Add value with every decision using a simple yet powerful framework Few things are as valuable in business, and in life, as the ability to make good decisions. Can you imagine how much more rewarding your life and your business would be if every decision you made were the best it could be? Decision Quality empowers you to make the best possible choice and get more of what you truly want from every decision.
Dr. Carl Spetzler is a leader in the field of decision science and has worked with organizations across industries to improve their decision-making capabilities. He and his co-authors, all experienced consultants and educators in this field, show you how to frame a problem or opportunity, create a set of attractive alternatives, identify relevant uncertain information, clarify the values that are important in the decision, apply tools of analysis, and develop buy-in among stakeholders. Their straightforward approach is elegantly simple, yet practical and powerful. It can be applied to all types of decisions.
Our business and our personal lives are marked by a stream of decisions. Some are small. Some are large. Some are life-altering or strategic. How well we make those decisions truly matters. This book gives you a framework and thinking tools that will help you to improve the odds of getting more of what you value from every choice. You will learn:
- The six requirements for decision quality, and how to apply them
- The difference between a good decision and a good outcome
- Why a decision can only be as good as the best of the available alternatives
- Methods for making both "significant" and strategic decisions
- The mental traps that undermine decision quality and how to avoid them
- How to deal with uncertainty—a factor in every important choice
- How to judge the quality of a decision at the time you're making it
- How organizations have benefited from building quality into their decisions.
Many people are satisfied with 'good enough' when making important decisions. This book provides a method that will take you and your co-workers beyond 'good enough' to true Decision Quality.
Table of Contents:
Acknowledgments xiii
Preface xv
Part I The Decision Quality Framework 1
1 The Power of Decisions 3
Decision Quality: A Framework for Better Decisions 4
Decision Skills Can Be Learned 5
Decisions versus Outcomes 6
Key Points to Remember 8
Endnotes 9
2 The Requirements for Decision Quality 11
The Appropriate Frame 13
Creative Alternatives 13
Relevant and Reliable Information 14
Clear Values and Tradeoffs 15
Sound Reasoning 16
Commitment to Action 16
Judging the Quality of a Decision 17
Key Points to Remember 19
Endnotes 19
3 Getting to Decision Quality 21
Declaring the Need for a Decision 21
Setting the Decision Agenda 23
Understanding the Destination of Decision Quality 23
Avoiding Decision Traps and Biases 24
Designing the Decision Process through Diagnosis 25
Tailoring to Fit the Decision 30
Key Points to Remember 32
Endnotes 33
Part II The Six Requirements for DQ 35
4 The Appropriate Frame 37
A Friday Afternoon Dilemma 37
The Key Components of a Frame 39
Framing the Friday Afternoon Dilemma 41
An Extended Example: The House Decision 42
Developing an Appropriate Frame 43
The Decision Hierarchy: A Tool for Framing 44
Things That Can Go Wrong 46
Judging the Quality of a Decision Frame 47
Key Points to Remember 49
Endnotes 49
5 Creative Alternatives 51
Characteristics of Good Alternatives 53
The Strategy Table: A Tool for Defining Alternatives 56
Things That Can Go Wrong 57
Judging the Quality of Alternatives 60
Key Points to Remember 63
Endnotes 64
6 Relevant and Reliable Information 65
Information from a Decision Perspective 65
An Extended Example: Michael’s Job Choice 67
Structuring the Relevant Information in a Decision 68
The Decision Tree: A Tool for Structuring a Decision 68
What is Reliable? 72
Things That Can Go Wrong 74
Judging the Quality of Information 75
Key Points to Remember 78
Endnotes 79
7 Clear Values and Tradeoffs 81
Values and Tradeoffs for Decisions 82
Michael’s Values and Tradeoffs 82
Values in a Business Context 85
Making Tradeoffs in Business Decisions 86
Things That Can Go Wrong 88
Judging the Quality of Values 89
Key Points to Remember 91
Endnotes 91
8 Sound Reasoning 93
Reasoning for Michael’s Job Decision 94
Reasoning in More Complex Decisions 97
The Relevance Diagram: A Tool for Structuring Complex Decisions 97
The Decision Model: A Tool for Analyzing Complex Decisions 98
The Tornado Diagram: A Tool for Displaying the Relevance of Information 99
Flying Bars: A Tool for Displaying Overall Uncertainty 102
Things That Can Go Wrong 103
When to Get Help with Reasoning 104
The Power of Iterating from a Simple Start 105
Judging the Quality of Reasoning 105
Key Points to Remember 109
Endnotes 110
9 Commitment to Action 111
Two Mindsets: Decision and Action 111
Commitment through Participation and Ownership 113
Conscious Commitment 115
Things That Can Go Wrong 115
Judging the Quality of Commitment to Action 117
Key Points to Remember 119
Part III How to Achieve DQ 121
10 Biases and Traps in Decision Making 123
Mechanisms of the Mind 123
Protection of Mindset 126
Personality and Habits 128
Faulty Reasoning 130
Automatic Associations and Relative Thinking 133
Social Influences 137
Summing Up 138
Endnotes 139
11 Megabiases that Undermine DQ 143
DQ and Megabiases 144
Megabias #1: Narrow Framing 144
Megabias #2: The Illusion of DQ 147
Megabias #3: The Agreement Trap 149
Megabias #4: The Comfort Zone Megabias 150
Megabias #5: The Advocacy/Approval Myth 152
General Guidelines for Avoiding Megabiases 154
Endnotes 154
12 Achieving Quality in Strategic Decisions 157
The Dialogue Decision Process 158
Four Phases of Dialogue 161
Every Decision Situation is Different 163
Advantages of the DDP 164
13 Achieving Quality in Significant Decisions 169
The DQ Appraisal Cycle: Iterating Our Way to DQ 170
The DQ Appraisal Cycle in Action: Robin’s Career Crossroads 176
Summing Up 187
Part IV The Journey to DQ 189
14 The Amoco Unleaded Gasoline Decision 191
Getting Started on the Unleaded Decision 194
Seeking Greater Clarity on the Key Uncertainty 196
Competing Reports 198
The Bottom Line 201
Decades of Experience in Improving Value 202
Endnote 203
15 Building Organizational Decision Quality 205
Organizational DQ 207
The Components of ODQ 207
Reaching ODQ 209
Chevron’s Journey to ODQ 212
Taking the First Step 213
Endnote 214
16 Embarking on the DQ Journey 215
What Next? 216
References 219
About the Authors 223
Index 225
