The Kaizen

Forum
THE KAIZEN FORUM

DECISION
MAKING
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DECISION MAKING
“A decision is a judgement. It is
a choice between alternatives. It
is rarely a choice between right
and wrong. It is at best a choice
between “almost right” “DRUCKER
and
”
“probably wrong”.
“A manager by
profession is a decision
maker; Uncertainty is his
opponent, overcoming it
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CONCEPTS TO BE COVERED

“When making decisions don’t

get paralysis through
analysis”.

 Limitations of rational decision making model

 Models of decision making.
 Individual vs Group decision making..
 Your individual decision making style?
 Why decision fails?
 Guidelines for decision making.
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DECISION PROCESS
Recognize GATHER
Problem FACTS
GENERATE
1
MAKE
2 DECISION

DEFER
DELEGATE
MATCH

ASSESS RESULT IMPLEMENT

MONITOR
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CONSTRAINTS OF Forum
RATIONAL DECISION MAKING

“I never sit on a fence.Iam

either on one side or another”
Harry Truman
1. PROBLEM
• Seldom consensus as to the definition of the problem.
• Differentiate fact from opinion.
• Identify what standard is violated.

2. GENERATE ALTERNATIVE SOLUTION

• The first acceptable solution is usually accepted.
• Alternatives are based on what was successful in the past.
• Specify alternatives that are consistent with goals
 The Kaizen
CONSTRAINTS OF Forum
RATIONAL DECISION MAKING

3. EVALUATE ALTERNATIVES
• Limited information available about each alternative.
• Satisfactory solutions, not optimal ones, are usually accepted.
• Do not evaluate main effects and side effects.

4. IMPLEMENT AND FOLLOW UP

• Resistance to change is a universal phenomenon.
• Not always clear what part of the solution should be monitored or
measured in follow-up.
 The Kaizen
MODEL OF DECISION MAKING Forum

D E C IS IO N

P R O G R A M M E D N O N P R O G R A M M E D

ON GOING / RULES REQUIRES THINKING UN-

STRUCTURED EMPRICAL STRUCTURED NOT UNIQUE

M O D E L

C L A S S IC A L A D M IN IS T R A T IV E

1. Approach Rational/Objective Satisficing Approach

2. Type Prescriptive (Idealized situation) Descriptive (Reality Based)

3. Knowledge Complete Fragmentary

4. Probability of risk Low High

5. Alternatives available Many Only a few

6. Goals Defined Broad Spectrum

 The Kaizen
MODELS Forum

“The ideal number for a hard

decision-making meeting is
two--- with one on holiday !”
SINGLE
CRISES SPEEDY ACTION COMPLETE
INTUITIVE NOT SH SHARED
RIGID AIMED AT C
TIGHT CONTROL PERFECTION O
SHORT RANGE DEFINED GOALS
N
C
SNAP ANALYTICAL L
MIN INFORMATION MAX
U
PARTICIPATIVE
CREATIVE S
ADAPTIVE
CHANGEABLE
COOPERATIVE I
BROAD GOALS
EXPLOITIVE
TEAM WORK O
SHIFT FOCUS
N

FLEX MULTIPILE CONTINGENCY

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DIFFERENCES
WESTERN JAPANESE

1. Finding an answer. 1. Defining the question.

2. Adhere to group think. 2. Consensus – encourage
dissenting opinions.
3. Focus on alternatives
3. Struggle for the right
answer.
4. Have to sell decision. 4. Process delegates
authority.
5. Take longer time to
5. Always in a hurry to
decide.
decide quickly.
6. Execute with speed
6. Plans run into problem.
 The Kaizen
GROUP THINK Forum
A good CEO will try and anticipate a difficult
problem requiring logical analytical decision
making and set in motion the machinery for
providing necessary information.”
FAULTY DECISION MAKING STYLE WHICH DESIRES
UNANIMITY AT THE EXPENSE OF QUALITY
DECISION
1. CONDITIONS
• Highly cohesive group
• Under pressure to make decision

2. SYMPTOMS
• Not being critical of each other’s ideas.
• Selective in gathering information.
• Believe in group morale.
• Lack of accountability.
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EFFECTIVE GROUP DECISION MAKING

Constructive conflict
Leadership 1. Air legitimate difference
1.Avoid domination. 2.Stay task-related.
2.Encourage input 3.Be impersonal.
3.Avoid groupthink 4.Play devil’s advocate.
And satisficng.
4. Remember goals.
Effective group
Decision making

Creativity
1.Brainstorm
2. Avoid criticizing
3. Exhaust ideas.
4. Combine ideas
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NEMAWASHI! THE TOYOTA WAY

Make decision slowly be

consensus. Thoroughly
1. considering
Thorough Consideration all options.
• Quality Implement
of decision rapidly
• Asking why? 5 times
• Building Consensus

• Deming Cycle (PDCA)

Contd
 The Kaizen
ALTERNATIVE TOYOTA DECISIONForum
MAKING METHODS
Preferred Group
Consensus,
with full
Group authority
Consensus,
Management
Seek Group
Approval
Input, then
Decide and Fallback (if
Seek
Announce consensus not
Level of involvement

Individual Fallback achieved)

Input, then
Decide and
Announce

Decide and
Announce

Time
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NEMAWASHI! THE TOYOTA WAY
2. Considering Alternative Solution
• Follow set based Approach
• Different people-different set of alternatives
• Turn conflict into win / win situation

3. Presenting Decision on one page

• Proposal discussed with all
• Agreement befor presentation
• One page – formal decision only formality
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EXAMPLE OF AN A3 REPORT
CURRENT PLAN
SITUATAION

PROPOSAL IMPLEMENTATION

LABOR COST & TIME

CONTROLS
ANALYSIS

TIME SAVINGS TIME LINE

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DECISION STYLES
High
Analytical Conceptual
Careful decision makers Broad outlook
Adapt to new situation examine
more alternative
long range
Tolerance find creative solution
for
Ambiguity
Directive Behavioral
Efficient,logical
use less information, Work well with others
few alternative Receptive to suggestions
make Avoid conflicts
decision fast
focus on short-term
Rational Intuitive
Low Way of Thinking
Source: Rowe McGrath Modules in Decision
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HOW TO IMPROVE YOUR DECISION MAKING
1. ANALYSE THE SITUATION
2. SHOW FLEXIILITY TO INCREASE ACCEPTABILITY
3. BEWARE OF PERSONAL BIASES
4. DON’T BE AFRAID TO IMPOSE YOUR INTUITION ON TOP OF
RATIONAL ANALYSIS
5. ADAPT TO JOB REQUIREMENT
6. APPLY ETHICAL DECISION GUIDES
7. LATERAL THINKING

SECOND thoughts are invariably wiser.

---Euripides (480-405 B.C)
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WHY DECISIONS FAIL

1. VULNERABILITY OF GROUP-THINK
2. ESCALATION OF COMMITMENT
3. LEVEL OF MORAL DEVELOPMENT
4. CONCEPTUAL BLOCK

PEOPLE who stay in the middle of the road get run over.
--- Aneurin Bevan (1897-1960)
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GUIDE LINES FOR DECISION MAKING

“The responsibility is always

mine but the decision lies with
1. who ever
MARSHAL is on the spot”.
THE FACTS
2. CONSULT YOUR FEELING
3. USE WISE TIMINGS
4. DON’T INFER TOO MUCH
5. KEEP THE DECISION FLEXIBLE
6. FOLLOW THROUGH
7. HAVE COURAGE
8. DECISIONS TO SAVE SKIN, BEWARE OF!