Baxter Decision Making

Decision Making

Too important to leave to Luck

Jim Marteney & Associates jimmarteney@gmail.com

Population of Turkey

Greater or Less Than

35,000,000

Population of Turkey

78,785,548

Mental Trap

Unconscious mental routine that leads us to make poor decisions

Anchoring Trap

Mind gives disproportionate weight to the first information it receives.

Initial impressions, estimates, or data anchor subsequent thoughts and judgments.

Status Quo Trap

We instinctively stay with what seems familiar.

People want to avoid, “rocking the boat”

We look for decisions that involve the least change

More alternatives, stronger status quo

Sins of commision punished more than sins of omission

Justify Past Actions Trap

more invested in the past, more difficult to change

Don’t cultivate a fear of failure

culture

Framing Trap

The way a problem is worded or “framed” can profoundly influence the choices one

makes

Framing TrapPeople are:

risk averse when a problem is posed in terms of gains

risk seeking when a problem is posed in terms of avoiding losses

Framing TrapWhich would you choose?

A sure gain of $3,000

80% chance of winning $4,000 and a 20% chance of winning nothing

Framing TrapWhich would you choose?

A sure loss of $3,000

80% chance of losing $4,000 and a 20% chance of losing nothing

Framing Trap

Which production schedule would you choose after hearing that if you continue as you are, all 6,000 units will be lost?

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.

Framing Trap

Plan A sure production loss of 4,000 units

Plan B a one-third chance that 6,000 units can be produced

Framing Trap

“Bird in the hand, worth two in the

bush.”

Critical Thinking

Involves a persistent effort to examine any

belief or supposed form of knowledge in

the light of the evidence that supports it.

Critical Thinking

Gives reasoned consideration to

evidence, to contexts, to conceptualizations,

to methods, and to criteria.

Critical Thinking

Reaches factual or judgmental

conclusions based on sound inferences

drawn from unambiguous statements of

knowledge and belief.

Ten Decision Challenges

1. Plunging In

2. Frame Blindness

3. Lack of Frame Control4. Overconfidence in Your Judgment5. Shortsighted Shortcuts

Ten Decision Challenges

6. Shooting From the Hip

7. Group Failure8. Fooling Yourself About Feedback9. Not Keeping Track

10. Failure to Audit Your Decision Process

Daniel Kahneman

Amos Tversky

Try Their Test

You are at a store in one end

of the mall about to

purchase a calculator for

$25

Would you go down to the other end of the mall to

purchase the same calculator

for $20

Try Their Test

You are at a store in one end

of the mall about to

purchase a computer for

$2000

Would you go down to the other end of the mall to

purchase the same computer

for $1995

Lateral Thinking

Edward Debono

Story of evil money lender, debtor and his

beautiful daughter

Lateral Thinking

Engine

Fuel

Tuned

Intelligence

Knowledge

Thinking

Smart = the integration of all three

The Intelligence Trap

When one is so intelligent

He can justify any quick decision

Decision Making Skills

Identify the Problem

Ask the Key Questions

Develop Alternatives

Build a Consensus

Lead a Supportive Group

Identify the Problem

“A problem well stated is a problem half solved.”

Charles Kettering

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

Identify the Problem

Difference Between

Cause of a Problem

Effect of a Problem

Identify the Problem

Fishbone Analysis

Dr. Kaoru Ishikawa

Identify the Problem

Fishbone Analysis

Is there a Problem?

How Significant is the Problem?

Structural or Attitudinal?

Is there a Solution?

Asking the Right Questions

Will the Solution Solve the Problem?

What are the negative effects?

Negative aspects outweigh the benefits?

Failed to ask Key Question

Did Japanese households have conventional western ovens?

Asking the Key Questions

Develop Alternatives

Two important steps

Ideation

Judgment

Develop Alternatives

Brainstorming

Goal is Quantity

No Criticism

Build on Ideas

Developing Alternatives

“If you only have a hammer, you tend to see every problem as a nail.”

Abraham Maslow

Analyze Alternatives

Appraise Strengths

Appraise Weaknesses

Build a Consensus

at least partially agree

are committed to the decision

Where all Group Members

Build a Consensus

Avoid Arguing for Just your Opinion

Avoid Win/Lose Situations

Seek Differences of Opinion

Use Group Pronouns

Orient Towards Group Goal

Leading a Supportive Group

Every group has a unique personality

Syntality

Leading a Supportive Group

Group strength from effective merging of participants individual energy

Synergy

Leading a Supportive Group

Two Challenges Managing Group Tension

Groupthink

Abilene Paradox

Groupthink

Irving Janis

Korean War Stalemate

Escalation of Vietnam War

Defense of Pearl Harbor

Bay of Pigs Blunder

The Mismanagement of Disagreement

Groupthink

Irving Janis

“The psychological drive for consensus

at any cost that suppresses dissent

and appraisal of alternatives in

cohesive decision-making groups”

Groupthink

“I cannot imagine any condition which would cause a ship to founder”

Edward J. Smith, Captain of the Titanic

Groupthink

Groupthink

Challenger Shuttle

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 consideringthat Iraq might have dismantled its weapons programs. Senate Intelligence Committee July 10

2004

GroupthinkMembers 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.

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

Groupthink

Pressure for Conformity

Self-Censorship

Illusion of Unanimity

Mindguards

Symptoms

Groupthink

Examine Few Alternatives

Not being critical of each other’s ideas

Not examining early alternatives Not seeking expert opinion

Negative Outcomes

Gathering Information Selectively

Not having contingency plans

Groupthink

Refrain from stating preference

Assign a Devil’s Advocate

Seek expert input

Avoiding

Call a “Second Chance Meeting”

Split into Sub-groups

Encourage member’s objections

Groupthink

The Key: Someone with the courage to disagree.

Abilene Paradox

Occurs when a group takes action contrary to the desires of the

members

The Mismanagement of Agreement

and thus, defeats the purpose of the

group.

Abilene Paradox

“Taking the trip to Abilene”

Jerry Harvey

Group Climate

Supportive

Defensive

Two Basic Group Climates

Implement Alternative

There will always be resistance

Implement AlternativeChange 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.

Implement Alternative

Obviously then, one's character and frame of mind determine how one relates to change.

“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

jimmarteney@gmail.com

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Thank you, now go make some quality

decisions.