Decision Making

A Skill We Can Improve

Jim Marteney

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

Initial impressions, estimates, or data anchor subsequent thoughts and judgments.

Anchoring Trap

Mind gives disproportionate weight to the first information it receives.

Status Quo Trap

We instinctively stay with what seems familiar.

Status Quo Trap

We look for decisions that involve the least change

Status Quo Trap

More alternatives, stronger status quo

Status Quo Trap

People want to avoid, “rocking the boat”

Status Quo Trap

Sins of commission 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

“Bird in the hand, worth two in the

bush.”

Decision Making

How much is influenced by

actual thought?

Two Types of Decisions

Voluntary Decision Making

Involuntary Decision Making

The Critical Thinker

One who refuses to complacently accept conclusions, one who

analyzes and evaluates eviencd in order to distinguish

strong reasoning

unlike the uncritical thinker who accepts or

rejects conclusions, often on the basis of

egocentric attachment or unassessed bias.

The Critical Thinker

Daniel Kahneman

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

We Don’t Notice Everything

Lateral Thinking

Edward de Bono

Lateral Thinking

Story of evil money lender, debtor and his

beautiful daughter

Lateral Thinking

Engine

Fuel

Tuned

Intelligence

Knowledge

Thinking

Smart = the integration of all three

Identify the Problem

“A problem well stated is a problem half solved.”

Charles Kettering

Identify the Problem

“The only difference between a problem and a solution is that people understand the solution.”

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

Making a Decision

Gut Feeling

Positive, Negative, Interesting

Cost/Benefit Analysis

Gut Feeling

“It is a feeling that you know, but still have a hard time to explain it”

Malcolm Gladwell

Gut Feeling

“It is a feeling that you know, but still have a hard time to explain it”

Malcolm Gladwell

Positive/Negative/Interesting

A good way of weighing the pros, cons and implications of a decision.

Peter Ueberroth

Positive/Negative/Interesting

Positive

Negative

Interesting

What’s good?

What’s bad?

What would you be curious about?

“Should we charge for the

privilege of carrying the

Olympic Torch?”

Positive/Negative/Interesting

All marriages are no longer “Till Death do you part.” Marriages now only last 5 years.

Cost/Benefit Analysis

Everything has a Cost

Money

Time

Personnel

Confusion

Bad Feelings

Cost/Benefit Analysis

Everything has a Cost

Does the Benefit outweigh that Cost?

Cost/Benefit Analysis

Cost/Benefit Analysis

Benefit

Cost/Benefit Analysis

Benefit

Cost

Cost/Benefit Analysis

Benefit

Cost

Text

Text

Text

Text

Text

Text

Text

Text

Text

Cost/Benefit Analysis

“Targets or goals which are easily achievable and which do not require a lot of effort.”

Select Low Hanging Fruit

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

Now, for the Case Studies

Your Turn to Decide