Decision Making: Making Tough Decisions
Presentation & Facilitation Guide
© 2011 SkillSoft Ireland Limited
Introduction and Ground rules
• Presenter: [enter name of presenter or facilitator].
• Target audience: Individuals who want to develop or improve their
problem-solving and decision-making skills.
• Goal: To reduce uncertainty, make informed trade-offs, and place
appropriate trust in your intuition when making difficult decisions.
• Ground rules:
• list ground rules here.
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Agenda
• Course Overview.
• Topic 1: Dealing with Uncertainty in Decision Making.
• Topic 2: Compromises and Trade-offs in Decision Making.
• Topic 3: Using Your Intuition in Decision Making.
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Course Overview
Making a decision can be tough
• Deal with uncertainties.
• Make trade-offs.
• Balance logic and intuition.
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Course Overview
Choosing good alternatives:
• Gather information and opinions.
• Limit the amount of information.
• Focus on the most important elements and goals.
• Merge logic and intuition.
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Topic 1: Dealing with Uncertainty in Decision Making
Recognize how to deal effectively with uncertainty in decision making.
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Uncertainty and its Different Levels
• You can’t predict the future.
• Uncertainty complicates decisions.
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Reflect
Say a transport company is doing well and its managers are thinking about
expanding the business. They can estimate the returns this will yield over
the next year, but not without guesswork.
What uncertainties do you think will surround this decision?
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Different Levels of Uncertainty
• Single outcome.
• Few outcomes.
• Range of outcomes.
• Complete uncertainty.
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Discussion
How do you prepare yourself for necessary risk taking?
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Tackling Uncertainty
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Practice
Sequence the steps for tackling uncertainty head-on.
___
Reduce key uncertainties.
___
Prioritize unknowns.
___
Identify unknowns.
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Identifying Areas of Uncertainty
The decision-making model
1. Establish a context for success.
2. Frame the issue properly.
3. Generate alternatives.
4. Evaluate the alternatives.
5. Choose the best alternative.
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Brainstorming
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Identifying Areas of Uncertainty
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Practice
A project team identifies a range of uncertainties while planning the construction of a
new conveyor belt. The team doesn't approach experts before assigning estimates.
How can it improve its handling of uncertainties?
A. Express competitors' actions in a range.
B. Express each uncertainty as a value range.
C. Express the confidence level as a range.
D. Give competitors' actions a confidence value.
E. Consult experts to review the estimates.
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Uncertainties
Installation cost.
Downtime.
increased sales.
increased production.
competitors‘ actions.
Estimate
$4,000.
2 weeks.
5%.
60%.
Might have an effect.
Prioritizing the Unknowns
• Gauging the impact.
• Prioritizing according to impact.
• Identifying and clarifying.
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Identifying and Clarifying
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Practice
What are appropriate activities for the second step of dealing with uncertainty
in decision making?
A. Establish the impact each uncertainty may have on the outcome of your
decision.
B. Reorder the unknowns into a prioritized list.
C. Clarify the impact of unknowns that may interact by multiplying their
values.
D. Prioritize the uncertainties that are more easily dealt with.
E. Prioritize the unknowns according to how immediate their effect will be.
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Reducing Key Uncertainties
• Identify the unknown areas.
• Prioritize the unknowns.
• Reduce key uncertainties.
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Discussion
What methods can you use to acquire knowledge that will help to
reduce uncertainty?
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Acquire Relevant Knowledge
• Customer research.
• Group discussions.
• Customers' previous experiences.
• Product testing.
• Simulation of product.
• Seeking additional information.
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Manage Uncertainty
• Bring the horizon closer.
• Take risk-reducing steps.
• Create contingency plans.
• Implement probation periods.
• Implementing a decision in stages.
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Create Contingency Plans
• Envision what could go wrong.
• Plan how to respond.
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Reducing Uncertainty
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Practice
What are examples of valid strategies for reducing key uncertainties in
decision making?
A. Jonas develops a backup plan that requires 24-hour shift work in case employees
reject his plan to introduce overtime.
B. Valerie reduces production time to beat competitors.
C. Dave is nervous about production, so he divides the project into stages, with a
review after each stage.
D. Samantha cuts out the uncertainties that are most difficult to deal with when hiring
a new employee.
E. Rachel introduces probationary periods for new employees when making a hiring
decision.
F. Carlos conducts research before developing a prototype.
G. Claude writes a detailed plan of action.
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Topic 2: Compromises and Trade-Offs in Decision Making
Using a consequence matrix, make a decision that involves a trade-off.
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Trade-offs
• Serve vested interests.
• Ensure approval.
• Represent the path of least resistance.
• Look good.
• Save face.
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Trade-offs
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Reflect
Think about a situation in which you had to make a decision similar to
John's, which involved having to decide on the best alternative given a set
of pros and cons.
How did you ultimately reach a decision?
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Consequence Matrices
• Create a consequence matrix.
• Eliminate weaker alternatives.
• Make trade-offs between objectives.
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Create a Consequence Matrix
• Alternatives.
• Objectives.
• How each alternative affects each objective.
• Consequence matrix.
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Discussion
What are some of the common day-to-day decisions you have to
make that involve trade-offs between various alternatives?
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Create a Consequence Matrix
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Create a Consequence Matrix
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Create a Consequence Matrix
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Practice
Access the learning aid Lauren's Consequence Matrix to review a
consequence matrix. Then match the decision objectives to the
corresponding rankings in the matrix.
A.
B.
C.
D.
Monthly salary .
Vacation entitlement .
Pension benefits.
Healthcare benefits.
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___
___
___
___
1, 1, 2, 1
3, 1, 1, 2
1, 3, 2, 1
1, 3, 4, 2
Eliminate Weaker Alternatives
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Eliminate Weaker Alternatives
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Practice
David needs to decide which of four Internet service providers – commonly known
as ISPs – will best meet his company's needs. So he creates a consequence
matrix with three objectives – monthly cost, initial connection fee, and helpdesk
support and maintenance. He includes rankings to indicate how well each
alternative meets each objective.
Which two alternatives can David eliminate?
A. ISP B.
B. ISP D.
C. ISP A.
D. ISP C.
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Make Trade-Offs
• Be prepared to artificially eliminate objectives.
• Review the consequence matrix.
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Reflect
Review the consequence matrix.
Do you think you can automatically eliminate any other objectives?
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Deal with Remaining Objectives
• What change would eliminate objective?
• What change would compensate for elimination?
• Make the switch.
• Remove canceled objective.
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Deal with Remaining Objectives
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Practice
Based on Tina's consequence matrix, which caterer do you think
is the best alternative? C or D?
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Quantifying Consequence Costs
• Organizational policy.
• Strategic goals.
• Decision makers' preferences.
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Quantifying Consequence Costs
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Practice
Which further objective can Denver eliminate to make it easier to compare
the remaining two alternatives?
A. Roadside assistance plan.
B. Amount of deposit.
C. Cost per day.
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Practice
Which company represents the best alternative in Denver's case?
A. Company B.
B. Company A.
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Topic 3: Using Your Intuition in Decision Making
Recognize the proper role of intuition in decision-making.
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Intuition vs. Rational Decision Making
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Reflect
Do you think you should focus only on what's logical when making
decisions? Or should you take your initial instincts into account?
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Rational Decision-Making
• Analyze the situation.
• Formulate the issues.
• Determine the objective.
• Decide which alternative is best.
• Implement the decision.
• Monitor and adjust.
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Intuition
• Experiences.
• Memories.
• Conditioning.
• Pattern recognition.
• Inherent knowledge.
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Situations that Require Intuition
• Not enough time.
• Not enough factual information.
• Decision too complex and ambiguous.
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Classifying Decisions
• Soft decisions.
• Decisions based on hard data.
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Practice
In which types of decisions does intuition generally play a larger role?
A. Determining next quarter's budget.
B. Planning and scheduling a new project.
C. Deciding a marketing approach for a new product.
D. Making decisions involving people management.
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Balancing Intuition with Logic
• Pattern recognition.
• Understand situations quickly.
• Recognize what actions to take.
• Apply past experiences.
• Spot future problems.
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Discussion
How well are you able to balance intuition and logic?
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Practice
Which statements about the role of intuition in decision making are valid?
A. Your intuition involves the ability to recognize patterns, which is also an advantage
for rational decision making.
B. Emotion and intuition are linked and used in decision making.
C. Instinct is knowledge you acquire through experience.
D. Using intuition alone results in the best decisions.
E. It's best to use a combination of rational analysis and intuition when making
decisions.
F. If a situation is constantly changing, it's especially important to use strictly rational
analysis.
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Wrap-up/QA
• Topic 1: Dealing with Uncertainty in Decision Making.
• Recognize how to deal effectively with uncertainty in decision making.
• Topic 2: Compromises and Trade-offs in Decision Making.
• Using a consequence matrix, make a decision that involves a trade-off.
• Topic 3: Using Your Intuition in Decision Making.
• Recognize the proper role of intuition in decision-making.
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