baxter decision making
DESCRIPTION
This presentation was made to the management for Baxter Corporation for their yearly international meeting.TRANSCRIPT
Population of Turkey
Greater or Less Than
35,000,000
Population of Turkey
78,785,548
Mental Trap
Unconscious mental routine that leads us to make poor decisions
Anchoring Trap
Mind gives disproportionate weight to the first information it receives.
Initial impressions, estimates, or data anchor subsequent thoughts and judgments.
Status Quo Trap
We instinctively stay with what seems familiar.
People want to avoid, “rocking the boat”
We look for decisions that involve the least change
More alternatives, stronger status quo
Sins of commision punished more than sins of omission
Justify Past Actions Trap
more invested in the past, more difficult to change
Don’t cultivate a fear of failure
culture
Framing Trap
The way a problem is worded or “framed” can profoundly influence the choices one
makes
Framing TrapPeople are:
risk averse when a problem is posed in terms of gains
risk seeking when a problem is posed in terms of avoiding losses
Framing TrapWhich would you choose?
A sure gain of $3,000
80% chance of winning $4,000 and a 20% chance of winning nothing
Framing TrapWhich would you choose?
A sure loss of $3,000
80% chance of losing $4,000 and a 20% chance of losing nothing
Framing Trap
Which production schedule would you choose after hearing that if you continue as you are, all 6,000 units will be lost?
Framing Trap
Plan A sure production of 2,000 units
Plan B a one-third chance that 6,000 units can be produced, two-thirds that no units can be produced.
Framing Trap
Plan A sure production loss of 4,000 units
Plan B a one-third chance that 6,000 units can be produced
Framing Trap
“Bird in the hand, worth two in the
bush.”
Critical Thinking
Involves a persistent effort to examine any
belief or supposed form of knowledge in
the light of the evidence that supports it.
Critical Thinking
Gives reasoned consideration to
evidence, to contexts, to conceptualizations,
to methods, and to criteria.
Critical Thinking
Reaches factual or judgmental
conclusions based on sound inferences
drawn from unambiguous statements of
knowledge and belief.
Ten Decision Challenges
1. Plunging In
2. Frame Blindness
3. Lack of Frame Control4. Overconfidence in Your Judgment5. Shortsighted Shortcuts
Ten Decision Challenges
6. Shooting From the Hip
7. Group Failure8. Fooling Yourself About Feedback9. Not Keeping Track
10. Failure to Audit Your Decision Process
Daniel Kahneman
Amos Tversky
Try Their Test
You are at a store in one end
of the mall about to
purchase a calculator for
$25
Would you go down to the other end of the mall to
purchase the same calculator
for $20
Try Their Test
You are at a store in one end
of the mall about to
purchase a computer for
$2000
Would you go down to the other end of the mall to
purchase the same computer
for $1995
Lateral Thinking
Edward Debono
Story of evil money lender, debtor and his
beautiful daughter
Lateral Thinking
Engine
Fuel
Tuned
Intelligence
Knowledge
Thinking
Smart = the integration of all three
The Intelligence Trap
When one is so intelligent
He can justify any quick decision
Decision Making Skills
Identify the Problem
Ask the Key Questions
Develop Alternatives
Build a Consensus
Lead a Supportive Group
Identify the Problem
“A problem well stated is a problem half solved.”
Charles Kettering
Identify the Problem
“If I had only one hour to save the world I
would spend fifty-five minutes defining the
problem and only five minutes finding the
solution.”
Albert Einstein
Identify the Problem
Difference Between
Cause of a Problem
Effect of a Problem
Identify the Problem
Fishbone Analysis
Dr. Kaoru Ishikawa
Identify the Problem
Fishbone Analysis
Is there a Problem?
How Significant is the Problem?
Structural or Attitudinal?
Is there a Solution?
Asking the Right Questions
Will the Solution Solve the Problem?
What are the negative effects?
Negative aspects outweigh the benefits?
Failed to ask Key Question
Did Japanese households have conventional western ovens?
Asking the Key Questions
Develop Alternatives
Two important steps
Ideation
Judgment
Develop Alternatives
Brainstorming
Goal is Quantity
No Criticism
Build on Ideas
Developing Alternatives
“If you only have a hammer, you tend to see every problem as a nail.”
Abraham Maslow
Analyze Alternatives
Appraise Strengths
Appraise Weaknesses
Build a Consensus
at least partially agree
are committed to the decision
Where all Group Members
Build a Consensus
Avoid Arguing for Just your Opinion
Avoid Win/Lose Situations
Seek Differences of Opinion
Use Group Pronouns
Orient Towards Group Goal
Leading a Supportive Group
Every group has a unique personality
Syntality
Leading a Supportive Group
Group strength from effective merging of participants individual energy
Synergy
Leading a Supportive Group
Two Challenges Managing Group Tension
Groupthink
Abilene Paradox
Groupthink
Irving Janis
Korean War Stalemate
Escalation of Vietnam War
Defense of Pearl Harbor
Bay of Pigs Blunder
The Mismanagement of Disagreement
Groupthink
Irving Janis
“The psychological drive for consensus
at any cost that suppresses dissent
and appraisal of alternatives in
cohesive decision-making groups”
Groupthink
“I cannot imagine any condition which would cause a ship to founder”
Edward J. Smith, Captain of the Titanic
Groupthink
Groupthink
Challenger Shuttle
Groupthink
According to a scathing report released by the Senate Intelligence Committee, the United States went to war with Iraq on the basis of flawed intelligence assessments.
The CIA analysts suffered a case of Groupthink that rendered them incapable of consideringthat Iraq might have dismantled its weapons programs. Senate Intelligence Committee July 10
2004
GroupthinkMembers avoid being too harsh in their judgments of their leader’s or their colleagues’ ideas.
They adopt a soft line of criticism, even in their own thinking.
Groupthink
At their meetings, all the members are amiable and seek complete concurrence on every important issue, with no bickering or conflict to spoil the cozy, “we-feeling” atmosphere.
----Psychology Today
Groupthink
Pressure for Conformity
Self-Censorship
Illusion of Unanimity
Mindguards
Symptoms
Groupthink
Examine Few Alternatives
Not being critical of each other’s ideas
Not examining early alternatives Not seeking expert opinion
Negative Outcomes
Gathering Information Selectively
Not having contingency plans
Groupthink
Refrain from stating preference
Assign a Devil’s Advocate
Seek expert input
Avoiding
Call a “Second Chance Meeting”
Split into Sub-groups
Encourage member’s objections
Groupthink
The Key: Someone with the courage to disagree.
Abilene Paradox
Occurs when a group takes action contrary to the desires of the
members
The Mismanagement of Agreement
and thus, defeats the purpose of the
group.
Abilene Paradox
“Taking the trip to Abilene”
Jerry Harvey
Group Climate
Supportive
Defensive
Two Basic Group Climates
Implement Alternative
There will always be resistance
Implement AlternativeChange has considerable impact on the human mind.
To the fearful, it is threatening because it means things may get worse.
To the hopeful, it is encouraging because things may get better.
To the confident, it is inspiring because the challenge exists to make things better.
Implement Alternative
Obviously then, one's character and frame of mind determine how one relates to change.
“When you assemble a number of (people) to have advantage of their joint wisdom, you assemble with those (people), all their
Prejudices, their passions, their errors of opinion, their local interest, and their selfish views.
From such an assembly can a perfect production be expected?” Ben Franklin Constitutional Convention September 15, 1787
Thank you, now go make some quality
decisions.