“In God We Trust, Everyone Else Bring Data”, read the sign outside the office of one of the Dell executives with whom I worked. His mantra was reasonable and compelling as data-driven decision-making is a sound business practice. Over the years, however, I have found that living by this creed can be at times productive and counter-productive. So how could data-driven decision-making be counter-productive? Simple: when you do not have the data.
In the "limited” or “bad data" environment, where we find ourselves from time to time, managers who live by the “we must have data!” motto are crippled by their inability to make decisions. Have you ever heard the statement, "We can't make that decision until we have all the data?" If you have the luxury of putting off or not making a decision, then wait. However, business needs or competitive pressures often require that we make a decision regardless.
What should you do in this situation? I recommend that you enlist the most knowledgeable team members about the decision and walk them through a structured process of soliciting, debating and synthesizing their judgments. You've made an investment in these team members for their knowledge and experience; it’s time to get a return on that investment! You will find in the absence of data, your knowledgeable team members inform your decisions far better than you think. Ultimately, as my current colleague reminds me, “Not Making a Decision is a Decision to do Nothing”.
Wednesday, September 12, 2007
Tuesday, July 17, 2007
Analysis vs. Synthesis or Analysis and Synthesis
There are a multitude of courses at many Universities with the word analysis in the title but relatively few courses with the word synthesis. Many Universities have a course called Decision Analysis but I don’t know of any having a course called Decision Synthesis.
When someone tries to explain how they came to a decision, they often say something like “After a careful analysis, …”
The truth is that while analysis is an important part of decision making, analysis without synthesis is almost worthless. The converse is also true.
Dictionaries define analysis as something like the following: the separating of any material or abstract entity into its constituent elements (opposed to synthesis)
Dictionaries define synthesis as something like the following:
The combining of the constituent elements of separate material or abstract entities into a single or unified entity (opposed to analysis).
So while dictionaries define analysis and synthesis as opposites of one another, when it comes to decision making they are necessary complements of one another.
Most organizations have top level managers, mid level managers, supervisory managers, technicians and other experts, each capable of doing an analysis on one or more facets of a complex decision. However, few organizations know how to perform a synthesis of these analyses. In order for an organization to make a rational decision—that is a decision that best achieves the multitude of their objectives, they must be able to synthesize as well as analyze.
When someone tries to explain how they came to a decision, they often say something like “After a careful analysis, …”
The truth is that while analysis is an important part of decision making, analysis without synthesis is almost worthless. The converse is also true.
Dictionaries define analysis as something like the following: the separating of any material or abstract entity into its constituent elements (opposed to synthesis)
Dictionaries define synthesis as something like the following:
The combining of the constituent elements of separate material or abstract entities into a single or unified entity (opposed to analysis).
So while dictionaries define analysis and synthesis as opposites of one another, when it comes to decision making they are necessary complements of one another.
Most organizations have top level managers, mid level managers, supervisory managers, technicians and other experts, each capable of doing an analysis on one or more facets of a complex decision. However, few organizations know how to perform a synthesis of these analyses. In order for an organization to make a rational decision—that is a decision that best achieves the multitude of their objectives, they must be able to synthesize as well as analyze.
Monday, July 16, 2007
Synthesizing data, information and knowledge in decision-making
Decision-making today is more complex than ever. If you read Barry Schwartz’s excellent book The Paradox of Choice: Why More is Less you will see why – we are faced with more options than we know what to do with. The overwhelming-ness of the options strains our mental capacity and adds stress to our lives, especially if we do not have a good way of managing the decision challenge at hand.
When I was a child my father would tell me, “You are fortunate, son, you have more options now than I could ever dream of at your age.” While grateful, I realize it is more challenging today to make sense of the options, especially when making organizational decisions with multiple stakeholders, conflicting objectives and lots of facts and figures to consider. We need a way to understand our options and objectives clearly, and a way to synthesize disparate data, information and knowledge in the process.
Understanding the pecking order of knowledge is interesting. While there are many definitions, the following should suffice:
Thus knowledge is information in action, and information is meaningfully organized data.
We typically encounter knowledge through conversation with others, where people share their learning and communicate their expertise. This practice of knowledge sharing is crucial to the process of decision-making. Since none of us is all-knowing, we require collaboration, discussion, and debate to understand the decision at hand from different perspectives.
Traditional decision facilitation techniques seek to bring a group together, have a dialogue, and reach (or force!) an outcome for the entire group, which is then loosely called a “consensus.” While some level of agreement may have been reached, this process fails to clearly consider and document the different stakeholder perspectives and has no way to meaningfully synthesize disparate sources of data and information. This technique may be useful for simple decisions, but would be inadequate for important decisions where significant resources are involved, or the fates of individuals or businesses may be affected.
A better facilitation technique synthesizes and documents each stakeholder’s perspective and expertise, and combines it with relevant quantitative data and other information. The Analytic Hierarchy Process (AHP) is one of the best ways to accomplish this task as it is expressly designed to manage such complexity. While its title emphasizes analysis, perhaps the AHP’s greatest strength is synthesis. The AHP effectively synthesizes the separate elements of a decision – the data, information and knowledge – into a meaningful whole that makes sense of your decision and provides you and your team with the best outcome.
When I was a child my father would tell me, “You are fortunate, son, you have more options now than I could ever dream of at your age.” While grateful, I realize it is more challenging today to make sense of the options, especially when making organizational decisions with multiple stakeholders, conflicting objectives and lots of facts and figures to consider. We need a way to understand our options and objectives clearly, and a way to synthesize disparate data, information and knowledge in the process.
Understanding the pecking order of knowledge is interesting. While there are many definitions, the following should suffice:
- Data are individual facts, statistics, or pieces of information that in-and-of-themselves are not that useful
- Information is a collection of data that has somehow been organized and has the potential to be useful; information has context and can convey meaning
- Knowledge is information that has been processed, assimilated, tested and/or validated, and has been made actionable
Thus knowledge is information in action, and information is meaningfully organized data.
We typically encounter knowledge through conversation with others, where people share their learning and communicate their expertise. This practice of knowledge sharing is crucial to the process of decision-making. Since none of us is all-knowing, we require collaboration, discussion, and debate to understand the decision at hand from different perspectives.
Traditional decision facilitation techniques seek to bring a group together, have a dialogue, and reach (or force!) an outcome for the entire group, which is then loosely called a “consensus.” While some level of agreement may have been reached, this process fails to clearly consider and document the different stakeholder perspectives and has no way to meaningfully synthesize disparate sources of data and information. This technique may be useful for simple decisions, but would be inadequate for important decisions where significant resources are involved, or the fates of individuals or businesses may be affected.
A better facilitation technique synthesizes and documents each stakeholder’s perspective and expertise, and combines it with relevant quantitative data and other information. The Analytic Hierarchy Process (AHP) is one of the best ways to accomplish this task as it is expressly designed to manage such complexity. While its title emphasizes analysis, perhaps the AHP’s greatest strength is synthesis. The AHP effectively synthesizes the separate elements of a decision – the data, information and knowledge – into a meaningful whole that makes sense of your decision and provides you and your team with the best outcome.
Monday, June 25, 2007
Why Include Them Anyway? Leadership and Decision Making
Faced with an important decision managers can chose to actively include their teams in the decision making process, or not. Now most managers will tell you that they do actively involve their teams in helping them make decisions that affect their teams. I’ve found however, that most managers are not comfortable with truly “opening up” their decision making process. Why, you ask? After talking with hundreds of business and government executives, I’ve most often heard the following reasons from managers for not being comfortable with, as they say, “democratizing” the decision making process:
- “Decision making is my job. I am the leader and this is my responsibility.”
- “I’ve risen to my management position because of my good decision-making ability, so I don’t think that I necessarily need help with decision making.”
- “I don’t want to lose control of the decision.”
While these reasons are very real and perhaps reasonable in some situations, let me share with you the combined experience of those leaders whom I’ve worked with and who have actively engaged their teams in their decision making processes. First, however, let me describe what I mean by “actively engaging” team members in decision making. In short, actively engaging a team means working together to identify decision objectives and alternatives and collaboratively prioritizing those objectives and evaluating the alternatives. And by “collaboratively” I mean giving each stakeholder an explicit and measured voice in the process.
When leaders actively engage their teams as described here, the following occurs:
- Team members and their organizations more rapidly become aware of the leader’s objectives. The leader’s objectives are no longer a mystery to the team and accordingly, new business proposals start reflecting the leader’s objectives. Imagine that!
- The quality of decisions improves as the information, knowledge and experience of the team members becomes much more a part of the decision. The leader has invested in his or her team, so why not get a return on investment by leveraging the team’s collective expertise in helping the leader make decisions.
- The team’s buy-in to the decisions is unparalleled and the leader’s ability to guide his or her team and the organization through the changes associated with the decision is dramatically improved.
Folks, the days of command and control leadership in the workplace are over. True leaders, or truly effective leaders are those who set the vision, effectively communicate their vision and objectives, and who can empower their teams to achieve their objectives. At the end of the day the buck stops with the leader, and he or she is on the hook to make the right decision, but if you as the leader or if your manager chooses to “open up” the decision making process, be prepared to reap the rewards that true leadership brings.
Monday, June 18, 2007
Conflicts in Decision Making
Conflict in decision making can lead to worry, headaches, sleeplessness, arguments, confrontations, litigation and separation. Do you ever feel a headache coming on or wake up in the middle of the night fretting about a decision? This can be due to one type of conflict that occurs in decision making – conflicting alternatives or choices. On the one hand, you think you should choose the left fork in the road. On the other hand, the right fork seems to be better.
While it is typical for people focus on conflicting alternatives, e.g. between the left and right forks in the road, focusing on another type of conflict – conflicting objectives – is by far more productive. While the left fork might lead you to a road that is smoother than the right fork, the right fork might lead you to a road that is more scenic. The more important or ‘crucial’ a decision, the more important it is to focus on objectives rather than alternatives. And the greater the number of conflicting objectives, the more complexity, confusion, headaches, and so on.
There is a plethora of advice on how to address conflict when making decisions. Of course, any advice can be misapplied, or applied foolishly, as is humorously illustrated in http://www.advancedselling.com/articles/benfails.html where the counting of pros and cons leads to an obviously illogical conclusion. The author correctly concludes that “it isn't the QUANTITY of reasons that will make people act (or hesitate), but the QUALITY of those reasons”. I’m amused at some of the TV commercials that try to convince us to buy a particular make of car because it has more cup holders and gadgets while not saying anything about reliability.
Dale Carnegie, author of How to Win Friends and Influence People, also wrote How to Stop Worrying and Start Living (http://www.westegg.com/unmaintained/carnegie/stop-worry.html) in which he advised “After carefully weighing all the facts, come to a decision.” While Carnegie advised us on how to stop worrying, he didn’t say much about how to ‘weigh’ the facts.
Because weighing the facts is not as easy as one might expect, it is not uncommon for people to resort to counting instead of ‘measuring’. While it should be eminently clear that counting is not adequate and potentially dangerous when making decisions involving conflicting alternatives and objectives, it is done often enough to persuade some people that making decisions using anything but ‘gut feeling’ is dangerous. The danger, however, is in measuring the wrong way, not in trying to measure.
There are four levels of measurement: nominal, ordinal, interval, and ratio. This classification is the most widely adopted classification in use today. Each level has more meaning than the prior level. A minimum of interval or ratio level measure is required for certain operations, such as averaging, to be mathematically meaningful. Ratio level measures are required in order to multiply ‘weights’, such is in a decision hierarchy of objectives, and to maintain proportion when making resource allocation decisions. Not only did the question of how to obtain ratio level measures remain, but also how to can they be obtained for qualitative objectives that are subjective?
L. L. Thurston advanced our ability to measure by proposing a process in which comparisons are made between pairs of entities with respect to some attribute, trait or attitude (http://en.wikipedia.org/wiki/Law_of_comparative_judgment).
Thomas Saaty incorporated relative pairwise comparisons along with eigenvector methods to calculate weights or priorities in what he called the Analytic Hierarchy Process (http://en.wikipedia.org/wiki/Analytic_Hierarchy_Process). Not only did AHP advance our ability to measure, it recognized that measures for aspects of a decision that were thought to be non-measurable can and must be included in making decisions and provided an intuitive way to structure complex decisions as a hierarchy. In the early 1980’s, I worked with Saaty and developed the first and most widely used implementations of AHP, Expert Choice (http://expertchoice.com/). I also co-authored a book with Mary Ann Selly called Decision by Objectives (http://www.amazon.com/Decision-Objectives-Ernest-H-Forman/dp/9810241437) which is a fairly easy read..
Now the question, is it worth changing your personal or group decision process by employing some of the techniques cited above? The conflict here is between the easy path of continuing what you are doing – which in many cases has been very successful, versus trying something new – which might relieve some of the headaches and make you even more successful, but typically requires an investment of time and persuasion, particularly if you are deciding along with others.
Going against the conventional wisdom can be very rewarding. When the conventional wisdom was that the earth was flat, sailors weren’t put at risk trying to explore new worlds. But countries that challenged the conventional wisdom were rewarded handsomely.
However, going against the conventional wisdom can also be very challenging and frustrating. The phrase conventional wisdom itself was coined in 1958 by the legendary economist John Kenneth Galbraith when he said ““…men react, not infrequently with something akin to religious passion, to the defense of what they have so laboriously learned.” http://en.wikipedia.org/wiki/Conventional_wisdom Instead of believing what we see, we often see what we believe.http://sportsmediareview.typepad.com/sports_media_review/2006/11/the_wages_of_wi.html
There are those who still believe that the earth is flat (See: World Flat Earth Society http://en.wikipedia.org/wiki/Flat_Earth_Society, http://www.alaska.net/~clund/e_djublonskopf/Flatearthsociety.htm).
You can, of course, continue to make decisions as you do now, and catch up when the conventional wisdom that important decisions are best made with gut feeling changes. You can, with the help of today’s technology, employ best practices, such as AHP for making difficult choices and allocating resources. Or you can institute small changes to convince your colleagues that there is a better way than the decision making analog to the flat earth society – the BOGGSAT (bunch of old guys and gals sitting around talking).
While it is typical for people focus on conflicting alternatives, e.g. between the left and right forks in the road, focusing on another type of conflict – conflicting objectives – is by far more productive. While the left fork might lead you to a road that is smoother than the right fork, the right fork might lead you to a road that is more scenic. The more important or ‘crucial’ a decision, the more important it is to focus on objectives rather than alternatives. And the greater the number of conflicting objectives, the more complexity, confusion, headaches, and so on.
There is a plethora of advice on how to address conflict when making decisions. Of course, any advice can be misapplied, or applied foolishly, as is humorously illustrated in http://www.advancedselling.com/articles/benfails.html where the counting of pros and cons leads to an obviously illogical conclusion. The author correctly concludes that “it isn't the QUANTITY of reasons that will make people act (or hesitate), but the QUALITY of those reasons”. I’m amused at some of the TV commercials that try to convince us to buy a particular make of car because it has more cup holders and gadgets while not saying anything about reliability.
Dale Carnegie, author of How to Win Friends and Influence People, also wrote How to Stop Worrying and Start Living (http://www.westegg.com/unmaintained/carnegie/stop-worry.html) in which he advised “After carefully weighing all the facts, come to a decision.” While Carnegie advised us on how to stop worrying, he didn’t say much about how to ‘weigh’ the facts.
Because weighing the facts is not as easy as one might expect, it is not uncommon for people to resort to counting instead of ‘measuring’. While it should be eminently clear that counting is not adequate and potentially dangerous when making decisions involving conflicting alternatives and objectives, it is done often enough to persuade some people that making decisions using anything but ‘gut feeling’ is dangerous. The danger, however, is in measuring the wrong way, not in trying to measure.
There are four levels of measurement: nominal, ordinal, interval, and ratio. This classification is the most widely adopted classification in use today. Each level has more meaning than the prior level. A minimum of interval or ratio level measure is required for certain operations, such as averaging, to be mathematically meaningful. Ratio level measures are required in order to multiply ‘weights’, such is in a decision hierarchy of objectives, and to maintain proportion when making resource allocation decisions. Not only did the question of how to obtain ratio level measures remain, but also how to can they be obtained for qualitative objectives that are subjective?
L. L. Thurston advanced our ability to measure by proposing a process in which comparisons are made between pairs of entities with respect to some attribute, trait or attitude (http://en.wikipedia.org/wiki/Law_of_comparative_judgment).
Thomas Saaty incorporated relative pairwise comparisons along with eigenvector methods to calculate weights or priorities in what he called the Analytic Hierarchy Process (http://en.wikipedia.org/wiki/Analytic_Hierarchy_Process). Not only did AHP advance our ability to measure, it recognized that measures for aspects of a decision that were thought to be non-measurable can and must be included in making decisions and provided an intuitive way to structure complex decisions as a hierarchy. In the early 1980’s, I worked with Saaty and developed the first and most widely used implementations of AHP, Expert Choice (http://expertchoice.com/). I also co-authored a book with Mary Ann Selly called Decision by Objectives (http://www.amazon.com/Decision-Objectives-Ernest-H-Forman/dp/9810241437) which is a fairly easy read..
Now the question, is it worth changing your personal or group decision process by employing some of the techniques cited above? The conflict here is between the easy path of continuing what you are doing – which in many cases has been very successful, versus trying something new – which might relieve some of the headaches and make you even more successful, but typically requires an investment of time and persuasion, particularly if you are deciding along with others.
Going against the conventional wisdom can be very rewarding. When the conventional wisdom was that the earth was flat, sailors weren’t put at risk trying to explore new worlds. But countries that challenged the conventional wisdom were rewarded handsomely.
However, going against the conventional wisdom can also be very challenging and frustrating. The phrase conventional wisdom itself was coined in 1958 by the legendary economist John Kenneth Galbraith when he said ““…men react, not infrequently with something akin to religious passion, to the defense of what they have so laboriously learned.” http://en.wikipedia.org/wiki/Conventional_wisdom Instead of believing what we see, we often see what we believe.http://sportsmediareview.typepad.com/sports_media_review/2006/11/the_wages_of_wi.html
There are those who still believe that the earth is flat (See: World Flat Earth Society http://en.wikipedia.org/wiki/Flat_Earth_Society, http://www.alaska.net/~clund/e_djublonskopf/Flatearthsociety.htm).
You can, of course, continue to make decisions as you do now, and catch up when the conventional wisdom that important decisions are best made with gut feeling changes. You can, with the help of today’s technology, employ best practices, such as AHP for making difficult choices and allocating resources. Or you can institute small changes to convince your colleagues that there is a better way than the decision making analog to the flat earth society – the BOGGSAT (bunch of old guys and gals sitting around talking).
Monday, May 21, 2007
Alignment. Buy-in. Confidence.
Whether you are working on your organization’s annual planning and budgeting exercise or analyzing which component should go into the next fighter jet, Expert Choice can help you simplify your decision process.
Both of these decisions entail too many variables – including competing objectives, uncertainty, limited resources, and multiple stakeholders – for one person to manage. Based on the Analytic Hierarchy Process (AHP), Expert Choice software provides a structured approach and proven process for prioritization and decision-making. Expert Choice not only helps decision-makers arrive at the best decision, but also provides a clear rationale for that decision.
Our solutions are designed for business and government leaders who want to save time and improve their bottom lines by:
Both of these decisions entail too many variables – including competing objectives, uncertainty, limited resources, and multiple stakeholders – for one person to manage. Based on the Analytic Hierarchy Process (AHP), Expert Choice software provides a structured approach and proven process for prioritization and decision-making. Expert Choice not only helps decision-makers arrive at the best decision, but also provides a clear rationale for that decision.
Our solutions are designed for business and government leaders who want to save time and improve their bottom lines by:
- Implementing a structured, repeatable and justifiable decision-making approach
- Aligning their decisions with their organizational objectives
- Leveraging organizational expertise
- Improving top-down and bottom-up communication
- Building concensus
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