Problem Session 4 - Framing and Structuring Decisions

Copyright 2009 by burke robinson llc 4 2 and

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Unformatted text preview: ous logical reasoning. Copyright 2009 by Burke Robinson, LLC 4 2 ...and use the normative, systems approach of decision analysis to tune up your gut feel. If we rely on nothing but intuition to make important decisions, we'll make mistakes. Behavioral studies show how most of us fall into traps and make irrational decisions. We also mistakenly pursue the Holy Grail of Certainty or suffer from analysis paralysis. If we tune up our gut feel with decision analysis, we'll get the benefit of both perspectives. Some wise framing, structuring, modeling, assessment, framing, analysis, and appraisal can go a long way toward a better understanding of our decisions. Reasoned reflection can shine a bright light of clarity and provide concise insights on tough decisions. Copyright 2009 by Burke Robinson, LLC 5 Just to drive this last point home. On December 4, 2000, in a crowded graduate seminar at Stanford, a name-brand consultant (and frequent contributor to WSJ and HBR namearticles) described his view of how successful companies make strategic decisions. He roundly criticized the old-school, rigorous, quantitative analysis of oldbusiness strategy. Instead, he lauded new economy companies that "think organically, have an evolutionary strategy, and fly by the seat of their pants." His shining example of success was one of his long-standing clients, an energy longtrading company that was rapidly moving up the Fortune 100 list. Can you guess who the client was? Copyright 2009 by Burke Robinson, LLC 6 3 Use the right decision process to deal with organizational and technical complexities. Organizational/People Complexity High Several fundamentally different frames Resource constraints: budget, staff, time Inadequate skills or core competencies Diverse constituents with conflicting values Organizational inertia and barriers to change Lack of alignment and empowerment Low Power politics, dominant personalities, and complex interpersonal/group dynamics Facilitative Leadership Dialogue Decision Process Traditional Decision Analysis High Decide Now Low Technical/Data Complexity Multiple objectives requiring tradeoffs Dynamic interactions, systems models Uncertain scenarios, informational biases Probabilistic interdependencies Unpredictable results with considerable risk Many alternatives, some contingent on others 7 Copyright 2009 by Burke Robinson, LLC Decision quality results from the right people doing the right thing in the right way. People Process Content Al...
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This note was uploaded on 06/16/2010 for the course MS&E 352 taught by Professor Ronhoward during the Winter '09 term at Stanford.

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