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).

9 comments:

Anonymous said...

What is a good source for examples on eliciting value functions from subject matter experts.

Ernest Forman said...

Tell me more of what you mean by value functions. Are you referring to something like utility curves?

Anonymous said...

Dear Dr. Foreman:
I saw your website recently and came across the following description
“Today’s decisions are complex, combining hard facts with experts’ intuition. Rapid business decision-making often requires collaboration across time zones, organizations and cultural norms. Expert Choice’s software brings the power of proven collaborative decision-making processes and technology to your internal and external teams. With our software you will save time, make better decisions and improve your bottom line results.”
When you say collaborative decision making is this the same as negotiation analysis?

What is the difference between AHP and negotiation analysis (group decisions)

Ernest Forman said...

Not really the same, although it could be applied to negotiation analysis. The main difference is that in negotiations, the parties do not have common objectives, while in organizational decision making, participants share common objectives, although there may be some differences. In negotiation analysis, it is helpful to understand not only your objectives, but those of your adversary as well.

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