of what needs to be decided.
• Is the decision statement clear and precise? If not refine
the statement.
• Is the need for the decision a result of an underlying
problem, which also needs to be addressed?
• Are there assumptions underlying the decision that need
to be clarified and possibly challenged?
• Is the decision part of a bigger decision that needs to be
made, or can this decision be decomposed into smaller
decisions?
Guidelines
9. 9
Identify alternatives
• Identify as many alternatives as possible.
• Use brainstorming if appropriate.
• Do not filter out alternative options at this stage
- assume they can all be made to work.
• When you have generated lots of ideas,
consider each one to see if it is a viable
alternative.
• Shortlist the viable alternatives.
Guidelines
10. 10
Assess the alternatives
• Write down the pros and cons of each alternative.
• Identify the risks associated with each alternative.
• Determine the impact of each alternative on other
areas of the organisation. Consider the big picture.
• Review the alternatives to determine if there is clearly
a preferable choice.
Guidelines
11. 11
Decide
• Select the best alternative from those available.
• Consider your “gut feel”. Instincts can often be right.
• If the best alternative is not obvious draw up a table for the options.
List the attributes that the options are to be assessed on. Assign
points to each (see example below)
• Make the decision and take action.
Guidelines
Attribute
Repair
option
Replace
option
Comments
Cost 2 0
Repair is a much cheaper
option
Warranty 1 2
Full warranty if replace, partial
only if repair
Expected useful
life
1 2
Extended by repair, but not as
long as if new
Risk 1 2
Repair could damage other
components, new is less risky
Functionality 0 1
Replacement has more
features.
Total 5 7 Replace is better option overall.
12. 12
Helpful hints
Do:
– Clearly identify the decision to
be made
– Involve people qualified to help
in the decision making
– Identify the context of the
decision (the bigger picture)
– Identify all alternatives
– Assess each alternative
– Assess the risks
– Consider your “gut feel”
– Make the decision
and stick to it
Don’t:
– Make assumptions
– Procrastinate
– Jump to conclusions
– Make uninformed decisions
– Favour one decision prior to
gathering the facts and
evaluating the alternatives
– Allow only technical people to
make the decisions
– Attempt to make a decision in
isolation of the context
– Let emotion override
objectivity
13. 13
Decision making behaviour
People tend to adopt a particular decision making
approach as a result of factors such as:
• their own personality
• their current mood
• the organisational culture
• the personality of the person/people they are dealing
with
• the nature of the relationship they have with the
people they are dealing with
• time pressure and perceived level of stress
Being aware of these influences can result in
better decision making, by adopting the best
decision making approach for each situation.
14. 14
Decision making approaches
Approaches* to decision making situations:
*Adapted from D Billows, Project Manager’s KnowledgeBase,
2nd edition, 2004, The Hampton Group.
• Withdrawing: holding off making the decision.
• Smoothing: focusing on areas of agreement and
ignoring areas of difference.
• Compromising: trying to come up with a decision that
provides some degree of satisfaction for all parties.
• Confronting/problem solving: working through the
issues.
• Forcing: executing a particular decision knowing
agreement has not been reached.
15. 15
Decision making approaches
Withdrawing:
• Withdraw to gather more information and perspective
• Only a stop gap measure
• Useful in “cooling down” an overheated situation
• Taking time out (“sleep on it”) before final decision
Smoothing:
• Relationship focused rather than solution focused
• Avoids dealing with the issues
• Can be useful in reducing the emotional tension where the
decision is of low importance.
• Does not provide a long-term solution
Skilled project managers and business analysts
select the best approach appropriate to the situation.
16. 16
Decision making approaches
Confronting/problem solving:
• Direct approach
• Identifies alternatives and works through the issues
• Time-consuming
• Most likely method to develop the best solution
Forcing:
• Used when an urgent decision is required or as a last resort
• Necessary for situations when decision making is blocked
• May result in reluctance in execution of decision if not
handled well.
Compromising:
• Bargaining to get an acceptable agreement
• Falls short of the best decision
• Can be useful in resolving negotiation deadlocks
17. 17
Consensus decision making
Consensus decision making is the process of involving
a group of stakeholders in the making of a decision
such that even though some of the participants may
not agree with the decision that is made, they all
accept the decision.
Consensus decision making is more time-consuming
than unilateral decision making, but does have the
added benefit of building commitment to the decision
that is made.
Consensus decision making should make use of the
confronting/problem solving approach and avoid
resorting to compromising or forcing.
18. 18
When to use consensus decision
making
UnilateralConsensus
• Decision is minor or
urgent
• Does not affect the
overall team
• There are issues of
confidentiality
• Suggestions of alternatives are
needed
• The decision can have a
significant impact on the team
• The team need to action the
decision
• There is sufficient time to
organise a meeting to work
through the decision
19. 19
How to conduct a consensus decision
making session…
1. Provide a brief of what decision needs to be made, and what
information is already available. Gather additional facts.
2. Identify the alternatives.
3. Assess the alternatives, allowing all opinions and concerns to be
raised. Use a round robin* technique.
4. Identify common areas of agreement
5. Identify the differences and work through them
6. Measure consensus**
7. State the final agreed-upon decision.
* Round robin is where each of the participants in a meeting is asked in turn for their opinion.
It ensures that the quieter members of the group have a chance to express their views.
** Consensus can be measured by people raising one hand and showing the number
of fingers to indicate level of agreement, from one finger for low level of consensus
through to open hand for full consensus. Do not hold a vote, because this splits the
team into winners and losers.
