DQ101: Introduction to Decision Quality

DQ 101
Introduction to Decision Quality

DQ

DQ 101
Week 1

Course materials are provided for the personal use by

participants with the understanding that Strategic
Decisions Group International LLC (SDG) retains
exclusive copyright ownership of the materials. No part
of this work may be distributed by the course
participants without the prior written permission of SDG.
DQ 101

2014
by Strategic
Decisions
All reserved.
rights reserved.
2014 by
Strategic
Decisions
Group.Group.
All rights
www.sdg.com

DQ 101
Introduction to Decision Quality

In this session:

DQ

DQ 101

Decision Power
Kinds of Decisions
Two Different Challenges
Course Objectives

2014
by Strategic
Decisions
All reserved.
rights reserved.
2014 by
Strategic
Decisions
Group.Group.
All rights
www.sdg.com

2014 Strategic Decisions Group. All Rights Reserved.

This material is for the personal use of students enrolled in DQ101: Introduction to Decision Quality. No part of this material
may be reproduced, shared, or distributed without written permission from Strategic Decisions Group. www.sdg.com

DQ101: Introduction to Decision Quality

Strategic

Rigorous DQ Process

Few; decided in days, weeks, or months

Deliberative Effort
with DQ as checklist

Significant
Several; decided in hours

On Automatic

Quick
Many; decided in the moment

DQ 101

2014 by Strategic Decisions Group. All rights reserved. www.sdg.com

The challenge to good decision-making is overcoming

organizational and analytical complexities.
High
Facilitative
Leadership

Organizational Complexity

Rigorous DQ
Process

Many parties in conflict

Individual and organizational
differences in:
- Values, desires, and
motivation
- Initial convictions
- Fundamentally
different frames
- Personalities and
competencies
- Degrees of power and
resource availability
Group dynamics
human nature in groups

DQ 101

Focus of this
course

Common
sense &
rules of
thumb

Low

Decision
Analysis

Analytical Complexity

Low

High

Uncertainty
Dynamics; Options
Many interrelated important variables
Many alternatives
Multiple interrelated decision criteria
Multiple players in competitiongaming

2014 by Strategic Decisions Group. All rights reserved. www.sdg.com

2014 Strategic Decisions Group. All Rights Reserved.

This material is for the personal use of students enrolled in DQ101: Introduction to Decision Quality. No part of this material
may be reproduced, shared, or distributed without written permission from Strategic Decisions Group. www.sdg.com

DQ101: Introduction to Decision Quality

Course objectives: Be able to apply

Decision

Outcome

DQ
100%

Invest

EV
Do Not Invest

DQ 101

2014 by Strategic Decisions Group. All rights reserved. www.sdg.com

DQ 101
Introduction to Decision Quality

In this session:

DQ

DQ 101

Course Objectives
and Schedule

2014
by Strategic
Decisions
All reserved.
rights reserved.
2014 by
Strategic
Decisions
Group.Group.
All rights
www.sdg.com

2014 Strategic Decisions Group. All Rights Reserved.

This material is for the personal use of students enrolled in DQ101: Introduction to Decision Quality. No part of this material
may be reproduced, shared, or distributed without written permission from Strategic Decisions Group. www.sdg.com

DQ101: Introduction to Decision Quality

Three Types of Decisions

Rigorous DQ Process

Strategic
Few; decided in days, weeks, or months

Deliberative Effort
with DQ as Checklist

Significant
Several; decided in hours

Quick

On Automatic

Many; decided in the moment

DQ 101

2014 by Strategic Decisions Group. All rights reserved. www.sdg.com

At the end of this course, you will:

Understand:

The Decision Quality framework

The six elements of Decision Quality

DQ

Be able to:

Judge the quality of a significant decision

Assess the gap between the current level

of quality and full DQ

DQ 101

100%

Apply an iterative process to reach DQ for

significant decisions

2014 by Strategic Decisions Group. All rights reserved. www.sdg.com

2014 Strategic Decisions Group. All Rights Reserved.

This material is for the personal use of students enrolled in DQ101: Introduction to Decision Quality. No part of this material
may be reproduced, shared, or distributed without written permission from Strategic Decisions Group. www.sdg.com

DQ101: Introduction to Decision Quality

During the course, we will also make you aware of:

Opportunities to apply DQ to strategic decisions

The role of a decision professional

Selected power tools for reaching DQ

Decision
Hierarchy

Strategy
Table

Decision
Tree
Invest

EV
Do Not Invest

DQ 101

2014 by Strategic Decisions Group. All rights reserved. www.sdg.com

Course Schedule
Week

DQ 101

Topics

Power of decisions
Demonstration: decision-making under uncertainty
Anatomy of a decision
Elements of decision quality
Process of iteration to reach DQ for significant decisions

Appropriate frame
Creative and doable alternatives
Clear values and trade-offs

Relevant and reliable information

Sound reasoning

Commitment to action
Case study: how these concepts were applied to a strategic
decision
Synthesis
2014 by Strategic Decisions Group. All rights reserved. www.sdg.com

2014 Strategic Decisions Group. All Rights Reserved.

This material is for the personal use of students enrolled in DQ101: Introduction to Decision Quality. No part of this material
may be reproduced, shared, or distributed without written permission from Strategic Decisions Group. www.sdg.com

DQ101: Introduction to Decision Quality

DQ 101
Introduction to Decision Quality

In this session:

DQ

Demonstration:
The Fundamentals of
Decision-making Under
Uncertainty

2014
by Strategic
Decisions
All reserved.
rights reserved.
2014 by
Strategic
Decisions
Group.Group.
All rights
www.sdg.com

DQ 101

Decision and Risk Demonstration

DQ 101

You have an opportunity to invest

$20 with an uncertain return.

Your investment will not be returned!

To simulate uncertainty, we will use a deck of four playing cards

consisting of two aces and two kings. We will shuffle the cards, place
them face down, and then draw two cards.

If we draw two aces, you will receive $60.

If we draw an ace and a king, you will receive $30.

If we draw two kings, you will have to pay an additional $18 and
receive nothing. So the worst outcome is a total out-of-pocket loss of
$38.

2014 by Strategic Decisions Group. All rights reserved. www.sdg.com

2014 Strategic Decisions Group. All Rights Reserved.

This material is for the personal use of students enrolled in DQ101: Introduction to Decision Quality. No part of this material
may be reproduced, shared, or distributed without written permission from Strategic Decisions Group. www.sdg.com

DQ101: Introduction to Decision Quality

Drawing a decision tree makes the problem clearer.

Two Aces

Invest
$ 20

Ace and King

$30

Two Kings

$18

Do Not Invest

DQ 101

$ 60

2014 by Strategic Decisions Group. All rights reserved. www.sdg.com

Drawing a probability tree clarifies the chances of

winning.
Second Card
Ace
First Card
Ace
1/2

1/6

1/3

2/3

King

Two Aces: 1/6

1/3
Ace and King: 2/3

Ace

1/3

2/3
1/2

King
1/3

DQ 101

King

1/6

Two Kings: 1/6

2014 by Strategic Decisions Group. All rights reserved. www.sdg.com

2014 Strategic Decisions Group. All Rights Reserved.

This material is for the personal use of students enrolled in DQ101: Introduction to Decision Quality. No part of this material
may be reproduced, shared, or distributed without written permission from Strategic Decisions Group. www.sdg.com

DQ101: Introduction to Decision Quality

Doing the math helps us understand the choice.

Two Aces

EV = 60/6 + 30(2/3) -18/6

= 10 + 20 3
= 27
Invest
$20

$60

1/6

27

2/3

Ace and King

$30

1/6

Two Kings

$18

Do Not Invest

DQ 101

2014 by Strategic Decisions Group. All rights reserved. www.sdg.com

DQ 101
Introduction to Decision Quality

In this session:

DQ

DQ 101

Anatomy of a Decision
Elements of DQ
The DQ Chain

2014
by Strategic
Decisions
All reserved.
rights reserved.
2014 by
Strategic
Decisions
Group.Group.
All rights
www.sdg.com

2014 Strategic Decisions Group. All Rights Reserved.

This material is for the personal use of students enrolled in DQ101: Introduction to Decision Quality. No part of this material
may be reproduced, shared, or distributed without written permission from Strategic Decisions Group. www.sdg.com

DQ101: Introduction to Decision Quality

Decision Reasoning

Information
Two Aces
1/6

Values
$60
-20

Alternatives
Invest
$20

27

2/3

Ace and King

$30
-20

1/6

Two Kings

$18
-20

Do Not Invest

DQ 101

2014 by Strategic Decisions Group. All rights reserved. www.sdg.com

Achieving quality in each of six elements produces

quality in the overall decision.

2.
Creative,
Doable
Alternatives

1.
Appropriate
Frame

3.
Meaningful,
Reliable
Information

Elements of
Decision
Quality

4.
Clear
Values and
Trade-offs

5.
Logically
Correct
Reasoning

6.
Commitment
to Action

Like a chain, overall quality is no stronger than the weakest link.

DQ 101

2014 by Strategic Decisions Group. All rights reserved. www.sdg.com

2014 Strategic Decisions Group. All Rights Reserved.

This material is for the personal use of students enrolled in DQ101: Introduction to Decision Quality. No part of this material
may be reproduced, shared, or distributed without written permission from Strategic Decisions Group. www.sdg.com

DQ101: Introduction to Decision Quality

When it is not worth additional effort or delay to

improve quality, we have reached 100%.
Appropriate Frame

1
0%

50%

Creative, Doable Alternatives

2
0%

50%

100%

Meaningful, Reliable Information

3
0%

50%

100%

Clear Values and Tradeoffs

4
0%

50%

DQ

100%

Logically Correct Reasoning

5
0%

50%

100%

Commitment to Action

6
0%

DQ 101

100%

50%

100%

2014 by Strategic Decisions Group. All rights reserved. www.sdg.com

DQ 101
Introduction to Decision Quality

In this session:

DQ

DQ 101

A Process of Iteration to
Reach DQ

2014
by Strategic
Decisions
All reserved.
rights reserved.
2014 by
Strategic
Decisions
Group.Group.
All rights
www.sdg.com

2014 Strategic Decisions Group. All Rights Reserved.

This material is for the personal use of students enrolled in DQ101: Introduction to Decision Quality. No part of this material
may be reproduced, shared, or distributed without written permission from Strategic Decisions Group. www.sdg.com

DQ101: Introduction to Decision Quality

Measure the quality of each element. The 100% point

for a given situation is where additional work is not
worth the effort.
Appropriate Frame

1
0%

50%

100%

Creative, Doable Alternatives

2
0%

50%

100%

Meaningful, Reliable Information

3
0%

50%

100%

Clear Values and Tradeoffs

4
0%

50%

100%

Logically Correct Reasoning

5
0%

50%

100%

Commitment to Action

6
0%

50%

DQ 101

1
100%

2014 by Strategic Decisions Group. All rights reserved. www.sdg.com

Complete the decision with commitment to effective

execution.
1

Appropriate Frame

Creative, Doable Alternatives

Meaningful, Reliable Information

Clear Values and Tradeoffs

Logically Correct Reasoning

Commitment to Action

Decision

The process aligns people and leaves them ready to act.

DQ 101

2014 by Strategic Decisions Group. All rights reserved. www.sdg.com

2014 Strategic Decisions Group. All Rights Reserved.

This material is for the personal use of students enrolled in DQ101: Introduction to Decision Quality. No part of this material
may be reproduced, shared, or distributed without written permission from Strategic Decisions Group. www.sdg.com