praxophy at palisade regional risk conference in dc

Heart, Head, and Hands

A small non-profit uses PraXophy Management System (PxMS) and Palisade’s @RISK to tackle its

existential questions, and thrive

Case Study Situation

• Landscape– Plenty of Big Box, Wizard-Behind-Curtain solutions—but how well do they really work?

– Looking to market Blue Collar, Kitchen Table consulting: practical, facilitated, valued, transparent, and owned

• Client’s decision opportunity– On the order of $2M, based on annual income from donations and rents of about $150K

– Client not aware of latest in decision analysis and not loaded with cash—sound typical?

• Important considerations– Soft skills. Anne Robinson, past President of INFORMS pointed out that while we have

distinguished ourselves on the analytics front (CAP), as a profession we are weak in soft skills.

– Context. Prof. Eric Davis wrote “10 Myths about the Crisis in Iraq.” He stressed the important role of context in implementing productive policy. Myths distort the crisis and mislead policy-makers.

2PraXophy: Practical Wisdom for Value-Focused and Data-Fueled Decision-Making 6/29/2014

Desired Outcomes for This Presentation

• Describe the context for the case study

– What is the opportunity we’re working on?

– What hypotheses are we testing? What data are needed?

– What is the overall scope of the effort?

• Explain the methodology

– What is PraXophy Management System (PxMS)?

– How does it work? Why is it useful? What can we do with it?

– Some benefit and effort considerations of PxMS

• Discuss Status of the Case Study with some technical details

– What are the expected outcomes of this application of PxMS?

– How might PxMS be applied to other opportunities?

– WIIFM? What’s next? Way Ahead?

• Make some new friends


Follow-up / Contact

PraXophy: Practical Wisdom for Value-Focused and Data-Fueled Decision-Making 4

• https://www.facebook.com/PraXophy• [email protected]• https://www.linkedin.com/in/davedoane

• https://twitter.com/PraXophy @PraXophy• http://www.slideshare.net

• https://todaysmeet.com/PraXophy

6/29/2014

c8wrbq7v

https://www.facebook.com/PraXophy

mailto:[email protected]

https://twitter.com/PraXophy

http://www.slideshare.net/

https://todaysmeet.com/PraXophy

PraXophy Management System (PxMS)

PraXophy means “Practical Wisdom.” The PraXophy Management System (PxMS) was created for

• strategic-level organizational learning and communication (value),

• enterprise performance management (quality), and

• project selection and portfolio management for continuous process improvement (utility)

Applied Management & Decision SciencesPxMS is a unique, simple, yet powerful extension of several decision analysis concepts:

• Checkland (1981) Systems Thinking

• Keeney (1992) Value-Focused Thinking

• Kaplan & Norton (1996) The Balanced Scorecard

• Kirkwood (1996) Multi-objective Decision Analysis with Spreadsheets

• Parnell (2003) Future Value Analysis

• George (2007) Lean Six Sigma

• Monte Carlo Simulation with @RISK plug-in for MS Excel by Palisade

Drucker: “All business is either marketing or innovation.”

PxMS Methodology Outline

6

Step 0: Marketing

1. Describe Context

2. Build the Qualitative Value Model

3. Quantify the Evaluation Measures

4. Develop the Problem Statement

5. Generate Alternative Strategies

6. Use QVM for Future Value Analysis

7. TransitionPraXophy: Practical Wisdom for Value-Focused and Data-Fueled Decision-Making 6/29/2014

Demonstrate the benefits multi-objective decision analysis• Systematic process with well-developed analysis

techniques and computer software tools• Appropriate for quantifying values and uncertainties• Strong professional society and technical literature

Engage the stakeholders and decision makers• Incorporate information from functional experts (inside)

and interested stakeholders (outside)• Provide insight to decision-makers faced with hard

problems.• Present objective, traceable, and robust analysis

support.

Initial Assessment of the Client’s Situation

• Leadership not engaged in D-M process; they commission a Strategic Planning Team (SPT) to confirm a pre-determined “correct” answer

• SPT produces detailed Pro-Con analysis of alternatives, but the criteria were different for each alternative—comparing apples and oranges and bananas and…

• Alternative Focused vs. Value-Focused

– Where’s the context? Not modeled

– Where’s the Fundamental Objective or overarching raison d'ê·tre?

– Where’s the yardstick? Lots of data, but no metrics, no measuring system, and no score

• Where are the value gaps? Is the SPT addressing the most pressing?

• Where is the Alternative Generation Table? How to compare and express preferences across many options?

• When to take action? Conditions-based decision points?

6/29/2014 PraXophy: Practical Wisdom for Value-Focused and Data-Fueled Decision-Making 7

Alternatives vs. Values

Alternative Focused Thinking

• Solve problems—reaction

• Bias for self-reliance

• Generate alternatives

• Rack and stack

• Choose based on weighted selection criteria

Value-Focused Thinking

• Qualitative, Value-focused framework—PROACTIVE

• Bias for collaborative action, continuous process improvement

• Generate value gaps

• Supports a systems view

• Launch L6S projects to fill the value gaps and optimize portfolio

Keeney, R.L. (1992). Value Focused Thinking.


Issues and Potential Pitfalls• Time and energy to construct the model

– Collecting meaningful, reliable data

– Maintaining the model to keep it relevant and useful

• Organizational culture– Goal setting / Performance evaluation

– Decision making styles:

• Transparent and participating? OR

• Close-hold and secretive?

– Communication needs

• Setting and managing thresholds– Confidence in data

– Grading on a curve

• Collaboration– Tracking trends

– Making resource allocation decisions

• Transition – Training

– Documentation

– Maintenance

9PraXophy: Practical Wisdom for Value-Focused and Data-Fueled Decision-Making 6/29/2014 Cave

Cabin

Condo

Castle


10

Step 0: Marketing

1. Describe Context







• Weltanschauung: the Client’s worldview, in particular, external forces impacting the competitive landscape

• Milieu: the aggregation of cultural norms to the corporate level—the way we do things around here

• Tao: the Way, that is, the philosophical approach of the senior leader. This is similar to a Target Audience Profile

• Est: the Ground Truth. All of our best analysis is but a shadow of reality

PxMS OverviewDecisions take place in a system of nested environments

Weltanschauung, or worldview

Milieu, or culture

Tao, or “The Way”

Est, or what is


Interview QuestionsTarget Audience Profile

1. What could go wrong with our current strategy?

2. Where are we most seriously under-resourced?

3. Which of the stakeholder’s questions can only you answer?

4. What keeps you up at night?

5. If we do this right what would it be like in 5 years?

Thank you for your participation!


EstUnderstanding the essence of what is really real

Organizational culture is “the way we do things around here.” –E. Schein

“If you want to improve the world, the place to begin is in your own heart, and head, and hands.” –author R. Pirsig“Essentially, all models are

wrong, but some are useful.” –statistician G.E.P. Box

"For a flow system to persist in time (to survive) it must evolve in such a way that it provides easier and easier access to the currents that flow through it." --scientist Adrian Bejan

"Not everything that counts can be counted, and not everything that can be counted counts." --Albert Einstein, from a sign he kept in his office

"The aim of education is tolerance." --Helen Keller

"Watch your thoughts, for they become words. Watch your words, for they become actions. Watch your actions, for they become habits. Watch your habits, for they become character. Watch your character, for it becomes your destiny." — Unknown



14

Step 0: Marketing

1. Describe Context







• Fundamental Objective• Objective Functions• Means Objectives• Evaluation Measures• Value Functions

Structure of a Generic Qualitative Value Model1

Clear and concise

description of

Purpose, e.g.,

Win the War

Calculate

and display

the System

Score

67

Objective

Functions

(not scored)

Max or Min Functions,

i.e., "stretch goals"

that go beyond

describing how to

achieve the FO.

Ends

0.40 0.35 0.25

Means Objective 1 Means Objective 2 Means Objective 3

55 73 78

0.25 0.33 0.25

Evaluation Measure

1.1

Evaluation Measure

2.1

Evaluation Measure

3.1

65 87 57

0.25 0.33 0.25

Evaluation Measure

1.2

Evaluation Measure

2.2

Evaluation Measure

3.2

43 85 87

0.25 0.33 0.25

Evaluation Measure

1.3

Evaluation Measure

2.3

Evaluation Measure

3.3

92 48 78

0.25 0.25

Evaluation Measure

1.4

Evaluation Measure

3.4

19 90

Low Color High

100 Reassess 101

90 Target 99

75 Satisfactory 89

40 Warning 74

1 Unsatisfactory 39

-1 Regroup 0

Value Function

Thresholds

Evaluation

Measures

Fundamental

Objective

Means Objectives Means

Ways

Data in,

scores out


1

Clear and concise

description of

Purpose, e.g.,

Win the War

Calculate

and display

the System

Score

67

Objective

Functions

(not scored)



that go beyond

describing how to

achieve the FO.

Ends

0.40 0.35 0.25


55 73 78

0.25 0.33 0.25

Evaluation Measure

1.1

Evaluation Measure

2.1

Evaluation Measure

3.1

65 87 57

0.25 0.33 0.25

Evaluation Measure

1.2

Evaluation Measure

2.2

Evaluation Measure

3.2

43 85 87

0.25 0.33 0.25

Evaluation Measure

1.3

Evaluation Measure

2.3

Evaluation Measure

3.3

92 48 78

0.25 0.25

Evaluation Measure

1.4

Evaluation Measure

3.4

19 90

Low Color High

100 Reassess 101

90 Target 99

75 Satisfactory 89

40 Warning 74

1 Unsatisfactory 39

-1 Regroup 0

Value Function

Thresholds

Evaluation

Measures

Fundamental

Objective


Ways

Data in,

scores out

16PraXophy: Practical Wisdom for Value-Focused and Data-Fueled Decision-Making

1

Clear and concise

description of

Purpose, e.g.,

Win the War

Calculate

and display

the System

Score

67

Objective

Functions

(not scored)



that go beyond

describing how to

achieve the FO.

Ends

0.40 0.35 0.25


55 73 78

0.25 0.33 0.25

Evaluation Measure

1.1

Evaluation Measure

2.1

Evaluation Measure

3.1

65 87 57

0.25 0.33 0.25

Evaluation Measure

1.2

Evaluation Measure

2.2

Evaluation Measure

3.2

43 85 87

0.25 0.33 0.25

Evaluation Measure

1.3

Evaluation Measure

2.3

Evaluation Measure

3.3

92 48 78

0.25 0.25

Evaluation Measure

1.4

Evaluation Measure

3.4

19 90

Low Color High

100 Reassess 101

90 Target 99

75 Satisfactory 89

40 Warning 74

1 Unsatisfactory 39

-1 Regroup 0

Value Function

Thresholds

Evaluation

Measures

Fundamental

Objective


Ways

Data in,

scores out

1

Clear and concise

description of

Purpose, e.g.,

Win the War

Calculate

and display

the System

Score

67

Objective

Functions

(not scored)



that go beyond

describing how to

achieve the FO.

Ends

0.40 0.35 0.25


55 73 78

0.25 0.33 0.25

Evaluation Measure

1.1

Evaluation Measure

2.1

Evaluation Measure

3.1

65 87 57

0.25 0.33 0.25

Evaluation Measure

1.2

Evaluation Measure

2.2

Evaluation Measure

3.2

43 85 87

0.25 0.33 0.25

Evaluation Measure

1.3

Evaluation Measure

2.3

Evaluation Measure

3.3

92 48 78

0.25 0.25

Evaluation Measure

1.4

Evaluation Measure

3.4

19 90

Low Color High

100 Reassess 101

90 Target 99

75 Satisfactory 89

40 Warning 74

1 Unsatisfactory 39

-1 Regroup 0

Value Function

Thresholds

Evaluation

Measures

Fundamental

Objective


Ways

Data in,

scores out

1

Clear and concise

description of

Purpose, e.g.,

Win the War

Calculate

and display

the System

Score

67

Objective

Functions

(not scored)



that go beyond

describing how to

achieve the FO.

Ends

0.40 0.35 0.25


55 73 78

0.25 0.33 0.25

Evaluation Measure

1.1

Evaluation Measure

2.1

Evaluation Measure

3.1

65 87 57

0.25 0.33 0.25

Evaluation Measure

1.2

Evaluation Measure

2.2

Evaluation Measure

3.2

43 85 87

0.25 0.33 0.25

Evaluation Measure

1.3

Evaluation Measure

2.3

Evaluation Measure

3.3

92 48 78

0.25 0.25

Evaluation Measure

1.4

Evaluation Measure

3.4

19 90

Low Color High

100 Reassess 101

90 Target 99

75 Satisfactory 89

40 Warning 74

1 Unsatisfactory 39

-1 Regroup 0

Value Function

Thresholds

Evaluation

Measures

Fundamental

Objective


Ways

Data in,

scores out

1

Clear and concise

description of

Purpose, e.g.,

Win the War

Calculate

and display

the System

Score

67

Objective

Functions

(not scored)



that go beyond

describing how to

achieve the FO.

Ends

0.40 0.35 0.25


55 73 78

0.25 0.33 0.25

Evaluation Measure

1.1

Evaluation Measure

2.1

Evaluation Measure

3.1

65 87 57

0.25 0.33 0.25

Evaluation Measure

1.2

Evaluation Measure

2.2

Evaluation Measure

3.2

43 85 87

0.25 0.33 0.25

Evaluation Measure

1.3

Evaluation Measure

2.3

Evaluation Measure

3.3

92 48 78

0.25 0.25

Evaluation Measure

1.4

Evaluation Measure

3.4

19 90

Low Color High

100 Reassess 101

90 Target 99

75 Satisfactory 89

40 Warning 74

1 Unsatisfactory 39

-1 Regroup 0

Value Function

Thresholds

Evaluation

Measures

Fundamental

Objective


Ways

Data in,

scores out

6/29/2014


17

Step 0: Marketing

1. Describe Context







• Type of data• Type of metrics

• Natural, Direct (shared, repeatable)• Constructed, Proxy (must pass the Clairvoyant Test)

• Value functions convert data to score • Ranking Methods—determining ordinal importance• Weighting—determining the relative importance of ranked • Thresholds—adjustable grading curves

Natural or Constructed


Quick Stats Review


# Data Scale Description

1 Categorical Nominal Names. Categorically discrete data such as name of your school, type of car you drive or name of a book.

2 Quantitative Ordinal Quantities that have a natural rank ordering, but the intervals between ranks may have no relative significance.

3 Discrete Interval Like ordinal except we can say the intervals between each value are equally split, e.g., temperature in degrees Fahrenheit.

4 Continuous Ratio Discrete data with a natural zero point, e.g., time, since 0 time is meaningful, or degrees Kelvin (absolute 0). In these scales, each interval step has the same degree of magnitude.

Example Evaluation Measures

Direct Proxy

Natural

Constructed

• Net Present Value• System Reliability• Force Closure Time• Probability of Kill• Bandwidth per Sec

• Performance Evaluation(Promotion Potential)• Student Grades(Student Learning), (Teacher Performance?)• Church Income(Depth of Touches)• Mark-to-Market Value(Resilience, Capacity, Health)

20

• Results of Public Opinion Polls

• Natural Language Programming

• Mohs Scale of Mineral Hardness

• Pictograph Perceived Pain(Actual pain)• Subject Matter Expertise(True state of nature)• Church Attendance (Breadth of Lives Touched)

PraXophy: Practical Wisdom for Value-Focused and Data-Fueled Decision-Making 6/29/2014

• Temperature, deg F• Consumer Price Index• Gross Domestic Product

# Lo Hi

5 161 200 100 blue

4 121 160 99 green

3 81 120 89 yellow

2 41 80 74 orange

1 11 40 39 red

0 0 10 0 black

A Purpose & Limits

B Data Type & Collection Method

C Source of Data

D Type of Scale

E Function shape

Proxy for quantity of touches; subject to capacity limits

Discrete; Counts

Attendance records taken and maintained by church leaders

Weekly Attendance

ThresholdDescription

Ratio, Natural, Proxy

Increasing, Convex, Diminishing returns near limit

Bursting at seams, new people feel lost, retention may suffer

Growing yet retains small group feel and fits comfortably

Small and solid, good recruiting and retention

Small but viable, some new people stay and contribute

Too small, not self-sustaining, new people go elsewhere

Collapsing rapidly, unsustainable, abandon ship

Eliciting a Value Function


Converting a Datum to a Score


input > 80 74.00 < output

range delta

39 -81 -2.07692 1 -2.07692 96.92

39 -41 -1.05128 10 -10.5128 78.49

39 -1 -0.02564 15 -0.38462 73.62

39 39 1 35 35 74.00

29 69 2.37931 39 92.7931 92.79

10 80 8 0 0 0.00

RF 10000 Bottom Red Orange Yellow Green

Lo 0 0 0 39 35 15 11

Hi 200 10000 0 39 35 15 11

2. Scroll down to find the first positive delta value (39)

1. Import the Attendance number (80) from data worksheet

3. Read across to the scored value of X (74)

4. The Resolution Factor (RF) is a variable used to zoom out or add more pixels to the color-coded background. The Peltier Tech Blog by Jon Peltier has an excellent tutorial on background shading at http://peltiertech.com/WordPress/

Depicting Thresholds and the Score


0 50 100 150 200 250

0

20

40

60

80

100

120

Weekly Attendance

X


24

Step 0: Marketing

1. Describe Context







3-element Value PropositionCustomer: visionary, pragmatist, or conservativeProduct: use “industrial strength” toolsApplication: generate better alternatives

Use the Customer’s languageTailor techniques to the applicationHave regular interaction with the decision makerPresent understandable results

Find and Close Value Gaps


0.40 0.35 0.25


55 73 78

0.25 0.33 0.25

Evaluation Measure

1.1

Evaluation Measure

2.1

Evaluation Measure

3.1

65 87 57

0.25 0.33 0.25

Evaluation Measure

1.2

Evaluation Measure

2.2

Evaluation Measure

3.2

43 85 87

0.25 0.33 0.25

Evaluation Measure

1.3

Evaluation Measure

2.3

Evaluation Measure

3.3

92 48 78

0.25 0.25

Evaluation Measure

1.4

Evaluation Measure

3.4

19 90

Time X Attend Park Income Exp Float Cum Float Net Worth

0 80 27 3.1 2.4 0.70 8 1.79

1 89 30 3.35 2.46 0.89 19 1.86

2 99 33 3.62 2.52 1.09 32 1.93

3 109 36 3.91 2.58 1.32 48 2.01

4 121 40 4.22 2.65 1.57 67 2.09

5 135 45 4.55 2.72 1.84 89 2.17

6 150 50 4.92 2.78 2.14 115 2.26

7 166 55 5.31 2.85 2.46 144 2.35

8 184 61 5.74 2.92 2.81 178 2.45

9 205 68 6.20 3.00 3.20 216 2.54

10 227 76 6.69 3.07 3.62 260 2.65

11 252 84 7.23 3.15 4.08 309 2.75

12 280 93 7.81 3.23 4.58 364 2.86

13 311 104 8.43 3.31 5.12 425 2.98

14 345 115 9.11 3.39 5.71 494 3.09

15 383 128 9.83 3.48 6.36 570 3.22

Close Value Gaps with the DMAIC ProcessD = Define the problem or opportunityM = Measure to objectively establish current baselines as the basis for improvement. A = Analyze to identify, validate and select root cause for elimination.I = Improve by identifying, testing, and implementing a solution to the problem.C = Control by monitoring improvements to ensure continued and sustainable success.

Worksheet View


Average Annualized Weekly AttendanceMore people in Church = more lives touched; Measure the Quantity of Touches

80 Raw number (integer)

74.00 Score (LOOKUP from Value Function)

0.4 Weight (Sum of all MO weights equals 1)

29.60 Contribution of this MO to Total Score

EVALUATION MEASURES

1.1 Worship Attendance (includes members, friends, and visitors)

62 Current 5 year average annualized weekly attendence

80 Current 1 year average annualized weekly attendence

34 Average Membership 5 years ago

47 Average membership last 12 months

183 Peak attendence last 12 months

8 Minimum attendence last 12 months

LIMITATIONS

180 Capacity per Service (seating)

39 Capacity per Service (parking)

2 Handicap

35 Regular size

2 Visitor reserved

0 Bus reserved

Lay leader participation

Age distribution

1 Means Objective Weights must sum to 1

PROJECTIONS

0.11 Annual worship attendance growth rate last 5 years

0.11 Expected annual attendance growth rate (min, mean, and max; distribution)

135 Projected attendence at time X (mean, with 90% confidence interval)

Cell requires manual input

Cell contains a formula

Cell contains random variable

Cell contains a limitation

Legend

A total of four EMs feed into MO 1. (EM 1.1 is shown.)

In addition to EMs, each MO has space for Limitations and Projections.@RISK to the

Rescue!


27

Step 0: Marketing

1. Describe Context







• Construct Affinity Diagram• Based on Value Table• A subset of the overall model

• Determine functions, tasks, and candidate evaluation measures

• Evaluate alternatives in view of impact on System Score

A Series of Three Instructive Issues Relating to the Generation of Alternatives

• The Decision Matrix (Dec Mat)

– Techniques for Ranking

– Determining Relative Importance

• The Extrapolation Problem

• The Problem of Communicating Concisely


1. The Dec Mat Problem

• We all use Decision Matricies…

• Pro-Con analysis of 4 alternatives

• Converting Pros and Cons into CoAs and SoNs

• Converting comments to symbols++,

+,

0,

-, and

–

• Converting symbols to numbers


Relative SoN

Importance

Weights Sum

to Unity

v(i1,j1) v(i2,j1) v(i3,j1) v(in,j1) Row SUM

w1*v(i1,j1) w2*v(i2,j1) w3*v(i3,j1) wn*v(in,j1) Weighted Sum





v(i1,jn) v(i2,jn) v(i3,jn) v(in,j1) Row SUM

w1*v(i1,jn) w2*v(i2,jn) w3*v(i3,jn) wn*v(in,j1) Weighted Sum

Where

i = columns

j = rows

w = weights

s = score

v = values

r = rank

ScoresPreference

(Rank of

Weighted

Sum-

Products)

i1

w1

i2

States of Nature (SoN): Criteria (Objectives, Expected Outcomes) or Attributes (Desired

Characteristics)

i3 in

wnw3w2

j1

Courses of Action

(CoA): Choices,

Alternative Solutions

j2

j3

jn

Format of a Typical Dec Mat


The four big picture options

1) Sell and Relocate somewhere else, either rent, buy, or build

2) Tear Down and Rebuild on current site

3) Renovate/Upgrade current building

4) Partnering or other innovative alternate


Sell and Relocate somewhere else, either rent, buy, or build

• Quick access to capital (~ 12 –18 month delay)

• (Renting) Frees us from building ownership issues

• Allows us to respond quickly to market opportunities

• “Build to suit our needs”

• Over long term, this has a net financial loss

• Few options are available• Requires fast response on

decisions, difficult to get• Breaks with our tradition and

“sacred space”• Does not help gain equity• Next phase is very expensive• Promotes heavy land use

practices (not “green”)• Less control in rented space

PROs CONs

32PraXophy: Practical Wisdom for Value-

Focused and Data-Fueled Decision-Making 6/29/2014

Rebuild on current site

• Retains “sacred location”

• Avoids land market delays

• Remaining usable land becomes more accessible

• More certainty for future

• Geographic appeal

• Clearer, surer vision

• Less change than relocating

• Maintains assets and equity for the future

• Some loss of “sacred space”

• Higher permit scrutiny

• CBPA has severe restrictions

• Causes time away, costs $$ re: alternate location, membership impact

• Risk of taking on a large, unsupportable loan

PROs CONs



Renovate/Upgrade current building

• Faster permit process

• Less ADA, etc., impact

• Shorter time away, if any

• Can be a more limited change, less cost

• “Constrained”

• Typically costs more to refurbish existing than to build new

• Requires compromise of goals/mission/vision

PROs CONs



Convert Pro-Con to Dec Mat, Part I


Building code (ADA) compliance and Permit process

time

Time spent away from HOME and Sacred Space;

Uncertainty; Change

Total cost of the alternative over the next 20 years

Fidelity to mission, vision, goals

Quick access to capital; Ability to respond quickly to

market opportunities

Building ownership issues (Maintenance & Repair)

Likely impact on membership, participation, and

giving

Design customized to our needs; Flexibility and

freedom of facility use

Impact on long-term financial health; net worth

Decision cycle incl. internal (church) and external

(legal) decisions




Rebuild on current site

Renovate/Upgrade current building

Partnering or other innovative alternate

The “Do Nothing” Option

Derived States of Nature Modified Courses of Action

6 CoAs

The Ranking and Weighting Problem

• Pairwise Comparison (Ranking the States of Nature (SoN))

• Value elicitation (Deriving Senior Leader’s opinion on the relative importance of ranked SoN)

• Saaty Scales (Means of converting expressed preferences or utility to continuous data on a ratio scale)

• Using weighted states of nature to place Courses of Action (CoA) into proper sequence with respect to value, quality, or utility.


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Fid

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issi

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goal

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ABuilding code (ADA) compliance and Permit process

timeA

BTime spent away from HOME and Sacred Space;

Uncertainty; ChangeB B

C Total cost of the alternative over the next 20 years C B C

D Fidelity to mission, vision, goals D D D D

EQuick access to capital; Ability to respond quickly to

market opportunitiesA B C D E

F Building ownership issues (Maintenance & Repair) F B C D F F

GLikely impact on membership, participation, and

givingG G G D G G G

HDesign customized to our needs; Flexibility and

freedom of facility useH B C D H F G H

I Impact on long-term financial health; net worth I B C D I F G H I

JDecision cycle incl. internal (church) and external

(legal) decisionsA B C D E F G H I J

3 8 7 10 2 6 9 5 4 1

8 3 4 1 9 5 2 6 7 10

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Pairwise Comparison


Elicit Weights


Given rankings from 1 to 10 as shown, determine Relative Importance among those States of Nature by eliciting weights. Ask the D-M: “Starting from zero, add 100 units of utility one at a time. Where would you apply the first unit? The second? The 100th?”The resulting distribution of relative importance translates into weights

D Fidelity to mission, vision, goals 3 10 20

G Likely impact on membership, participation, and giving 2 8 15

BTime spent away from HOME and Sacred Space; Uncertainty;

Change 1 7 10

C Total cost of the alternative over the next 20 years 1 5 10

F Building ownership issues (Maintenance & Repair) 1 5 10

HDesign customized to our needs; Flexibility and freedom of

facil ity use 1 5 10

I Impact on long-term financial health; net worth 1 5 10

A Building code (ADA) compliance and Permit process time 0 3 5

EQuick access to capital; Ability to respond quickly to market

opportunities 0 2 5

JDecision cycle incl. internal (church) and external (legal)

decisions 0 0 5

10 50 100

4Phased Rebuild in Place

(Rebuild on current site)

Renovate the existing facility, replacing existing structures

over time in accordance with a master plan. This involves a

long-term solution to the parking constraint, such as a

code variance, or some kind of stacked parking structure

($$$).

Retains “sacred location”

Avoids land market delays

Remaining usable land becomes more

accessible

More certainty for future

Geographic appeal

Clearer, surer vision

Less change than relocating

Maintains assets and equity for the future

Some loss of “scacred space”

Higher permit scrutiny

Ches Bay Preservation Area (CBPA) board

has severe restrictions

Causes time away, costs $$ re: alternate

location, membership impact

Risk of taking on a large, unsupportable loan

1 0.2 1 0.15 2 0.2

2.1

Relocate (Build It) & They

Will Come

(Sell and Relocate

somewhere else, either

rent, buy, or build)

Purchase a new site and build a new facility there, with a

50-year lifecycle. Offer the current facility as collateral.

Use the current facility until the new one is ready. Finish

the sale of the existing facility when the move is complete.

Use the proceeds to reduce new debt.

Quick access to capital (~ 12 – 18 month

delay)

Allows us to respond quickly to market

opportunities

“Build to suit our needs”

Over long term, this has a net financial loss

Few options are available

Requires fast response on decisions,

difficult to get

Breaks with our tradition and “sacred

space”

Next phase is very expensive

Promotes heavy land use practices (not

“green”)

1 0.2 1 0.15 1 0.1

1

Defer and Save

(Renovate/Upgrade

current building)

Maintain the current location (building and grounds) for

another 20 years while saving for a replacement. Requires

extra maintenance and repairs on the older facility, and

may require a second service if attendance continues to

grow. Requires a solution to the parking situation (shuttle?)

Faster permit process

Less ADA, etc., impact

Shorter time away, if any

Can be a more limited change, less cost

“Constrained”

Typically costs more to refurbish existing

than to build new

Requires compromise of

goals/mission/vision

-2 -0.4 1 0.15 2 0.2

2.2

Relocate (Buy It) & They

Will Come

(Sell and Relocate



Use our networth and any other collateral to purchase an

existing facility (buildings and grounds) and renovate to

suit our purposes. Interest rates are low. It may take some

luck to find a suitable place in our catchment area. What

happens to our old facility after we sell and move away?


delay)


opportunities




difficult to get


space”


0 0 0 0 -2 -0.2

0.1

Time spent

away from

HOME and

Sacred Space;

Uncertainty;

Change

0.15

Fidelity to

mission, vision,

goals#

Name

(Pro-Con Chart Name)Description and discussion Pro Con

Likely impact

on

membership,

participation,

and giving

0.2


Convert Pro-Con to Dec Mat, Part II

Sign Points

++ 2

+ 1

0 0

- -1

-- -2

Weighted Dec Mat


4Phased Rebuild in Place

(Rebuild on current site)

Renovate the existing facility, replacing existing structures

over time in accordance with a master plan. This involves a

long-term solution to the parking constraint, such as a

code variance, or some kind of stacked parking structure

($$$).

Retains “sacred location”

Avoids land market delays

Remaining usable land becomes more

accessible

More certainty for future

Geographic appeal

Clearer, surer vision

Less change than relocating

Maintains assets and equity for the future

Some loss of “scacred space”

Higher permit scrutiny

Ches Bay Preservation Area (CBPA) board

has severe restrictions

Causes time away, costs $$ re: alternate

location, membership impact

Risk of taking on a large, unsupportable loan

2.1

Relocate (Build It) & They

Will Come

(Sell and Relocate



Purchase a new site and build a new facility there, with a

50-year lifecycle. Offer the current facility as collateral.

Use the current facility until the new one is ready. Finish

the sale of the existing facility when the move is complete.

Use the proceeds to reduce new debt.


delay)


opportunities

“Build to suit our needs”




difficult to get


space”


Promotes heavy land use practices (not

“green”)

1

Defer and Save

(Renovate/Upgrade

current building)

Maintain the current location (building and grounds) for

another 20 years while saving for a replacement. Requires

extra maintenance and repairs on the older facility, and

may require a second service if attendance continues to

grow. Requires a solution to the parking situation (shuttle?)

Faster permit process

Less ADA, etc., impact

Shorter time away, if any

Can be a more limited change, less cost

“Constrained”

Typically costs more to refurbish existing

than to build new

Requires compromise of

goals/mission/vision

2.2

Relocate (Buy It) & They

Will Come

(Sell and Relocate



Use our networth and any other collateral to purchase an

existing facility (buildings and grounds) and renovate to

suit our purposes. Interest rates are low. It may take some

luck to find a suitable place in our catchment area. What

happens to our old facility after we sell and move away?


delay)


opportunities




difficult to get


space”


0

The Do Nothing Option

(Not part of the original

Pro-Con work)

Let's take a look at what happens if we decide to do nothing. Avoid all the hassles of Capital Campaign

Facility continues to decay, eroding Net

Worth

Attendance will decline, and income with it

Options will only get more expensive

3

The (Nothing is Ever)

Temporary (Non) Solution

(Partner, lease, share, or

other innovative

alternative)

Sell the current facility now, pay off all debts, and lease a

temporary facility (School? Theater? Existing Church?) until

a permanent replacement can be located and procured

(build, rent, buy)

Short term balance sheet boon (at the

expense of long term financial health)

No change in net worth

Simply kicks the decision can down the road

of time

Has the feel of liquidating our dreams

2.3

Relocate (Rent It) & They

Will Come

(Sell and Relocate



Use our credit rating to qualify for a lease to an exisitng

space. Perhaps the landlord will renovate to suit if the

terms are favorable. There is a large vacant grocery store

in Penn Daw Plaza, near new condos and townhomes.

Renting frees us from building ownership

issues

Less control in rented space

Does not help gain equity

Analysis

#Name

(Pro-Con Chart Name)Description and discussion Pro Con

Courses of Action

TOTAL RANK

1 0.2 1 0.15 2 0.2 2 0.2 0.2 0.02 2 0.2 2 0.2 2 0.1 1 0.05 2 0.1 1.42 1

1 0.2 1 0.15 1 0.1 2 0.2 -2 -0.2 2 0.2 1 0.1 1 0.05 2 0.1 1 0.05 0.95 2

-2 -0.4 1 0.15 2 0.2 1 0.1 -2 -0.2 0 0 1 0.1 2 0.1 -2 -0.1 -2 -0.1 -0.15 3

0 0 0 0 -2 -0.2 0 0 -2 -0.2 0 0 0 0 0 0 1 0.05 1 0.05 -0.3 4

-1 -0.2 -1 -0.15 2 0.2 -2 -0.2 -1 -0.1 -1 -0.1 0 0 2 0.1 -1 -0.05 -1 -0.05 -0.55 5

-2 -0.4 -2 -0.3 -1 -0.1 0 0 0 0 0 0 -1 -0.1 0 0 1 0.05 -1 -0.05 -0.9 6

-2 -0.4 -2 -0.3 -2 -0.2 -2 -0.2 1 0.1 0 0 -1 -0.1 1 0.05 0 0 1 0.05 -1 7

Building code

(ADA)

compliance

and Permit

process time

0.050.1

Time spent

away from

HOME and

Sacred Space;

Uncertainty;

Change

0.15

Total cost of

the alternative

over the next

20 years

Fidelity to

mission, vision,

goals

0.1

Quick access to

capital; Ability

to respond

quickly to

market

opportunities

States of Nature

1

Decision

0.1 0.1 0.05

Building

ownership

issues

(Maintenance

& Repair)

Likely impact

on

membership,

participation,

and giving

Design

customized to

our needs;

Flexibility and

freedom of

facility use

Impact on long-

term financial

health; net

worth

Decision cycle

incl. internal

(church) and

external (legal)

decisions

0.10.2 0.05

2. The Extrapolation Problem

• Weekly Attendance Trend

• Weekly Income Trend


Weekly Attendance TrendTOTAL Attend

Mean 62.19792

Standard Error 2.058019

Median 60

Mode 59

Standard Deviation 20.16439

Sample Variance 406.6025

Kurtosis 13.09452

Skewness 2.336839

Range 175

Minimum 8

Maximum 183

Sum 5971

Count 96


This 3-year attendance graph was used to show an 11% annual growth rate.Attendance in was estimated to hit 118 in Y5 exceed capacity in Y6 (2020).Based on that projection, and in light of maintenance issues, the leaders wanted to build a new church.

Would you advise a client to make a $2M decision based on this information?Small risk if Net Worth is, say, $200M, but…

What if that $2M is 10 to 15 times current income?

@RISK to the Rescue!


Created a model that captures the volatility inside the 3-year period and portrays the data gaps. After 1000 iterations, we can be 90% certain that the Y5 Attendance will be between 86 and 147, with a most-likely value of 113.

We can also begin productive conversations around reducing variation and moving mean.

(8%)

49%

(13%)

Weekly Income Trend


This 3-year income graph was used to show an 6% annual growth rate. This compares to a projected 11% growth in attendance over the same period.

GRAND TOTAL

Mean 2702.394

Standard Error 102.7634

Median 2537

Mode 2345

Standard Deviation 1343.806

Sample Variance 1805815

Kurtosis -0.50008

Skewness 0.546222

Range 5968

Minimum 510

Maximum 6478

Sum 462109.4

Count 171

@RISK to the Rescue!again…


(8%)

4%

7%

Attendance Rate

Low Growth -0.1

Most Likely Growth 0.1

Max Growth 0.3

Income Rate

Low Growth -0.1

Most Likely Growth 0.05

Max Growth 0.2

After 1000 iterations, we can be 90% certain that the Y5 Income will be between $2.9 and 4.4K, with a most-likely value of $3.6K.

We can also work to close the “giving gap.” Giving should keep pace with attendance, in theory.

Revised estimates of future states


118

3.9

147

113

86

4.4

3.62.9

Breadth, Quantity of Touches, looking at such things as annualized monthly attendance, lay participation in services, and participation in programs and other key processes

Application, Impact of Touches, looking at the capacity of the organization to carry on living out its vision. Resilience, Preservation of Options, etc., as indicated, in part, by financial health.

Depth, Quality of Each Touch, looking at the relationship between receiving the services and giving back in appreciation.

3. Communicating Clearly and Concisely

47

Attend-ance40%

Net Worth 25%

Income 35%


Three Means ObjectivesTouching Lives

48

Table 0. This is the generic model table. It tabulates the current, changeable results of the model worksheet.

Build separate tables for each scenario (Current, Do Nothing, Build New, Buy Existing, etc.).

Copy each scenario and "paste special values and source formatting" into separate labeled scenario tables

Time X Attend Park Income Exp Float Cum Float Net Worth Score

0 80 27 3.1 2.4 0.70 8 1.79 54.31

1 89 30 3.35 2.46 0.89 19 1.86

2 99 33 3.62 2.52 1.09 32 1.93

3 109 36 3.91 2.58 1.32 48 2.01

4 121 40 4.22 2.65 1.57 67 2.09

5 135 45 4.55 2.72 1.84 89 2.17

6 150 50 4.92 2.78 2.14 115 2.26

7 166 55 5.31 2.85 2.46 144 2.35

8 184 61 5.74 2.92 2.81 178 2.45

9 205 68 6.20 3.00 3.20 216 2.54

10 227 76 6.69 3.07 3.62 260 2.65

11 252 84 7.23 3.15 4.08 309 2.75

12 280 93 7.81 3.23 4.58 364 2.86

13 311 104 8.43 3.31 5.12 425 2.98

14 345 115 9.11 3.39 5.71 494 3.09

15 383 128 9.83 3.48 6.36 570 3.22

16 425 142 10.62 3.56 7.06 655 3.35

17 472 157 11.47 3.65 7.82 748 3.48

18 523 174 12.39 3.74 8.64 852 3.62

19 581 194 13.38 3.84 9.54 967 3.76

20 645 215 14.45 3.93 10.52 1,093 3.92

21 716 239 15.60 4.03 11.57 1,232 4.07

22 795 265 16.85 4.13 12.72 1,384 4.24

23 882 294 18.20 4.24 13.97 1,552 4.40

24 979 326 19.66 4.34 15.32 1,736 4.58

25 1087 362 21.23 4.45 16.78 1,937 4.76


@RISK to the Rescue!

Currently at an estimated 54% of full realization of our Fundamental ObjectiveGetting to 100% means maximizing all 3 Means Objectives and their supporting Evaluation MeasuresIf we do nothing, the value of the property will fall, and behind it will fall attendance and incomeWe looked at 5 major alternatives to the Do Nothing scenario• Relocate & Rent or Share• Relocate & Buy an Existing Facility• Relocate & Build a New Facility• Stay & Renovate the Current Facility• Stay & Conduct a Phased ExpansionChart compares the expected outcomes of the alternatives after a period of 5 years



50

Step 0: Marketing

1. Describe Context







• Monte Carlo Simulation• Sensitivity Analysis (Risk)• Resources: new from the environment, or

reallocated from within?• Project selection and portfolio management• Always show your work!

Future Value Analysis

Future

Opportunities

and Challenges

Hopper of

Alternative

Projects

Portfolio

Structured

Interviews

Get the values

right or the

numbers don’t

matter

Optimization

Model

Get the

numbers right

or the results

don’t matter

Generate

alternatives to

get results that

matter

Strategic

AssessmentMulti-Objective Decision Analysis Portfolio

Analysis

Vision

Mission

Strategy

Resources and

Programmatic

Constraints

Value

Opportunities Value Gaps

Quantitative

Value

Functions

Value

Feedback

Sensitivity Analysis

Qualitative

Value Model

Dr. Gregory S. Parnell, Innovative Decisions Inc. 516/29/2014

Explorations


# Metric Definition

1 Assets The mark-to-market value of bldngs, grnds, furn & equip

2 Liabilites The value of all outstanding debts

3 Reserves Cash reserves, usually a multiple of operating budget

4 Income Avg monthly from all sources (pledge, plate, rent)

5 Expenses Avg monthly all operating expenses

6 Float Income available for discretionary spending

7 Capital Capital campaign requirements

# Variable Definition

1 Growth CPI, Inflation, equity growth factor for Assets

2 Payoff Annual debt service (Prin & Int), reduction for liabilites

3 Reserve Multiple of Operating Budget for Cash Reserve

4 Payment Montly loan payment amount

5 Deferred Deferred maintenance and repairs (20 year model)

6 Asset / Liability Ratio of Assets to Liabilities, bigger is better

7 Debt / Income Ratio of Debts to Income, smaller is better

# Topic Question

1 Debt Service What if we start paying more on the loan?

2 Liquidation What options open / close if we sell the property?

3 Income Suppose we were able to get average pledges up 20%?

4 Income Does income track proportionately with attendance?

5 Flexible Use What if we convert the parsonage to classrooms?

6 Engagement How can we better engage Millenials in the "business"?

7 Conditions What conditions must be met before we can renovate?

# Metric Definition

1 Assets The mark-to-market value of bldngs, grnds, furn & equip

2 Liabilites The value of all outstanding debts

3 Reserves Cash reserves, usually a multiple of operating budget

4 Income Avg monthly from all sources (pledge, plate, rent)

5 Expenses Avg monthly all operating expenses

6 Float Income available for discretionary spending

7 Capital Capital campaign requirements

# Variable Definition

1 Growth CPI, Inflation, equity growth factor for Assets

2 Payoff Annual debt service (Prin & Int), reduction for liabilites

3 Reserve Multiple of Operating Budget for Cash Reserve

4 Payment Montly loan payment amount

5 Deferred Deferred maintenance and repairs (20 year model)

6 Asset / Liability Ratio of Assets to Liabilities, bigger is better

7 Debt / Income Ratio of Debts to Income, smaller is better

# Topic Question

1 Debt Service What if we start paying more on the loan?

2 Liquidation What options open / close if we sell the property?

3 Income Suppose we were able to get average pledges up 20%?

4 Income Does income track proportionately with attendance?

5 Flexible Use What if we convert the parsonage to classrooms?

6 Engagement How can we better engage Millenials in the "business"?

7 Conditions What conditions must be met before we can renovate?


53

Step 0: Marketing

1. Describe Context







TrainingDocumentationMaintenance

The Common Language Problem

• Model Nomenclature

• Analysis Types and their Questions, Perspectives, TTPs, and Modes

• Terms of Art

• Key Phrases

• Acronyms

• Data Dictionary


# Model Nomenclature Definition and Examples

1 WeltanschauungWorld view. External environment. Factors that are largely out

of our control but will impact our options and choices.

2 MilieuCulture. Internal environment, seen as something that can be

influenced. "The way we do things around here," Ed Schein.

3Fundamental Objective

aka Purpose

The answer to the 5th Why?, e.g., mobility. Mission First.

"Harmony" is alignment with Purpose.

4 PeoplePeople Always. Value-Focused Thinking. People are our most

precious resource. "Heart" is putting Values first.

5 Process

Every activity is a process, and every process can be improved.

Better, faster, cheaper. "Head" is planning and continuous

process improvement.

6 Product

Goods or Services. Results of effort. What we provide to add

value. "Hands" refers to applied skills, knowledge, abilities and

other characteristics.

7 Objective Functions

Max or Min functions define How, e.g., max fuel economy, min

traffic tickets, max getting to appointment on time, min

accidents

8Means Objectives aka

Strategies

How will we recognize when the Fundamental Objective has

been met? 100% on time, $0 for violations, etc. Fundamental

Objective score is the weighted sum product of means

objectives.

9 Evaluation MeasuresSpecific data source (speedometer), performance range (0 to

120 mph) used to contribute to a Means Objective score

10 Value Functions

y = f (x). Convert data (engine RPM, horse power, tire traction)

to scores (mph) on a scale based on quality, value, or utility

(preference)

11Thresholds / Rubric /

Grading Curve

Rules for determining the relative merit of a particular score,

e.g., Fines for going too slow or too fast, e.g., $25 for 5 over, $50

for 10 over, $100 for 20 over

12 Metric

a unit of measurement, e.g., mph. Can be lagging (after the fact,

confirming) or leading (before the fact, predictive). Can be a

Measure of Performance (efficiency) or a Measure of Effect

(outcome)

13 Measure a reading taken on a scale, e.g., 40 mph on a speedometer

14 Standard / Target / Rubric

The particular measure of a metric which defines success, e.g.,

35 mph. Can be seen as a yes / no check. Tolerance level

determened by the accuracy of observations and sensitivity to

Type I and Type II errors.

15 Analysis / AnalyticsConsider 4 Types (Descriptive, Comparative, Proscriptive, or

Predictive).

16 MilestonesA checkpoint in time and space. In modeling, a milestone may

be a periodic review or a scheduled rest stop on a road trip.

17 Decision Point

In a conditions-based model, decisions can be triggered when

certain thresholds are crossed. When the fuel gauge gets to 1/4,

start looking for a filling station, or when I have saved up $20K I

can trade in the Honda for a Lexus.

18 ResourcesNormally limited (constrained, bounded) quantities of time,

talent, treasure

19Constraint / Limits /

Boundary

Physical boundaries, financial limits, maximum utilization rates.

Analogous to the rules of operating a motor vehicle on a public

street.

20Performance /

Compliance / EfficiencyFuel efficiency, horsepower

21 Effect / Outcome / Results Actual (or expected) results of actions (or proposed actions)

22 Variable

23Feedback / Assessment /

Grade

Whether the measure is good or bad, e.g., 5 mph over the

posted speed limit. Rewards for meeting or exceeding

objectives and penalties for missing the mark. Consider four

"voices" of feedack: Customer, Strategy, Process, and Business.

55

# Model Nomenclature Definition and Examples

1 WeltanschauungWorld view. External environment. Factors that are largely out

of our control but will impact our options and choices.

2 MilieuCulture. Internal environment, seen as something that can be

influenced. "The way we do things around here," Ed Schein.

3Fundamental Objective

aka Purpose

The answer to the 5th Why?, e.g., mobility. Mission First.

"Harmony" is alignment with Purpose.

4 PeoplePeople Always. Value-Focused Thinking. People are our most

precious resource. "Heart" is putting Values first.

5 Process

Every activity is a process, and every process can be improved.

Better, faster, cheaper. "Head" is planning and continuous

process improvement.

6 Product

Goods or Services. Results of effort. What we provide to add

value. "Hands" refers to applied skills, knowledge, abilities and

other characteristics.

7 Objective Functions

Max or Min functions define How, e.g., max fuel economy, min

traffic tickets, max getting to appointment on time, min

accidents

8Means Objectives aka

Strategies

How will we recognize when the Fundamental Objective has

been met? 100% on time, $0 for violations, etc. Fundamental

Objective score is the weighted sum product of means

objectives.

9 Evaluation MeasuresSpecific data source (speedometer), performance range (0 to

120 mph) used to contribute to a Means Objective score

10 Value Functions

y = f (x). Convert data (engine RPM, horse power, tire traction)

to scores (mph) on a scale based on quality, value, or utility

(preference)

11Thresholds / Rubric /

Grading Curve

Rules for determining the relative merit of a particular score,

e.g., Fines for going too slow or too fast, e.g., $25 for 5 over, $50

for 10 over, $100 for 20 over

12 Metric

a unit of measurement, e.g., mph. Can be lagging (after the fact,

confirming) or leading (before the fact, predictive). Can be a

Measure of Performance (efficiency) or a Measure of Effect

(outcome)

13 Measure a reading taken on a scale, e.g., 40 mph on a speedometer

14 Standard / Target / Rubric

The particular measure of a metric which defines success, e.g.,

35 mph. Can be seen as a yes / no check. Tolerance level

determened by the accuracy of observations and sensitivity to

Type I and Type II errors.

15 Analysis / AnalyticsConsider 4 Types (Descriptive, Comparative, Proscriptive, or

Predictive).

16 MilestonesA checkpoint in time and space. In modeling, a milestone may

be a periodic review or a scheduled rest stop on a road trip.

17 Decision Point

In a conditions-based model, decisions can be triggered when

certain thresholds are crossed. When the fuel gauge gets to 1/4,

start looking for a filling station, or when I have saved up $20K I

can trade in the Honda for a Lexus.

18 ResourcesNormally limited (constrained, bounded) quantities of time,

talent, treasure

19Constraint / Limits /

Boundary

Physical boundaries, financial limits, maximum utilization rates.

Analogous to the rules of operating a motor vehicle on a public

street.

20Performance /

Compliance / EfficiencyFuel efficiency, horsepower

21 Effect / Outcome / Results Actual (or expected) results of actions (or proposed actions)

22 Variable

23Feedback / Assessment /

Grade

Whether the measure is good or bad, e.g., 5 mph over the

posted speed limit. Rewards for meeting or exceeding

objectives and penalties for missing the mark. Consider four

"voices" of feedack: Customer, Strategy, Process, and Business.


Analysis Types


#

Analysis Types and Their

Questions

Distinguishing Analysis Types by Their Perspectives; Tactics,

Techniques, and Procedures; and Modes

1Descriptive

What is going on in there?

Perspective: Est (Existence). TTPs: Basic Counts, Frequencies,

Percentages, Ratios, Ranges, Histograms, Venn Diagrams.

Mode: Survival (Cave)

2

Comparative

Why does it matter? What

can we do better?

Perspective: Tao (Philosophy). TTPs: Trends, Inference, Cause

and Effect Diagrams, Value Stream Maps, SWOT Analyses, SIPOC

Diagrams, Process Flow Charts, 4 Voices Feedback Loops,

Continuous Process Improvement (CPI) Project Identification.

Mode: Stability (Cabin)

3

Proscriptive

What is best? What

should (or should not) be

there?

Perspective: Mileu (Culture). TTPs: Optimization (Maximize or

Minimize), Fundamental Objective (5th Why?), Qualitative

Value Map, Scorecard, CPI Project Selection. Mode: Success

(Condo)

4

Predictive

What is next? What might

be there in possible

future states?

Perspective: Weltanschauung (World View). TTPs: Experiments,

12 dimensions, Synergy, Syzygy, Dashboard, Dynamic System

Model, CPI Portfiolio Management. Mode: Significance (Castle)

Cave

Cabin

Condo

Castle

• Before– All or nothing

– Alternative focus

– No yardstick

– Extrapolations

Heart, Head, and Hands: a Summary

• During– Communicate Strategic Intent

• Create an assessment framework, aka Qualitative Value Model

• Measure success (system score)

– Engage a Community of Practice

• Share success stories, standards, and best practices

• Looking for value gaps / opportunities

– Improve Overall Impact

• Select better Lean Six Sigma projects

• Manage portfolios of process improvement projects

• Identify critical resource shortfalls

• Simulate proposed interventions


• After– Stakeholders know what is being measured

– Decision points are defined

– What if? and What’s best? questions can be explored

– A sense of awareness comes from putting values first

– Found the 3rd Way

Shameless Commerce

PraXophy: Practical Wisdom for Value-Focused and Data-Fueled Decision-Making 58

• Questions / Discussion

• Follow-up / Contact Business Cards (AFSC) https://www.linkedin.com/in/davedoane) https://www.facebook.com/PraXophy [email protected] https://twitter.com/PraXophy @PraXophy, #RRCDC2014 http://www.slideshare.net < one month https://todaysmeet.com/PraXophy < one week

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6/29/2014



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