1.Presentation made at the Workshop on DecisionMaking for Senior Executives of private Sector by Maxwell Ranasinghe at Hilton Colombo on 18th August 2012

2. How often do you thinkabout how you think? For most people, theanswer is "not very often". Yet every day we eachmake decisions, generateideas, draw conclusions,evaluate other peoplesopinions and so on. These are things that oftenneed careful thought. 3. Where you are now is a result of thedecisions that you have made in the past. As such current status of every organizationis also a result of the decisions made by itstop executives to other decision makersdown the line. So all of us are decision makers 4. Decision making is the process of identifyingproblems and opportunities and resolving them.Decision making is not easy. It has to be done in an ever changing environment. Decisions range from strategic level decisions to day today operational level decisions. But we do not put effort to learn skills in decisionmaking. 5. Business world is full of good and bad decisions. Every one here has made good decision and baddecisions including me. Please write down some of your own good and baddecisions in business Why it was good or why it was bad What are the methods you used taking such decisions 6. Can we improve our decisions ? Yes you can I have helped many to take better decisions. I have taught so many students about this subject andthey are now employed in companies. The super strategy we are going to learn today havehelped a lot. 7. Before developing a super strategy, lets see the decision making landscape in organisations 8. Management decisions typically fall intoone of the two types of categories. Programmed Decisions - are made in responsefor recurring organizational problems. How such decisions should be taken is formulatedwell in advance and managers, subordinates andothers can take decisions as per the laid downprocedure. E.g. buying a computers, stationery, raw materials,transporting products, hiring and firing certaincategories of employees 9. Non programmed decisions are made in response forsituations that are non recurring unique and haveimportant consequences for the organization. Many non programmed decisions involve strategicplanning, as uncertainty is great and problems arecomplex. E.g. building a new factory, closing down operations ofa section, undertaking a major exploration, joining aresearch consortium, manufacturing or out sourcing,merging or take over issue, diversification, going intonew markets, product crisis etc. 10. Uncertainty and certainty In a perfect world, managers would have all thenecessary information to make decisions. In real world, you do not find everything that isneeded to take a decision. In practice, if you strive hard you will be able to findmost of the information that are existing, but to take adecision you need to know what would happen in thefuture too. Thats where most of us find difficult to foresee. 11. Ambiguity - Sometimes you will face with very difficult situations where you are really unclear about the goals to be achieved and also the alternatives available Obviously it falls into unprogrammed decision making category. 12. Decision Making ModelsClassical modelAdministrative modelPolitical Model 13. Classical Model Administrative Political Model/Beavioral ModelClear cut problems and Vague Problem and goalsComplex problems andgoals Conflicting goalsConditions of certainty Conditions of uncertainty Conditions of uncertaintyand ambiguityFull information about Limited information about Inconsistent viewpoints andalternatives and outcomes alternative and their ambiguous informationoutcomesRational choiceby Satisfcingchoicefor Bargaining and discussionindividual for maximizing resolving problem using among members of theoutcomesintuition coalitions 14. Intuition Intuition (gut feeling) represents a quickunderstanding of a decision situation based on pastexperience but without conscious mind. It is not arbitrary or irrational, because it is based onyears of practice and hands on experience whichmakes the managers to take a quick decision withoutgoing through a standard formatted decision processor painstaking computations. 15. Psychologist affirms the power of unconscious mindhas abilities that sometimes surpass those of theconscious mind. Most of the managers surveyed in many studiesconfirm that intuition plays a major role in decisionmaking when uncertain and ambiguous situations. But recent research shows there are many failures ofintuition based decisions. So you need to have a balanced approach withintuition and rationality 16. Six steps in managerial decisionmaking process 1. Recognition or defining the problem 2. Analysing the causes 3. Development of alternatives 4. Selection of desired alternatives 5. Implementation of chosen alternative/alternatives 6. Evaluation and feedback 17. Most important of all the steps is the first step. If you make a mistake there all your efforts in the otherfive steps will go waste. Thats is the case in many faulty decisions So lets have a simple example that many use todemonstrate this important first step Problem Recognition 18. Your company owns a condominium property inColombo 3. Nine floors out of ten are given forbusinesses. There are three elevators in the buildingand they are not the most modern and fast . These business Tenants are complaining that theiremployees are getting angry and frustrated becausethere is always a long delay in getting in to an elevatorto the lobby at rush hours. Discuss among your group members and find out thereal problem in this case and provide a creative answer. 19. Many of you will come out with thefollowing answers if you have notattempted this before More elevators Faster elevators Bigger elevators Encourage employees to use stairs Maintain the elevators well 20. But if you analyse the problem well***** People are angry and frustrated in waiting. Why notprovide an answer to that ? Let them watch television In morning have the breaking news, newspaperheadlines discussion recorded and played In evening have the breaking news or days headlinesin news or a fine a program that people like Have a row of benches 21. If you analyse the alterative answers well you willsee how you have defined the problem AnswerProblem More elevatorsFewer elevators Fast elevatorsSlow elevators Bigger elevatorsElevators capacity is not enough Encourage people to use People are lazy stairs Improve maintenance Elevators go out of service always 22. Mathematical tools There are many quantitative techniques available to helpdecision making. Eg. Game theory etc. However the main problem with quantitative techniques isthat they are unable to suggest hypotheses or to defineproblems or suggest alternatives. Those are the most important parts of a problem whereonly in qualitative decision making models can provide.Those abilities remain in the domain of a personsexperience and creativity. Therefore we do not attempt to use such quantitativetechniques in Strategic Decision Making. We will basicallydiscuss the organizational and process models of decisionmaking in the qualitative category. 23. Managerial styles of handling aproblem The selection of method will also depend on the specificindividual managers personal ways of handling problems.Some need clear cut information in a brief format to takedecisions, Some need much data as possible, Some rely on systems and as well as people to provideinformation, Some would like to find out how people in the organizationwill feel about a decision before it is taken. Therefore we need to consider many factors when aneffective decision making model is created. 24. Developing an effective decisionmaking approach There have been so many models and tools developed fordecision making by management gurus. You may have studied these methods in your Diplomas,Degrees and Professional Courses. Eg. Brainstorming,brain sketching, brain writing, concept fan, stakeholdermapping, mind mapping, gap analysis, six thinking hats,quality circles, decision tree analysis etc. All of them are good but not good enough to use as onetool alone to find answers to real time business problems 25. Our Challenge is to develop a modelthrough what we already know So in our approach in developing a Super Strategy, we will not create an entirely different model but an approach that will combine the best tools available to get the maximum output of making fast, widely supported, high quality decisions on a frequent basis. 26. Can you add following 2698 678349 55 Change the order 2698 678 349 55 27. Add 1+ 2+ 3+to + 10 Add 1+ 2+ 3+ to +100 You will find difficult Change 1 23 498 99 100 100 99 98 973 2 1 101 101101 101 101 101 101 101 x 100 = 10100twice amount we want Divide it by 2 . Then you get the answer 5050 28. Re arranging things in our brain. No magic we use the existing power of your brain. It will simply reap more results We need to learn thinking Skill to be developed to change the approach ofthinking The existing thinking approaches are good forrecognising past and Standard situations Not good enough for designing new possibilities 29. One of the most importantinventions done by man is thebicycle It is a very simple mechanism.It helps man to use his energymuch effectively. It improves use of existingabilities, skills and energy We will use the same thing inour super strategy 30. Potential of the mind and theability to think is like a car and adriver Cars hose power, engine,suspension system is thepotential of the car which issimilar to your brain. But performance of the car willdepend on the skill of the driverwhich is similar to the way youthink. Your thinking approach can bedeveloped to take the maximumout of the power of brain. 31. Towards a super strategy So we will adopt three tools available withcertain adjustment to refine them to includein one super strategy Individual Creative Strategy- Brain writing-Six Thinking Hats to create the super strategy These strategies could be used as one or alltogether depending on the problem You will not find any magic in tools but thepattern of thinking is changed. Simplicity is the magic. 32. Strategy forCreativity forentrepreneurialdecision making 33. Robert Dilts pioneer in NLP has created amodel for Creative Strategy Do not think of the problem you have in hand Choose three places in front of you that you can stepinto One for your Dreamer One for your Realist One for your Critic 34. DreamerThink of a time that you were really creative then step into the dreamer position and relive that time.If you find difficulty in accessing a creative reference of yours, think of a person whom you know is a good creative person.Think if I were that person how do I be creative like himNow you have anchored your dreamer position to that spot. 35. Realist Think back to a time when you were careful and realistic about some plan either yours own or someone elses.Step into the spot that you selected as the place for reailist in you and relive that time.If you find difficulty in accessing an experience of yours think of a person whom you know is good at putting plans into actionThink if I were that person how do I be planning and putting things into action like him When you relived that position come back to uninvolved position. You have now anchored your realistic state to that spot. 36. Critic Remember a time that you really criticize a plan in aconstructive way by pointing out the strengths andweaknesses of the plan and suggesting manyimprovements etc. Get into the Critic position that youselected and relive the experience If you find difficulty in accessing an experience of yoursthink of a person whom you know is a good critic Think if I were that person how do I be critiquing andforwarding suggestions You have now anchored your critic state to that spot. 37. Anchoring Now you have anchored the Dreamer, Realist Criticinto three different places. In reality you can use the same room or separate roomsor separate places for these spots. 38. Dreaming Now take the problem or the outcome you need towork with. Step into the Dreamer spot Let your mind free Use visual constructed thoughts Brainstorm on your own Wonder all around through your mind Use I wonder if scenarios to get more and moreoptions. Do not be logical or evaluate. Just dream 39. Realist Step into the realist position Think about the options/ideas you have dreamed of Organise your ideas Are they realistic How could it be put into practice What changes to be made to make them realistic 40. Critiquing Step into the critic position Think about the plans you made Check and evaluate them Is there anything missing Is the plan needs others cooperation? Is it interesting What do others think? What do you get out of it? What is in it for others? Make an internal dialogue 41. Circular process Step into the dreamers position Take in what you have learnt from realist and Criticsposition Dream again to make options to suit Continue the three positions until plan congruentlyfits each one. Although you use different places and different ways inthe three spots there should be a continuity ofoutcome from one to the other. 42. Brain Writing 43. Next Step- Brain writing Once you complete the individual creativestrategy, you would be called upon toparticipate in a brain writing exercise withthe idea or ideas generated by you duringyour individual creative strategy In practice, you must select a group thatcould really contribute to the problem well 44. There could be a cross functional team such astechnical experts, financial experts, operationalexperts, generalist depending on the problem you haveat hand in the session. There could only be a technical team if the problem isbasically technical. But whoever the members are, they should have astrong set of core values and clear understanding ofthe mission to craft a creative solution. 45. In this brain writing exercise, initially you are allowedto write your suggestion or idea in a paper whereothers can comment. You will not write your name on the paper, but a codethat you can identify as yours. Then you pass your piece of paper with the idea to theperson next to you. No one is allowed to talk. 46. All what you can do is comment on the idea written,pros and cons or anything that you suggest to improvethe idea. Then pass on to the person next to you to do the sameuntil it comes back to the originator. Studies have shown that brain writing has producedmore ideas and refined ideas much better than in aninitial open group brainstorming session 47. Once the paper comes to originator, he or she willgo through all the comments made by the groupmembers and further refine his or her idea. (In a practical office environment, this could be donethrough electronically by sending it to the group by way ofan email. It would allow members to think and write in their ownenvironment. It has to be done before the open brainstorming sessionbegins) 48. Next Step- In super strategy the alternatives or decisions that you made through the individual creative strategy and brain writing will be filtered through Six Thinking Hats. 49. Six Thinking Hats 50. Six Thinking Hats is an important andpowerful technique. It is used to look atdecisions from a number of importantperspectives. This forces you to move outside yourhabitual thinking style, and helps you to geta more rounded view of a situation. This tool was created by Edward de Bono inhis book 6 Thinking Hats 51. Many successful people think from a very rational,positive viewpoint. This is part of the reason that they are successful.Often, though, they may fail to look at a problem froman emotional, intuitive, creative or negative viewpoint. This can mean that they underestimate resistance toplans, fail to make creative leaps and do not makeessential contingency plans. 52. If you look at a problem with the Six Thinking Hatstechnique, then you will solve it using all approaches.Your decisions and plans will mix ambition, skill inexecution, public sensitivity, creativity and goodcontingency planning. You can use Six Thinking Hats in meetings or on yourown. In meetings it has the benefit of blocking theconfrontations that happen when people withdifferent thinking styles discuss the same problem. 53. Each Thinking Hat is a different style ofthinking. There is no arguments on this system There is parallel thinking Everybody will do one thing at a time All will wear one hat at a time A lot of time could be saved from thissystem 54. White Hat:With this thinking hat youfocus on the data available.Look at the information youhave, and see what you canlearn from it. Look for gaps in yourknowledge, and either try tofill them or take account ofthem. This is where you analyzepast trends, and try toextrapolate from historicaldata. 55. Red Hat:Wearing the red hat, youlook at problems usingintuition, gut reaction, andemotion. Also try to think how otherpeople will reactemotionally. Try to understand theresponses of people whodo not fully know yourreasoning. 56. Green Hat:The Green Hat stands forcreativity. This is where you can developcreative solutions to aproblem. It is a freewheeling way ofthinking, in which there islittle criticism of ideas. A whole range of creativitytools can help you here. 57. Yellow Hat:The yellow hat helps you tothink positively. It is the optimistic viewpointthat helps you to see all thebenefits of the decision andthe value in it. Yellow Hat thinking helpsyou to keep going wheneverything looks gloomy anddifficult. 58. Black Hat:Using black hat thinking, look atall the bad points of thedecision. Look at it cautiouslyand defensively. Try to see why it might not work. This is important because ithighlights the weak points in aplan. It allows you to eliminate them,alter them, or preparecontingency plans to counterthem. 59. Black Hat thinking helps to make your plans tougherand more resilient. It can also help you to spot fatal flaws and risks beforeyou embark on a course of action. Black Hat thinking is one of the real benefits of thistechnique, as many successful people get so used tothinking positively and often they cannot seeproblems in advance. This leaves them under-prepared for difficulties andmake them fail 60. The Blue Hat has been usedby the meetings Chair tomove between the differentthinking styles. He or she may have needed tokeep other members of theteam from switching styles,or from criticizing otherpeoples points. This thinks of thinkingprocess 61. Multi voting Step 1 Write the list of ideas in a board Step 2 - Assign a letter to each item to avoid confusion of itemdesignations with the vote tally. Step 3 - Vote ! Each team member selects the most important one-third of the items by listing the letters which appear next to those items. For Example, if there are 60 items, each person should choose the 20 items(one third of the total) ! Each team member may cast only one vote per idea and must cast allallotted 62. Step 4 - Tally the votes. Place a checkmark next toeach item for each vote it received. Retain the itemswith the most votes for the next round of voting.Rule of Thumb - for deciding how many items toeliminate in each round, depending on the size of thegroup: ! If the team has 5 or fewer members, eliminate thoseitems that receive 2 or fewer votes. ! If the team has 6 to 15 members, eliminate all itemsthat receive 3 or fewer votes. 63. Step 5 - Repeat. In the second round, if you have timeyou can have a quick discussion about the ideas listed,then each person again selects the top one-third of theitems. Repeat steps 3 and 4 until only a few items remain. Never multivote down to only one item. Then you can have a final discussion to select the best by show of hands. 64. Although you will observe that there are many steps in thismodel, it will work quickly than you think when theorganization get use to use the model. This is a super strategy of combining many tools ofdecision making together to get the best possible within ashortest period for strategic level decisions.This could be used by small companies to large companiesand government and military too. The beauty of the model will be seen only when you put iton to practice. You will also observe certain areas that need to be adjustedto suit your own style and environment once you start usingit. 65. The decision that you take are important strategic leveldecisions and the process should be totallyconfidential as they are internal for the group. The most important advantage of this model is thateverybody has become a part of the decision makingprocess and once the decision is taken they will go outwith the attitude that this is our decision. If anything goes wrong everybody is responsible andtherefore everybody will take steps to correct it 66. If the chosen alternative fails, the group can learn from itand find together what went wrong and try anotheralternative quickly as it may have already been discussed atlength in the decision making session already held.Another lengthy session may not be required. You also should develop a mechanism to pull the plug earlyif you find that the decision that you took is not reallyworking. It should be an inbuilt part of every decision. Professor Robert Sutton of Stanford University says failearly, fail often, and pull the plug early