SCHOOL BUSINESS LEADERSHIP & MANAGEMENT:

THE DECISION MAKING PROCESS

ASBO MD & DC Annual Spring ConferenceMay 23, 2011

Rick Gay, CPPO, RSBOPurchasing Manager

Baltimore County Public SchoolsISO 9001/2008 Certified

NIGP Outstanding Agency Accreditation Achievement Award – OA4

2011 Candidate for 2012 ASBO International Board of Directors

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Why are decisions necessary?

Decision making is a key role for any manager or

leader. Surprisingly many people struggle when

it comes to making decisions. This might be due

to: Fear of failure Lack of a structured approach Procrastinating Lack of clarity

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Decision Making Sometimes shooting from the hip, good

leaders can make decisions quickly -- often with incomplete data.

As Theodore Roosevelt said, "In any moment of decision, the best thing you can do is the right thing, the next best thing is the wrong thing, and the worst thing you can do is nothing."

Rarely is a leader able to get 100 percent of the information needed for a decision. Typically it is "60 percent and go" or "80 percent and go."

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SEVEN STEPS TO STAGNATION

“We’ve never done it that way”  “We’re not ready for that yet”  “Were doing all right without it”  ”We tried it once and it didn’t work”  “It costs too much”  “That’s not our responsibility”  “It won’t work”

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Why do we make decisions?

Every decision is made to achieve some kind of goal or objective. So, the next step would involve charting

down the goals that you want your decision to achieve.

At this stage, it is also necessary to make a note of the consequences that are not desirable once the decision is made.

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The Balanced Business Scorecard.

Constituents perspective: To achieve our vision, how should we appear to constituents?

Financial perspective: To succeed financially, how should we appear to our stakeholders?

Internal business process: To satisfy stakeholders and constituents, what business processes must we excel at?

Learning and growth perspective: To achieve our vision, how will we sustain our ability to change and improve?

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6 Steps to Decision Making Process

Defining the Problem Develop Alternatives Evaluate the Alternatives

Assess the implications Explore different perspectives Get clear on your ideal outcome Weigh up pros and cons

Make the Decision and Act Implement the Solution Monitor your Solution

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Defining the Problem

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Defining the Problem The first step involved in a decision making

process is to understand the importance of making the decision. Define the problem precisely. State the underlying problem that has to be

solved. You also have to clearly state the outcome or goal

that you desire after you have made the decision. Know specifically who said, ordered, or

demanded what. Don’t settle for secondhand information. Get Details.

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Defining the Problem Stating your goals would help you in clarifying

your thoughts. You would have to make a list of some important factors like: Time required to make the decision Result of making a good and a bad decision People who would help you Who will face the consequences of the decision? Affect of the decision on you and the people

around you What will happen if the decision is not made?

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SWOT – Strengths, Weaknesses, Opportunities and Threats

A tool that identifies the Strengths, Weaknesses, Opportunities and Threats of an organization.

SWOT assesses what an organization can and cannot do as well as its potential opportunities and threats.

The method of SWOT analysis is to take the information from an environmental analysis and separate it into internal (strengths and weaknesses) and external issues (opportunities and threats).

SWOT analysis determines what may assist the agency in accomplishing its objectives, and what obstacles must be overcome or minimized to achieve desired results.

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SWOT – Strengths, Weaknesses, Opportunities and Threats

When using SWOT analysis, be realistic about the strengths and weaknesses of your organization.

Distinguish between where your organization is today, and where it could be in the future.

Also remember to be specific by avoiding gray areas and always analyze in relation to the competition (i.e., are you better or worse than the competition?).

Finally, keep your SWOT analysis short and simple, and avoid complexity and over-analysis since much of the information is subjective.

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Simple Rules for a SuccessfulSWOT Analysis

Be realistic about the strengths and weaknesses of your organization.

The Analysis should distinguish between where your organization is today, and where it could be in the future.

Be specific. Avoid gray areas. Always analyze in relation to your

competition, i.e., better than or worse than your competition .

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Simple Rules for a SuccessfulSWOT Analysis

Keep your SWOT short and simple - but only as short and simple as the application or situation demands - it is about 'fitness for purpose’.

Avoid unnecessary complexity and over analysis.

There is no point listing an opportunity (O) if the same opportunity is available to competitors.

It is pointless to say you have strengths (S) if your competitors have the same.

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5 Common Mistakes in Doing a SWOT Analysis

An unclear goal Maintaining too narrow of a focus Neglecting input from others Performing an analysis only once Reliance on SWOT as a holistic diagnostic

strategy

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  POSITIVE/ HELPFULto achieving the goal

 

NEGATIVE/ HARMFULto achieving the goal

 

INTERNAL Originfacts/ factors of the

organization

 

StrengthsThings that are good now, maintain them,

build on them and use as leverage

WeaknessesThings that are bad

now, remedy, change or stop them.

 

EXTERNAL Originfacts/ factors of the

environment in which the organization operates

 

OpportunitiesThings that are good for

the future, prioritize them, capture them, build on them and

optimize

ThreatsThings that are bad for the future, put in plans

to manage them or counter them

SWOT Overview Matrix:

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A strength could be Your specialist marketing expertise. A new, innovative product or service. Location of your business. Quality processes and procedures. Any other aspect of your business that adds

value to your product or service. Positive tangible and intangible attributes,

internal to an organization. They are within the organization’s control. What do you do well? Is there anything you do

better than most? Better than anyone else? 5/23/2011

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A weakness could be

Lack of marketing expertise. Undifferentiated products or services (i.e. in relation

to your competitors). Location of your business. Poor quality goods or services. Damaged reputation. Factors that are within an organization’s control that

detract from its ability to attain the desired goal. Which areas might the organization improve? What should be improved? What do you do poorly?

What should you avoid, based on mistakes in the past?

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An opportunity could be

A developing market such as the Internet. Mergers, joint ventures or strategic alliances. Moving into new market segments that offer

improved opportunity to change. External attractive factors that represent the

reason for an organization to exist and develop.A New legislative mandate or federal program Cost containment measures

What opportunities exist in the environment, which will propel the organization?Identify them by their “time frames”

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A threat could be A new competitor in your home market. A competitor has a new, innovative product or service. Competitors have superior access to channels of

distribution. Taxation is introduced or increased on your product or

service. External factors, beyond an organization’s control,

which could place the organization mission or operation at risk.

The organization may benefit by having contingency plans to address them if they should occur.

Classify them by their “seriousness” and “probability of occurrence”.

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Develop Alternatives

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Developing Alternatives The situation of making a decision arises because there

are many alternatives available for it. Hence, the next step after defining the main problem would

be to state the alternatives available for that particular situation.

You do not have to restrict yourself to thinking about the very obvious options, rather you can use your creative skills and come out with alternatives that may look a little irrelevant.

This is important because sometimes solutions can come out from these out-of-the-box ideas.

You would also have to do adequate research to come up with the necessary facts that would aid in solving the problem.

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Developing Alternatives For a person to make a decision, he or she has to

be confronted with two or more options.

So, this requires you to make a draft stating the options that are available to you.

One can also create some options that do not exist in reality. Doing this may help you find some solution to your problem and make the decision process a little easier.

Once you have listed the available options, you have to examine each option and make a section for options that seem to be very promising and those that seem not so relevant.

However, you have to be careful not to remove any option from your list before it is analyzed in detail.

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Brainstorming Brainstorming is a process for developing creative solutions to

problems. Brainstorming works by focusing on a problem, and then deliberately coming up with as many solutions as possible and by pushing the ideas as far as possible.

One of the reasons it is so effective is that the participants not only come up with new ideas in a session, but also spark off from associations with other people's ideas by developing and refining them.

conference technique of solving specific problems, amassing information, stimulating creative thinking, developing new ideas, etc., by unrestrained and spontaneous participation in discussion.

A method of shared problem solving in which all members of a group spontaneously contribute ideas.

A similar process undertaken by a person to solve a problem by rapidly generating a variety of possible solutions.

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Brainstorming Rules

Collect as many ideas as possible from all participants with no criticisms or judgments made while ideas are being generated.

All ideas are welcome no matter how silly or far out they seem. Be creative. The more ideas the better because at this point you don't know what might work.

Absolutely no discussion takes place during the brainstorming activity. Talking about the ideas will take place after brainstorming is complete.

Do not criticize or judge. Don't even groan, frown, or laugh. All ideas are equally valid at this point.

Do build on others' ideas.

Do write all ideas on a flipchart or board so the whole group can easily see them.

Set a time limit (e.g., 30 minutes) for the brainstorming.

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Brainstorming Sequence:

One team member should review the topic of the brainstorm using "why", "how", or "what" questions.

Everyone should think about the question silently for a few moments. Each person might want to jot down his/her ideas on a sheet of paper.

Everyone suggests ideas by calling them out. Another way is to go around the room and have each person read an idea from his/her list until all ideas have been written on the board or flipchart. (Note: The team member in charge of the brainstorming session should be enforcing the rules.)

One team member writes down all ideas on board or flipchart.

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Reverse Brain-Storming Reverse brain-storming is a good technique for

creative problem solving, and can lead to robust solutions.

Be sure to follow the basic rules of brainstorming to explore possible solutions to the full.

Reverse brainstorming helps you solve problems by combining brainstorming and reversal techniques.

To use this technique, you start with one of two "reverse" questions:

Instead of asking, "How do I solve or prevent this problem?" ask, "How could I possibly cause the problem?"

Instead of asking "How do I achieve these results?" ask,"Howcould I possibly achieve the opposite effect?"

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How to do Reverse Brain Storming

Clearly identify the problem or challenge, and write it down.

Reverse the problem or challenge by asking:"How could I possibly cause the problem?", or"How could I possibly achieve the opposite effect?"

Brainstorm the reverse problem to generate reverse solution ideas. Allow the brainstorm ideas to flow freely. Do not reject anything at this stage.

Once you have brainstormed all the ideas to solve thereverse problem, now reverse these into solution ideas

forthe original problem or challenge.

Evaluate these solution ideas. Can you see a potential solution? Can you see attributes of a potential solution?5/23/2011

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Evaluate the Alternatives

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Develop and Evaluate Courses of Action:

Lay out possible courses of action. Consider courses of action in view of your

organizations values. Consider the consequences of your

decision.

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Develop and Evaluate Courses of Action:

At this step, you have to develop some criteria,

according to which you have to compare the

various options available to you. These criteria

are conditions that would help you in evaluating

the different options and would aid you inMaking the decision.

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Develop and Evaluate Courses of Action:

Once you have decided on the criteria, it is time

for analysis of each option according to the set

conditions. Make a table, where the criteria appears in columns and options appear in

rows. Rate each option with a numerical digit, as

to how it would be beneficial for each criteria.

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Evaluate the AlternativesThis can be said to be the one of the most important stages of the decision making process. This is the stage where you have to analyze each alternative you have come up with. You have to find out the advantages and disadvantages of each option. This can be done based onthe research you have done on that particular alternative.at this stage, you can also filter out the options that you think are impossible or do not serve your purpose. Rating each option with a numerical digit would also help in the filtration process.

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Evaluate the AlternativesAfter rating the available options according

to criteria, try to combine different options

that areavailable to you and see whether you can

comeup with a better solution, instead of just

choosingone option. You also have to summarize theresults you got for each option to make the

finaldecision.

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Evaluate the AlternativesStep 4 is where you have to analyze the different options in detail. Your analysis would be on the basis of what would be the result of each option available to you. You can take the help of different people at this stage, asking them to give their opinion on each option. Here, you would be able to recognize certain options that require more research or contemplation. This stage is a filtration process where the options that seem to be irrelevant should be taken out of the list and only the

best possible ones retained.

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Groupthink Groupthink is a phenomenon that occurs when

the desire for group consensus overrides people's common sense desire to present alternatives, critique a position, or express an unpopular opinion.

The desire for group cohesion effectively drives out good decision-making and problem solving.

Two well-known examples of Groupthink in action are the Challenger Space Shuttle disaster The Bay of Pigs invasion

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GroupthinkThe term "Groupthink" was coined by Irving Janis in1972 when he was researching why a team

reaches anexcellent decision one time, and a disastrous one

thenext. What he found was that a lack of conflict oropposing viewpoints led to poor decisions, because alternatives were not fully analyzed, andbecause groups did not gather enough information

tomake an informed decision.

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How to Spot Groupthink

A strong, persuasive group leader. A high level of group cohesion. Intense pressure from the outside to make a good decision. Groupthink-like behavior is found in many situations and

across many types of groups and team settings. Groupthink can severely undermine the value of a group's

work and, at its worst, it can cost people their lives. On a lesser scale, it can stifle teamwork, and leave all but

themost vocal team members disillusioned and dissatisfied.

Teams are capable of being much more effective than individuals but, when Groupthink sets in, the opposite can be true.

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Make the Decision and Act

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Make the DecisionThis is the stage where the hard work you have put in analyzing would lead you to. TheEvaluation process would help you in looking atthe available options clearly and you have to pick which you think is the most applicable. You can also combine some of the alternatives to come out with a better solution instead of just picking out one of them.

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Making the Final Selection:

When all the ideas have been recorded, combine them as much as possible, but only when the original contributors agree.

Number all of the ideas. Each member votes on the ideas by making a list of the

numbers of the ideas he/she thinks are important or should be discussed further. This list should contain no more than one-third of the total number of ideas.

After counting the votes, cross out ideas with only one or two votes. Then vote again until only a few ideas remain(i.e., 3 or 4). If there is no clear-cut winner, then vote again or discuss the remaining ideas and determine which idea best answers the original question.

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Make the Decision and Act This is the final stage, where you have to make the

ultimate decision. Before you do this it is important to go through all the

steps and recheck all the information. This would be beneficial for delaying the time of taking the final decision, if you find any missing information.

One very important thing that you have to keep in mind is that every decision you take would have some level of risk.

Knowing the potential risk involved in the decision one makes would aid in preparing for the problem that arises with the decision.

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Implement the Solution

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Implement the SolutionThe next obvious step after choosing an option would be implementing the solution. Just making the decision would not give the result one wants. Rather, you have to carry out on the decision you have made. This is a very crucial step because all the people involved in the implementation of a solution should know about the implications of making the decision. This is very essential for the decision to yield successful results.

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Monitor your Solution

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Monitor your SolutionMaking the decision and implementing it is not the end of the decision making process; it is very important to monitor your decision on aRegular basis. At this stage, you have to keep aclose eye on the progress of the solution takenand also whether it has led to the results you expected.

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Guidelines to Improve Decision Making

Improving practical thinking Applying guidelines Moving thinking upstream Finding hidden assumptions Keeping track of unexpected events Thinking from varied perspectives Applying practical reasoning Adapting to the situation

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Improving Practical Thinking

Practical thinking captures the strengths of how we think for everyday problems, calling on experience more than formal models.

Practical thinking includes creative and critical elements. Creative thinking techniques help to generate new information. Critical thinking brings out differences that would normally not

be obvious. Both types of thinking help to fill in gaps in knowledge and resolve uncertainty.

Signs of a practical thinker include a willingness to try alternate approaches to thinking, being open to others’ positions, being prepared to think about issues instead of ignoring or dismissing them, and asking insightful questions.

The qualities of a critical thinker include seeking the truth, an open mindedness, analytical, systematic, self –confident, inquisitive, and mature.

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Applying Guidelines

There is no perfect set of guidelines for success. Improvement requires self-reflection and hard

work to adopt new habits. Making one’s thinking habits more deliberate

will prompt self-reflection and through practice eventually make the improved thinking less effortful.

Improved thinking strategies will create greater self-confidence, making it more likely that challenges will be addressed rather than ignored.

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Moving Thinking Upstream

Thinking ahead and predicting potential ways that a situation assessment may be wrong or that a course of action could depart from what’s anticipated will make one better prepared to handle the unknown.

Having identified and thought about various contingencies will better prepare you for various future events.

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Finding Hidden Assumptions

Coming up with reasons against apreferred conclusion or option instead

of in favor of that conclusion or option will improve thoroughness of reasoning

and give you a basis for contingencies that

mayoccur.

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Keeping Track of Unexpected Events

A natural tendency is to discount information when it does not fit into our expectations.

Over time, accumulated unexpected information can cause a shift in your understanding of a situation.

The first step in this direction is to pay specialattention to information that does not fit intoexpectations.

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Thinking from Varied Perspectives

Looking at problems from different perspectives can improve one’s understanding of a situation, solution goals, and available options.

Taking multiple perspectives helps to understand situations, find new or creative solutions, and reasons about solutions.

Any shortcoming or restriction in one’s perspective is a possible source of problems in reasoning.

Problem solvers can adopt different perspectives by taking on the role of another, using new/different frames of reference, shifting attention or importance about various problem elements, reversing the goal, etc.

These require an openness of mind to be willing to apply a different perspective and practice in flexibility at shifting perspectives.

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Applying Practical Reasoning

There are different ways to improve reasoning ability. One way is to have a standard set of questions to ask

yourself when faced with uncertainty, when there is an over-willingness to accept what is heard, or when there is a lack of critical thinking. One set of such questions is the following:

What if? (e.g., what if this assessment were not the case?) What else? (e.g., what else could be happening?) So what? (e.g., is there a practical difference?) What specifics? (e.g., can claims be confirmed with specific information?) Is there a weak link? (e.g., are there any inconsistencies or

confusions?) What is unexpected? (e.g., is there incomplete or poor reasoning?)

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Adapting to the Situation By increasing the awareness of your own thinking, mental capabilities

can be allocated to the problems at hand. One needs to learn how you think, the patterns and strategies that

are used and that have developed naturally throughout your life. Being better in touch with these can give you what is needed to

increase the chances for successful problem resolution. To guide thinking we should think deliberately about how to solve

problems and decide. This process is similar to decision triage. Use the GO-FITE-WIN

questions to remind how to plan your thinking:

What are Goals and Obstacles of thinking? How Familiar is the situation? How Important is it? How much Time is available? How much Effort is required for an acceptable level of effort? What's Important Now?

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Questions?

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