StrategyDriven » Decision-Making

Recommended Resource – What I Didn’t Learn in Business School

StrategyDriven — Thu, 13 Oct 2011 11:11:45 +0000

What I Didn’t Learn in Business School: How Strategy Works in the Real World
by Jay B. Barney and Trish Gorman Clifford

About the Reference

What I Didn’t Learn in Business School: How Strategy Works in the Real World by Jay Barney and Trish Gorman Clifford reveals the shortfalls of the principles learned in the idealistic academic environment when applied directly to the messy, unpredictable and politically charged business world. Through a storied approach, Jay and Trish reveal the inadequacies of modeling to fully predict business outcomes and the challenge of creating alignment among leaders with differing points of view and personal agendas. They go on to illustrate the power of moving leaders past the limits of these barriers and their own collective experience to gain significant marketplace advantages and organizational prosperity.

Benefits of Using this Reference

StrategyDriven Contributors like What I Didn’t Learn in Business School because it so clearly illustrates the premise for our website, namely, that while highly beneficial, academic principles must be adapted from the ideal environment of the classroom to the unpredictable environment of the shop floor in order to provide real value to any organization. Furthermore, no single model or performance measure can adequately portray a given situation in such a way that a definitive decision can be made. Rather, multiple models and measures should be employed to create a complete picture of performance from differing perspectives to enable robust decision-making.

Its well supported, fully illustrated assertion that strong business performance is achieved through the application of sound academic principles tempered by real-world business experience makes What I Didn’t Learn in Business School a StrategyDriven recommended read.

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Decision-Making Warning Flag 2 – The Silent Nod

StrategyDriven — Tue, 17 May 2011 11:27:33 +0000

All too often it is not clear to executives and managers that they are in a decision-making situation. In many of these instances, they find themselves attending a briefing during which the presenter makes a recommendation for which he or she is seeking approval. As the presentation goes on, the briefing attendees listen attentively and nod silently. No verbal decision is communicated but the nodding continues. At the end of the presentation, the presenter is songs adulated for making a thorough presentation and providing an insightful recommendation. There is applause. Exiting the meeting, the presenter remembers the affirmative statements and, most importantly the silent nods. These now become the unintended affirmative decision the presenter sought and the leaders failed to recognize they were making.

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Decision-Making Best Practice 14 – Balanced Use of Knowledge and Experience

StrategyDriven — Tue, 03 May 2011 11:46:12 +0000

It’s the age old question of which is more valuable, knowledge or experience. Those arguing for experience rightfully suggest that ‘the numbers’ can be deceiving and that the nuances of a given circumstance – unaccounted for by broadly applicable models and high-level, quantitative facts – often dictate the best course of action. Those favoring knowledge would argue that no two situations are exactly alike and that the underlying nuanced conditions providing success in the past likely went unrecognized and represent the very differences that will cause an experienced-based decision to go awry. The question is, Who is right? – those favoring knowledge or those favoring experience? Our answer is neither and both. We believe the best decisions are made using a well-proportioned blend of both knowledge and experience.

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Decision-Making Best Practice 13 – Document the Decision-Making Process

StrategyDriven — Tue, 26 Apr 2011 11:53:05 +0000

Every decision made represents a risk to the organization; some large, others small; some immediate, others latent; some positive, others adverse. Regardless of the impact, it is desirable to have each decision bring optimal benefit to the organization. Achieving these frequent, repeatable, and positive results requires a mechanism to drive consistency in decision-making; consistency that is only achieved through established procedures on which decision-makers are trained and against which performance is evaluated and acceptable behaviors reinforced.

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Decisions are Never Emotional

StrategyDriven — Mon, 17 Jan 2011 11:17:17 +0000

Imagine if instead of believing that unexpected decisions are emotional, we assume they have a very specific reason, even if we don’t understand or agree. Then what? Is it just easier to believe the other person to be irrational?

Dirty Little Secrets: Why buyers can’t buy and sellers can’t sell and what you can do about it
by Sharon Drew Morgen

Every day, business people face critical buying decisions – from new software to revamped website design to employee training programs. But all too often, the long lag time between recognizing the need for a new solution and actually purchasing and implementing it leads to lost sales, lost opportunities, and lost productivity. Thought leader Sharon Drew Morgen has uncovered what keeps organizations from moving forward and in her new book, Dirty Little Secrets, she reveals what potential buyers need to know to expedite the process of bringing positive change to their companies.

Dirty Little Secrets offers dozens of examples to clarify precisely how buying decisions can be facilitated through the right kind of questions, including an in-depth case study of a marketing manager who recognizes the need for a better website and wants to bring in an external design team. Sharon Drew explores what happens when he stumbles in the dark trying to bring his fellow managers, the internal tech team (which is responsible for the current site), and the CFO (to whom the tech team reports) on board. She then presents the same situation using Buying Facilitation^®. The result? “Decision facilitation” enables a smoother, faster process that leads to a better outcome for both the marketing manager and the design firm.

Decision-Makers Must Comply with Their System

Because decision-makers take actions that outsiders regularly believe to be ‘irrational’, we say that they are either ’stupid’ or making an ‘emotional’ decision. Neuroscientists call these decisions irrational or emotional as well. But we – the outsiders and neuroscientists – are rather biased: we see a problem, believe we know the solution, and consider our solution to be the best because it’s the most rational. We forget that every person, every group or family, every system if you will, has a very unique and idiosyncratic set of beliefs and criteria that determine their choices. And what may look irrational from the outside is very, very rational on the inside, even if sometimes unconscious.

Indeed, before anyone makes any decision, they consider it against their own beliefs. Would you walk over to a stranger in a park and harm him? No? Why not? That would be an emotional, irrational decision. But you wouldn’t do it because you have internal, unconscious beliefs and values that wouldn’t allow you to harm another person – especially a stranger.

No one makes decisions outside of their beliefs. The internal, private ’system’ that makes up our functioning rules (as individuals or groups) is sacrosanct, and if any decision might render the system useless, or ‘less-than,’ then another decision will be made. And outsiders cannot understand what’s going or become a part of that decision because, well, because they are outsiders.

If you were going to start working out daily, you’d have to either get up earlier or move something else in your schedule around. You’d have to probably start considering to eat healthier, and maybe stop having so many sugary drinks. It’s not about the gym, or about the weights; it’s about your system and how it’s willing to change so it all becomes a seamless whole that operates in tandem to serve you.

Decision-makers live in a unique system of rules and roles and relationships, history and initiatives, feelings and vendors and budgets. Change anything and everything else gets touched in some way. Before decision-makers decide, they must figure out how to manage all this so it ends up butter-side-up; understanding their needs, doing SPIN or Sandler or Relationship sales, or or or, only manages the problem end of the decision – the very, very last action that decision-makers need to take – AFTER they’ve managed their systems change bits. And again, no matter what we ask or what we are told, we can never, ever understand someone else’s system, just as they can’t understand ours.

About the Author

Sharon Drew Morgen is founder of Morgen Facilitations, Inc. (www.newsalesparadigm.com). She is the visionary behind Buying Facilitation^®, the decision facilitation model that enables people to change with integrity. A pioneer who has spoken about, written about, and taught the skills to help buyers buy, she is the author of the acclaimed New York Times Business Bestseller Selling with Integrity and the new book Dirty Little Secrets: Why buyers can’t buy and sellers can’t sell and what you can do about it. She lives in Austin, Texas.

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Decision-Making Best Practice 12 – Diverse, Redundant Data Sources

StrategyDriven — Tue, 14 Dec 2010 11:09:36 +0000

Data serves as the foundation of every decision. Combinations of data bits are logically joined to form the packets of information upon which decisions are made and actions taken. Without quality data, the probability of making the right decision is greatly diminished. Increasing data accuracy is subsequently paramount to improving decision quality.

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Recommended Resource – Decision Points

StrategyDriven — Sat, 04 Dec 2010 16:26:09 +0000

Decision Points
by former President George W. Bush

About the Reference

Decision Points by former U.S. President George W. Bush explores his decision-making and thought process when dealing with the major issues challenging his administration. Regardless of whether the reader fundamentally agrees with President Bush’s decisions, this book illustrates the many organizational, political, and social pressures that shape the decision-making processes as well as the use of multidiscipline teams, devil’s advocates, and redundant information sources. President Bush also highlights the many lessons learned through each of the complex decisions presented; what made aspects of each decision and its implementation successful and what could have been done better.

Benefits of Using this Reference

Complex decisions are never easy to make and no decision will ever please everyone. Decision Points provides an in-depth look at several of the decisions that are both familiar and shape our world today. StrategyDriven Contributors like Decision Points because President Bush’s candid reflection on his decision-making process and how he would improve on his decisions if he had the opportunity to remake them provides readers with incredibly insightful lessons learned that they can apply to their decision-making process. Additionally, many of the decision-making best practice recommendations found on the StrategyDriven website compliment those found in Decision Points; making this book a StrategyDriven recommended read.

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Decision-Making Best Practice 11 – Evaluate the Front Page Headline

StrategyDriven — Tue, 23 Nov 2010 11:15:14 +0000

Transparency motivates. Transparency shapes. Transparency drives. Decisions made in full view of those who would provide critical judgment – shareholders, regulators, employees, and the public – provides a powerfully strong guiding force that demands decision-makers fully vet the business and ethical implications of each option and soundly support their ultimate selection. Not every decision can or should be made in the public view. However, every decision-maker can challenge their team and themselves with the question, How would this decision read as a New York Times front page headline?

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Decision-Making Best Practice 10 – Establish Decision Execution Performance Measures

StrategyDriven — Mon, 05 Jul 2010 11:41:33 +0000

Managerial decisions often deal with fluid conditions and high risk situations. What might be prudent at the time a decision is made may not be appropriate soon after and could even adversely impact the organization. Therefore, execution of these decisions and the circumstances they seek to address should be actively monitored.

[private]Establishing decision execution performance measures provides the leader and team with the information needed to ensure progress is made and desired results achieved. These performance measures should seek to answer the questions:

Are we on the right track?
Do we need to adjust or change course to achieve our objectives?
Have we succeeded?

Typical decision execution performance measures answering these questions include:

task implementation schedule performance
budget performance
predictive parameters revealing the need for additional actions or revision of current actions
parameters indicating achievement of and deviation from desired outcomes

Final Thoughts…

Ensure the number and complexity of decision execution performance measures is proportionate to the decision risk, complexity, and effort. The level of effort to implement these measures should not consume so many resources as to detract from the execution of the decision actions themselves.

Additionally, construct (except maybe a full scale technology implementation where excessive effort or cost would be incurred), maintain, analyze, and act on decision execution performance measures in a similar manner to the already established organizational performance measures. If the decision execution performance measures will be in place for an extended period of time, consider adding a few of the key decision execution performance measures to management dashboards and organizational performance measure reports to ensure broad awareness and oversight.[/private]

Additional Resources

Additional information regarding the construction, maintenance, and analysis of performance measures can be found in the StrategyDriven Organizational Performance Measures topic area and Organizational Performance Measures whitepapers.

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Decision-Making Best Practice 9 – Never Let It Go Without Saying

StrategyDriven — Tue, 29 Jun 2010 11:35:57 +0000

Everyone has a collection of thoughts that are almost automatically acted upon under a given set of circumstances or in response to a specific type of event. Reflective of our beliefs and values, these actions occur naturally as if by reflex. Sometimes these thoughts and behaviors are so shaped by our values we don’t give a ‘second thought’ to acting on them; in fact, we may unconsciously believe others who generally share our convictions will act similarly. We believe ‘it goes without saying’ that these actions will occur.

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StrategyDriven Podcast Special Edition 38 – An Interview with Robert Morison, co-author of Analytics at Work

StrategyDriven — Thu, 24 Jun 2010 11:27:47 +0000

StrategyDriven Podcasts focus on the tools and techniques executives and managers can use to improve their organization’s alignment and accountability to ultimately achieve superior results. These podcasts elaborate on the best practice and warning flag articles on the StrategyDriven website.

Special Edition 38 – An Interview with Robert Morison, co-author of Analytics at Work explores how to leverage analytics to make better business decisions that ultimately lead to superior business results. During our discussion, Robert Morison, co-author of Analytics at Work: Smarter Decisions, Better Results shares with us his insights and illustrative examples regarding:

the tangible benefits leaders realize as a result of incorporating analytics in their decision-making process
balancing the art and science of decision-making and recognizing when the process is out-of-balance
types of questions analytics can help answer
the five stages of analytical maturity
the five key analytics DELTA components: Data, Enterprise, Leadership, Targets, and Analysts

Additional Information

In addition to the invaluable insights Robert shares in Analytics at Work and this special edition podcast are the resources accessible from his website, www.AnalyticsAtWorkBook.com. Robert’s book, Analytics at Work, can be purchased by clicking here.

Final Request…

The strength of our community grows with the additional insights brought by our expanding member base. Please consider voting for us on Podcast Alley by clicking here. Casting your vote for the StrategyDriven Podcast improves our ranking and helps us attract new listeners which, in turn, helps us grow our community. Thank you again for listening to the StrategyDriven Podcast!

About the Author

Robert Morison is co-author of Analytics at Work. For the past twenty years, Robert has led breakthrough research at the intersection of business, technology, and human asset management. He has written or overseen more than 130 research and management reports on topics ranging from business reengineering to electronic business to workforce demographics. Robert is co-author of three Harvard Business Review articles and Workforce Crisis: How to Beat the Coming Shortage of Skills And Talent. To read Robert’s complete biography, click here.

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Decision-Making Best Practice 8 – Observe the Opportunity or Problem First Hand

StrategyDriven — Tue, 25 May 2010 11:19:43 +0000

Every problem possesses unique nuanced qualities and it is often these minor details that renders a decision a striking success, a monumental failure, or, most frequently, simply average. Those who recognize these details can exploit them to their organization’s advantage. Those who fail to make the observation at best forfeit the possibility to exploit these opportunities and at worst find their actions rendered ineffective or even counterproductive.

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Decision-Making Warning Flag 1c – ad hominem: Personal, Not Issue Attacks

StrategyDriven — Tue, 30 Mar 2010 11:33:33 +0000

“An ad hominem argument, also known as argumentum ad hominem (Latin: “argument to the man”, “argument against the man”) consists of replying to an argument or factual claim by attacking or appealing to a characteristic or belief of the person making the argument or claim, rather than by addressing the substance of the argument or producing evidence against the claim. The process of proving or disproving the claim is thereby subverted, and the argumentum ad hominem works to change the subject.

It is most commonly used to refer specifically to the ad hominem abusive, or argumentum ad personam, which consists of criticizing or attacking the person who proposed the argument (personal attack) in an attempt to discredit the argument. It is also used when an opponent is unable to find fault with an argument, yet for various reasons, the opponent disagrees with it.”

Ad Hominem
Wikipedia

The ‘Old Boys Club’

Product defects plague a company’s profitability; warrantee repairs, returns, and lost sales robbing the organization of its already slim profit margins. Executives assembled an engineering team to assess product designs and material quality in hopes of identifying a root cause to the defective product issue. A junior member of the assessment team, a young, recently hired assembly line supervisor, identifies the lack of routine calibration of critical cutting tools as a contributor to the poor fit of key product components. The tenured company engineers on the team discount the supervisor’s observation because he’s too young and too new to know what’s really important. These senior engineers have just made an ad hominem argument to advance their position.

[private]Ad hominem arguments are bias-based logic fallacies made to support business decisions every day. As with all logic errors, decision-makers fall prey to the appearance of reasonableness, especially when the assertion supports their desired course of action. Although difficult, recognizing and eliminating the use of ad hominem arguments in decision-making is absolutely necessary.

Ad hominem occurs when a decision-maker asserts that because there is something objectionable with the individual offering a particular solution that the solution itself is also defective. In the product defect example, senior engineers inappropriately correlate the relative inexperience of the junior assembly line supervisor with the quality of his recommendation. Breaking down the product quality example reveals the correlation weakness:

Person 1 makes Claim X

The assembly line supervisor identifies a lack of tool calibration as resulting in poor component manufacturing quality.

There is something objectionable about Person 1

The assembly line supervisor is relatively young and new to the company as compared with the senior engineers on the assessment team and therefore is naïve.

Therefore Claim X is false

Lack of tool calibration as a potential cause is a naïve solution and should be rejected.

The fallacy associated with ad hominem arguments is that they seek to establish a relationship where none exists. Subsequently, decision-makers consumed by this false logic risk omitting a strong, if not the best, possible solution to the issue they are addressing.

Recognizing Ad Hominem Arguments

Logic errors are often difficult to recognize, ad hominem arguments being no exception. Questions decision-makers should consider in order to avoid ad hominem arguments include:

Was the rejection of an individual’s recommendations or opinions based on personal factors such as age, past associations or lack of association, race, gender, ethnic background, workgroup within the organization, employer (outside consultants), and/or college?
Did the assertion suggest the quantitative data provided by an individual was intended to be subversive?
Were individuals excluded from decision-making by not being invited to meetings?
Were meetings held at times when the person is unavailable?
Were meetings scheduled at the last minute or impromptu decision-making meetings when the person was unlikely not to receive notification of the meeting until after it already started or concluded?
Has the individual been blocked from offering an opinion during a meeting as a result of poor facilitation or more blatant cutting-off debate/conversation before the individual had the opportunity to communicate often in the name of saving time or rapping things up?
In more extreme cases, were character attacks, name calling, and/or the application of derogatory personal labels levied against the individual?
Does the decision-making process demand multidiscipline participation or input to decision making?
Does the decision-making process demand, at a minimum, the seeking of direct input from all team members?

Final Thoughts…

Ad hominem behaviors are often not limited to an individual but are cultural in nature. The behavior is more prevalent in less diverse organizations because the pervasive ‘like me’ identity. Ad hominem arguments within these organizations are levied against those few whose personal characteristics differ from that of the core group. These organizations suffer from biased-based decision-making that shuns input based on characteristics such as gender, age, race, religious and political affiliation, sexual orientation, workgroup, or some combination. Hence the term ‘Old Boys Club.’

Besides eroding decision-making for the decision at hand, ad hominem arguments erode the long-term decision-making ability of the organization because targeted individuals will be less apt to share their insights and perspectives in order to avoid personal attacks. These individuals are likely to become increasingly disenfranchised with the organization; often resulting in lower productivity and possibly attrition.

Additional Information

Additional insight to the warning signs, causes, and results of logic errors can be found in the StrategyDriven website feature: Decision-Making Warning Flag 1 – Logic Fallacies Introduction.

Insights on organizational diversity and inclusion can be found in the StrategyDriven topical area: Diversity and Inclusion.[/private]

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Decision-Making Best Practice 7 – Identify the Decision-Maker

StrategyDriven — Sat, 06 Mar 2010 11:17:43 +0000

Organizations confer varying degrees of decision-making authority to their executives, managers, and employees typically based on their positions within the organization. In many circumstances, this results in more than one individual possessing the authority to render a decision for the particular question at hand. Because there should be only one decision-making authority (see StrategyDriven Decision-Making Best Practice 1 – There Can Be Only One), it becomes necessary to identify who among the potential decision-makers is the individual on whose authority the selected course of action will be taken.

[private]Identifying the decision-maker is critical to achieving a successful outcome. Without this designation, no one individual truly owns the decision or can be held accountable for it. Those implementing the decision lack the requisite knowledge of whom to report action status and results. Needed changes may lack the coordination needed to be effective or be counter to the decision’s goals because those authorizing such changes lack the ‘big picture’ view of the situation.

Identifying the decision-maker, especially for complex situations involving teams of people, should also include overt communication of that designation. This ensures everyone involved in the decision-making and execution process clearly understands the chain of command such that reports and change authorizations are appropriately directed.

Final Thought…

Serving as the designated decision-maker is a powerful leadership development tool. Whenever possible, senior managers should seek to confer this responsibility to high potential, junior personnel. When doing so, however, the senior manager must assume and remain in the role of coach and mentor; allowing their junior to be the decision-maker and not usurp this individual’s authority. Only then will the junior staff member truly benefit from the experience.[/private]

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Decision-Making Best Practice 6 – Follow-up Assessments

StrategyDriven — Tue, 23 Feb 2010 11:05:40 +0000

Decisions, both large and small, define an organization, its culture, its direction, its public image, and ultimately its success or failure. Each decision and the process of making and executing on it provide all those involved with a new experience from which to draw upon when making future selections. Organizations, however, are living things; people come and go, memories fade, and circumstances change. Therefore, in order to fully benefit from the hard won and often expensive experience gained through decision-making, a mechanism must be in place to gather, assess, and then make available these lessons learned.

[private]Principles of Effective Follow-up Assessments

A well defined post-decision assessment process maximizes the amount of insightful knowledge gathered and the effectiveness of imparting that knowledge to other organization leaders. Such a decision assessment process is most effective when it:

occurs sat a predefined time following the decision; balancing the evaluation team’s ability to assess decision outcomes (longer-term) with ability to gather critical information regarding situational conditions, individual judgments, and decision reasoning before nuanced memories fade (short-term)
evaluates decision reasoning and actions taken against established expectations
assesses impacts to the organization’s culture, relationship with key stakeholders (employees, shareholders, government agencies and regulators, suppliers and vendors, and customers), ant public perception
includes input from all significant decision-making process participants
reviews the decision-making process; asking questions such as:

How readily did the organization recognize a decision needed to be made (degree of situational surprise)?
How were solution options identified and risks assessed?
Did participants identify all reasonably available options?
What was the level and quality of contribution by multidiscipline team members?
Was the speed of decision-making appropriate for the risk involved and the rate of situational evolution?
Were decision communications clear? Did decision communications reach their intended audience and were they accurately interpreted?
Were implantation resources, including skilled personnel and material/component/tool resources available and acquired?
Were follow-up actions implemented as intended?
Were decision response mechanisms employed and appropriate adjustments made as conditions changed?

examines the mechanical processes performance including mathematical calculations and decision logic
determines the degree to which outcomes aligned with decision objectives and if those outcomes resulted from the decision and actions taken or in spite of those actions (the result of circumstances beyond the influence of the organization and/or simple luck)
is performed by someone or group outside of the decision being assessed but well informed of the decision and trained in the decision-making process and accompanying practices
documents lessons learned and makes them readily available and easily retrievable
communicates results, updates processes, and incorporates lessons learned into training programs

Final Thoughts…

Aggregate the lessons learned across decisions made over time to help readily identify programmatic improvement opportunities with the decision-making process and supporting training courses. These assessments can also be used to measure the effectiveness of decision-making training and applications of lessons learned by evaluating whether or not decision errors are repeated.[/private]

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Decision-Making Best Practice 5 – Ongoing Decision Evaluation

StrategyDriven — Wed, 03 Feb 2010 04:23:39 +0000

Decision-making involves a degree of risk that increases with the complexity of the decision to be made. Good decisions not only yield desired results but also minimize the risk exposure of the individual or organization making and executing the decision. While there are many ways to minimize decision risk, one that is often overlooked is the ongoing evaluation of the execution of the decision-making process itself.

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New Whitepaper Release – Evaluating Decision Options

StrategyDriven — Wed, 28 Oct 2009 00:37:46 +0000

StrategyDriven contributors are pleased to announce the release of our sixth whitepaper: Evaluating Decision Options.

Options and Tradeoffs…

Decision-making often involves trade-offs. Risk aversion suggests that all things being equal, decision-makers will select the option having the lowest risk. But because all things are never quite equal, decision-makers concede items they deem to be of lesser value to items they believe hold greater value with risk being one of the commodities considered.

Decisions involve a choice between two or more complex options. This complexity is a result of the multiple characteristics that define each option and will impact the probability of achieving a desired outcome. In making a selection, the decision-maker is attempting to choose the mix of characteristics that will most optimally achieve the desired result.

The StrategyDriven Evaluating Decision Options whitepaper provides decision-makers with a three step process to use when evaluating and selecting from several differing decision options. These steps are detailed with supporting principles and philosophy; helping users understand the reasoning behind each action.

The Decision-Making – Evaluating Decision Options, Strategic Planning – Analysis, Organizational Performance Measures – Alignment, Organizational Performance Measures – Types, Organizational Performance Measures – Selection, and Organizational Performance Measures – Construction whitepapers are available to Registered Members. If you have not already done so, please click here to register and join the conversation.

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Problem-Solving Success Tip: Measure

StrategyDriven — Tue, 04 Aug 2009 07:52:30 +0000

Measure.

The first key question to answer in starting a problem-solving project is, “How will you know when the problem is solved?” Answer this question in measurable terms before you start trying to solve the problem. As you begin defining your problem, these success metrics help set clear expectations about what will be different when you finish. At the end of the project, the measurements will demonstrate that the difference has been achieved, i.e., the problem has been solved.

To be useful, success measurements must be simple in concept and connected so clearly to the problem that you can remember them easily. As with the description, somebody who doesn’t already know about the problem should be able to read your success criteria and understand them.

The objective in setting success metrics for a problem-solving project is to define the minimum necessary to solve the problem. This is completely opposite to the way we usually set goals. In problem-solving, we want to do everything necessary to solve the problem, but nothing extra.

Once you decide what your success metrics will be, check them with real data. This not only verifies that you really can collect and report the measurements, but also lets you establish baselines. Measure exactly what your performance is before you start analyzing the problem and taking corrective action. The baseline measurements let you confirm that there really is a problem and sanity checks the performance levels you’ve defined as success. You can make corrections if necessary, before you start down a wrong path.

Measure to determine that the problem is solved, but also use measurements throughout the problem-solving process. Measurements can also help you test assumptions, verify root causes, assure tasks are completed properly and report progress.

Bottom line: if you don’t measure, you won’t know for sure. Use measurements to learn and portray the truth – the real truth, not what you wish were true.

Article Source:
http://www.bestmanagementarticles.com
http://business-management.bestmanagementarticles.com

About the Author:

Jeanne Sawyer helps her clients solve expensive, chronic problems, such as those that cause operational disruptions and cause customers to take their business elsewhere. These tips are excerpted from her book, When Stuff Happens: A Practical Guide to Solving Problems Permanently. Now also an ebook, find out about it and get more free information on problem solving at her web site: http://www.sawyerpartnership.com/.

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Problem-Solving Success Tip: Test Your Assumptions About Everything

StrategyDriven — Thu, 23 Jul 2009 17:36:45 +0000

Test your assumptions about everything.

Assumptions have a way of creeping into all parts of a problem-solving project. They’re often wrong, which can lead to a lot of wasted effort and even cause a problem-solving project to fail entirely. It’s very easy to take a strongly stated assertion as true, especially if it’s the boss who makes it. Remind everyone involved to be skeptical and on the watch for untested assumptions.

Problem definition. Check the facts first to be sure that you and your team understand the problem the same way, and that you have data to confirm that the problem is important. Testing assumptions about the problem definition could include interviewing participants, collecting measurements, creating flow charts of what really happened, etc.

Organizing your project. Don’t assume that the resources you need to solve the problem will automatically be available to you. Solving a messy problem is a project. Treat it that way by developing a project plan, obtaining sponsorship, getting commitment to participate from key players, etc.

Root Cause Analysis. This is a favorite spot for untested assumptions to show up, especially if you use a root cause analysis method based on brainstorming. Once you’ve got a list of possible causes, be sure to collect data, devise tests or do whatever you have to verify which causes are real.

Choosing solutions. Test assumptions about proposed solutions by answering the questions: “How likely is the approach to eliminate a root cause of this problem” and “How practical is this approach (do I have the resources to actually do it and can I achieve the solution in an appropriate amount of time)?”

Testing assumptions throughout the problem-solving process will greatly improve your chances of solving the right problem successfully.

There is nothing so deceptive as an apparent truth.
- Russell Ackoff

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Problem-Solving Success Tip – Use Your Time for Problems That are Truly Important

StrategyDriven — Fri, 17 Jul 2009 03:36:48 +0000

Use your time for problems that are truly important.

Hard as it may be to walk away once you’re aware of it, just because a problem is there doesn’t mean you have to solve it. Ask yourself and your colleagues, “What will happen if we don’t solve this problem?” If the answer is, “not much,” then turn your attention to something more important. If you don’t know what will happen, find out before you undertake a problem-solving project. It should be clear to you and everyone else involved that the problem is worth the effort-and expense-to fix it.

Quantify the cost of the problem quickly, but as realistically as you can. Include lost opportunity costs as well as real expenses such as staff time to deal with the problem, travel expenses, etc. Use actual costs where you can; estimate where you can’t. Then guesstimate what it will cost to analyze and fix it. Write your analysis down, stating all your assumptions explicitly. Get a colleague to verify that your assumptions and estimates are reasonable. Start with a rough “order of magnitude” estimate. That may be enough to answer the question of whether you should proceed. If it’s not clear, especially if the cost to solve it will be high, do a more careful analysis.

If it will cost more to fix than to live with the problem, or if the number is even close, perhaps your resources (time, people, money) are better spent on other projects. If you decide to proceed anyway, you can do so with a better understanding of what you’re undertaking. On the other hand, if you can demonstrate that the cost of the problem is much higher than the cost of solving it, using estimates based on reasonable assumptions, it will generally be much easier to get the resources you need. You can use your written analysis as a sales tool to help win support for your decision to proceed or not.

We have to learn to distinguish those things that are truly important from those that are merely urgent.
- Jerry D. Campbell

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Problem-Solving Success Tip: Define the Problem First

StrategyDriven — Tue, 07 Jul 2009 18:37:06 +0000

It seems obvious, but how many times have we gone to a problem-solving meeting and the discussion started with either whose fault was it or an assertion about the proper solution?

Instead, start by explaining what the problem is – what went wrong, what the symptoms are, what the impact on your business and your customer’s business is. These are the things that someone knows at this point in the problem solving process. If the someone is not you, and you’re leading the problem-solving effort, you need to do some research to find out. No guesses or assumptions allowed: the problem description must give the facts clearly and accurately.

Write it down. Writing the problem down forces you to describe it carefully, completely and unambiguously. The statement is a valuable tool to help focus your team on the real problem and avoid wasting time on extraneous issues. Everyone who reads it should understand what the problem is and why it’s important. No jumping ahead, either: you don’t know yet what caused the problem much less what you will do to fix it.

The written statement can also be used as a “sales tool” to explain what problem you’re solving and why it’s important. Use it to make sure you have the support you’ll need from management, your customer and any other key players. This is especially important if the significance of the problem is not universally understood or accepted.

The problem is defined when everybody who reads your problem statement, including you, understands what will be different when the problem is solved and your team agrees that it describes the correct problem.

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Five Problem-Solving Success Tips

StrategyDriven — Thu, 25 Jun 2009 16:27:06 +0000

The ability to solve complicated problems quickly is more important than ever in today’s competitive world.

From the time we’re little kids, we’re taught to solve problems by trial and error. That’s fine if the problem is as simple as a burned out light bulb. When the problem is a muddle of business, technical and political problems, we need something that helps us untangle the mess. Unless you’re Harry Potter, treating a mess like a burned out light bulb is as effective as wishing for magic.

Fortunately, there are alternatives to magic. Many key concepts in problem solving seem obvious but are often overlooked, causing delays and frustration in getting important problems solved. Here are some tips and reminders that will help you solve messy problems quickly and easily.

** Define the problem first.
Explain what the problem is – what went wrong, what are the symptoms, what is the impact on your business. Write it down. Everyone who reads it should understand what the problem is and why it’s important. Caution: describe the problem, not what you will do to fix it.

** Use your time for problems that are truly important.
Just because a problem is there doesn’t mean you have to solve it. If you ask, “what will happen if I don’t solve this problem?” and the answer is, “not much,” then turn your attention to something more important.

** Test your assumptions about everything.
Check the facts first. Be sure that you and your team understand the problem the same way, and that you have data to confirm that the problem is important. Test the assumptions about proposed solutions to improve the chances your solution will actually solve the problem.

** Measure.
The key question to answer is, “How will you know when the problem is solved?” If you don’t measure, you won’t know for sure. Use measurements to learn and portray the truth-the real truth, not what you wish were true.

** Measure the right things.
A common measurement trap is to measure something because it’s “interesting.” If knowing a measurement won’t change anything (e.g., help you make a decision, verify an assumption or prove the problem is solved), then don’t waste your time measuring it.

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New Model Release – Decision Alignment Model

StrategyDriven — Thu, 04 Dec 2008 05:47:10 +0000

StrategyDriven contributors are pleased to announce the release of our eighth model: Decision Alignment Model.

Credibility of the organization’s mission and values depends largely on management decisions that exemplify them. Maintaining credibility includes strong reinforcement of mission goals and organizational values when decisions are made that affect cost, production, and/or schedule.

Consistency between leadership’s decisions and the organization’s mission and values is vital in light of today’s growing production pressures. Whereas personnel attitudes and actions reflect those of their supervisors, all executives and managers must continuously reinforce their commitment to the organization’s mission and values, particularly through their decisions. It is only when personnel perceive management’s commitment as unwavering that their day-to-day decisions and activities will align with the organization’s overarching objectives.

The StrategyDriven Decision Alignment Model is an easy-to-use tool that helps leaders assess the consistency of their decisions with the organization’s mission including identification of outcome misalignment causes.

The Decision Alignment, Opportunity & Problem Statement Development, Information Development, Stakeholder Commitment Evaluation, Decision-Making Base, Business Process Relationships, Strategic Organizational Alignment, and Strategic Pyramid models are available to Registered Members and registration is FREE! If you have not already done so, please click here to register and join the conversation.

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Decision-Making Warning Flag 1b – Weak Analogies

StrategyDriven — Sun, 16 Mar 2008 14:16:48 +0000

“The fallacy of Weak analogy is committed when a conclusion is based on an insufficient, poor, or inadequate analogy. The analogy offered as evidence is faulty because it is irrelevant; the claimed similarity is superficial or unrelated to the issue at stake in the argument. Or the analogy may be relevant to some extent yet overlooks or ignores significant dissimilarities between the analogs.”

Paul Leclerc
Community College of Rhode Island

Citizens have been asked to cast their vote for a referendum requiring those seeking to purchase a hammer to undergo a registration process similar to that for firearms. Supporters argue that because hammers, like guns, have metal parts and can be used to kill people that these tools should be legally controlled as guns are. These proponents are using a Weak Analogy to advance their position.

Weak analogies are used to support business decisions every day. As with all logic errors, decision-makers fall prey to the appearance of reasonableness, especially when the position supported justifies their desired course of action. Although difficult, recognizing and eliminating the use of Weak Analogies in decision-making is absolutely necessary.

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Decision-Making Warning Flag 1a – The Gambler’s Fallacy

StrategyDriven — Sun, 02 Mar 2008 06:29:15 +0000

“The Gambler’s Fallacy, also known as the Monte Carlo Fallacy, is the false belief that the probability of an event in a random sequence is dependent on preceding events, its probability increasing with each successive occasion on which it fails to occur.”

Gambler’s Fallacy
Wikipedia

Seated at a roulette table, a gambler must decide on what color to place his next bet, red or black. He knows there is a 50 percent chance of getting either red or black and that the first four spins of the wheel yielded all reds. The gambler reasons that because half of all spins should result in black and the first four were red, it is more likely the fifth spin of the roulette wheel will be black and places his bet. While his logic appears reasonable, the roulette player has just fallen victim to the Gambler’s Fallacy.

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Decision-Making Warning Flag 1 – Logic Fallacies Introduction

StrategyDriven — Sun, 10 Feb 2008 18:59:32 +0000

Complex decisions require executives and managers to synthesize a multitude of variables into meaningful information from which they must choose a course of action. Some executives and managers combine clarity of thought and depth of knowledge and experience with a true understanding of the organization’s goals to identify and select a well founded decision option. Others find their perspective clouded by personal bias, self interest, misinformation, inexperience, and/or a lack of decision-making fundamentals knowledge; falling prey to logic fallacies, the misapplication of logic during problem solving. While a lack of knowledge and/or experience with problem solving may contribute to logic errors, they are typically the product of decision-makers’ underlying desires.

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Decision-Making – Evaluating Decision Options, part 3 of 3

StrategyDriven — Sun, 13 Jan 2008 17:33:52 +0000

Alternative selection is the point in the decision-making process where art meets science and academic knowledge meets hands on experience. There is often no one perfect solution or one best solution. Rather, there will exist several alternatives within the acceptable value range from which the decision-maker will ultimately have to choose one option.

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Decision-Making – Evaluating Decision Options, part 2 of 3

StrategyDriven — Sun, 06 Jan 2008 19:20:25 +0000

Once a decision’s requirements, important value-adding, and nice-to-have characteristics are defined and various options possessing these qualities evaluated, the total value of each alternative must be assessed in order to enable option selection that will most effectively achieve the desired results.

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Decision-Making – Evaluating Decision Options, part 1 of 3

StrategyDriven — Sun, 30 Dec 2007 20:14:59 +0000

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New Model Release – Opportunity & Problem Statement Development Model

Karen Juliano — Sun, 04 Nov 2007 14:08:10 +0000

StrategyDriven contributors are pleased to announce the release of our seventh model: Opportunity & Problem Statement Development model. This model compliments StrategyDriven‘s decision-making best practices Identify the Target and Multidiscipline Teams by illustrating the often complex, multifaceted nature of organizational opportunities and challenges and how cross-functional teams are needed to ensure full understanding and appropriate response is taken to maximize benefits or minimize losses.

The Opportunity & Problem Statement Development, Information Development, Stakeholder Commitment Evaluation, Decision-Making Base, Business Process Relationships, Strategic Organizational Alignment, and Strategic Pyramid models are available to Registered Members and registration is FREE! If you have not already done so, please click here to register and join the conversation.