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Decision Quality: Value Creation from Better Business Decisions

Decision Quality: Value Creation from Better Business Decisions

Carl Spetzler, Hannah Winter, Jennifer Meyer

ISBN: 978-1-119-14469-4

Feb 2016

256 pages

$19.99

Description

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.

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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