Decision-Making Fundamentals

 Every decision that we make (or don't

make) shapes our future.

 Everyone tries to make good decisions.

However, it is easy to overlook an important
factor, miss a desirable option, or base the
decision on unreliable information. In
addition, fear of making a wrong choice can
cause us to postpone decisions, leading to
missed opportunities. A structured decision-
making process ensures that important
decisions are made on time and are based
on facts, research, and analysis.
 Components of Decisions
 The most important aspect of structured decision-making
is to recognize and analyze the basic components of
decisions.
 Context - The context describes the situation surrounding
the decision. For example, the deadline and who needs to
be involved to ensure a successful result.
 Objectives - A clear understanding of desired outcomes
guides decision-making and makes it easier, logical, and
less stressful. (People often avoid making decisions
because of a lack of clear objectives.)
 Components of Decisions
 Options - Significant effort must be spent uncovering
all available options, studying how each may be
implemented and what results they will produce. Too
often, people limit themselves to a few obvious
choices, and do not explore unusual (breakthrough)
ideas.
 Criteria - The criteria used to select the best possible
options are determined by the context and
objectives. Hard criteria are conditions which must be
satisfied in order to have a useful decision, such as
budget or time constraints. Soft criteria are
conditions which require subjective assessment, and
therefore can be more difficult to apply. Examples are
level of organizational disruption and employee
satisfaction.
 Components of Decisions
 Options - Significant effort must be spent uncovering
all available options, studying how each may be
implemented and what results they will produce. Too
often, people limit themselves to a few obvious
choices, and do not explore unusual (breakthrough)
ideas.
 Criteria - The criteria used to select the best possible
options are determined by the context and
objectives. Hard criteria are conditions which must be
satisfied in order to have a useful decision, such as
budget or time constraints. Soft criteria are
conditions which require subjective assessment, and
therefore can be more difficult to apply. Examples are
level of organizational disruption and employee
satisfaction.
 Successful decisions are based on reliable information
and verifiable data. Adequate time should be spent to
thoroughly research the options and their
implications. Decisions based on gut-feeling are
difficult to defend and frequently encounter
unexpected obstacles when implemented.
 Decision-making requires time. The time and effort
spent should be in proportion to the importance of
the decision.
 Following a step-by-step decision-making process and
documenting each step, helps to clarify thinking and
ensures sustained progress towards a good, timely
decision
 Decision-Making Process
 An effective decision-making process ensures
that all four components are analyzed.
Templates are used to simplify the work and
remind us of important aspects of each
component. The steps are normally
completed in a sequential manner. However,
it is acceptable to skip ahead and quickly jot
down some information while it is fresh in
one's memory, or to jump back and fill in new
information that was overlooked initially.
 Successful decisions are based on reliable information
and verifiable data. Adequate time should be spent to
thoroughly research the options and their
implications. Decisions based on gut-feeling are
difficult to defend and frequently encounter
unexpected obstacles when implemented.
 Decision-making requires time. The time and effort
spent should be in proportion to the importance of
the decision.
 Following a step-by-step decision-making process and
documenting each step, helps to clarify thinking and
ensures sustained progress towards a good, timely
decision
 Step 1: Determine the importance and the context of the decision
 Use a worksheet to analyze the context. On the worksheet, list the
following:
 By when does the decision need to be made?
 What is the time period for implementation of this decision?
 What will be the outcome in the case of a successful decision? What will be
outcome for a wrong decision? What will be the consequences of not
making a decision?
 Who will be impacted by the decision? Who are the key people that will help
to make the decision successful?
 What type of activities and changes in the environment and behaviors will
be needed?
 If the decision will impact a large number of individuals or entities, what
resources and actions will be needed to manage this impact?
 Can early feedback through polling or other methods help in understanding
the impact on the individuals or entities?
 Who are the key individuals who will need to support the decision with
respect to funding or human resources in order to make it succeed?
 The context determines the possible consequences of the decision, the time
period involved, and who needs to be involved in the decision process.
Significant time and effort should be invested for important decisions.
 Step 2: Determine the objectives for the decision
 Draft an objectives worksheet and list the primary and
secondary goals for the decision. This worksheet should
include the desired outcomes and indicate which outcomes
are to be avoided.
 Step 3: List all options
 Develop an options worksheet by listing all available options.
Use brainstorming or other methods to identify as many
additional options as you can. Make special effort to identify
impossible, wild or unrealistic options, as these may lead to
outstanding 'out of the box' solutions. Find ways to uncover
new options that may not be obvious. To encourage
creativity, all options should be listed without critique.
 Once all available options have been listed, clarify each option
and select the most promising ones for further analysis. (Be
careful not to discard options too early in the process.)
 Step 4: Explore promising options
 The most promising options should be discussed and analyzed to
determine how they may be applied and what results they will
produce. Consider how options relate to one another, and whether
some options have common components or make implementation of
other options easier. In parallel with this analysis, identify options
that need more research or clarification.
 Several techniques are available for analyzing the options in order to
understand their implications.
 Interpretive Structural Modeling or Concept Mapping can be used to
analyze the inter-relationships of the options.
 Implementation analysis can provide a clear view of resource
requirements, people and groups affected, and any cautions to
exercise when implementing the option.
 A SWOT analysis can be used to determine the Strengths,
Weaknesses, Opportunities, and Threats for each option.
 The options are analyzed to gain a clear understanding of their
implications before applying the decision-making criteria. This is to
ensure that options are not discarded prematurely and that an
accurate analysis takes place.
 Step 5: Establish decision-making criteria
 Review your objectives as you develop the set of criteria that will be
used to rate the options. Criteria may be clear conditions, which must
be met in order to have a useful decision, or soft criteria, which
require subjective or qualitative analysis. Assign an importance rating
to each criteria.
 Step 6: Evaluate the options against the criteria
 When options and criteria have been established, a table is drawn
with the options listed in the rows and the criteria listed in the
columns. Each option is rated for each criteria and the value written
in the corresponding cell of the table. Then, each criteria is given a
numerical importance rating. The final matrix is generated by
multiplying each option's rating for a criteria by the criteria's
importance rating. An option's overall evaluation is then determined
by the sum of this weighted rating for all the criteria.
 This Options-Criteria Matrix is particularly useful for evaluating soft
criteria. It is also called a Prioritization Matrix, Screening Matrix or
Decision Matrix.
 Step 7: Select the options to pursue
 Examine the Options and Screening Matrix to determine if
some of the options can be combined to create a better
solution. Summarize the options selected for implementation
and their implications.

 Step 8: Analyze the risks

 All decisions involve an element of risk. Force Field Analysis is
useful for uncovering the risks involved or difficulties which
need to be overcome when implementing the options.
Strategies can then be developed to manage those risks.
 Time Constraints
 Frequently, time constraints require us to make
decisions before we feel that we have all the
information needed. By working through the
decision steps on paper, you will know what
information is missing, the possible consequences of
a wrong decision, and the risks involved if the
decision is postponed. This information permits you
to decide whether to make the decision now,
postpone it, or start implementing some options
while collecting information and feedback to finalize
the decision.
 Conclusion
 Structured decision-making requires analysis of the four
decision components - context, objective, options, &
criteria. The analysis must be based on reliable data. By
following a step-by-step decision-making process and
working on paper, you will have all the information
needed to present and justify your decisions, as well as
to start implementing them.

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