wise decision making – session 18 the principles and ...1. write the product of this evaluation in...

Session 18 Kingdom Advisors Training 1 © Copyright Kingdom Advisors 2009

Wise Decision Making – Session 18 The Principles and Process for Achieving Decision Confidence

Our Objectives: 1. Develop a biblical perspective on decision making. 2. Identify the ___________ - to effective decision making. 3. Explore the principles of effective decision making. 4. Learn an effective, straightforward process for making high quality

decisions. **Please pause the video and read the case study The Inheritance – Windfall or Whirlpool. Please proceed with the video once you have read the case in its entirety.**

Case represents typical client situation: 1. Confusion 2. ____________ 3. Competing objectives 4. Limited resources with many demands 5. Time constraints


Barriers to Decision Making:

Barrier #1 - Lack of _______ Barrier #2 - Buried in raw data

Barrier #3 - Poor process Barrier #4 - Lack of skill Barrier #5 - Answering the wrong ___________ Barrier #6 -Your decisions in God’s name

"Woe to the rebellious children," declares the LORD, "who execute a plan, but not Mine, and make an alliance, but not of My Spirit…” (Isaiah 30:1 NASB)

Barrier # 7 – Five emotional traps 1. Flying by the seat of your pants 2. Underestimating the influence of personality…yours!

D – Decisive/Fast “FIRE, READY, AIM” I – _________________ “FIRE, FIRE, FIRE” S – Conferring/Methodical “READY, AIM, FIRE” C -- Deliberate/Detailed/Cautious “READY, READY, READY”

3. Moving too fast – jumping to conclusions 4. Over ______________ 5. Groupthink

We find a great example of this in the Old Testament... Numbers 13


Key Principles in Decision Making: 1. As to lack of time – you have time for everything God wants you to do. 2. Learn how to sift the ____________ _________________ from large

quantities of raw data. 3. Apply an effective and robust process that will help you implement these

principles and avoid the pitfalls. 4. Practice the process - develop the needed skills to become a consummate

decision maker (Proverbs 22:29). 5. Focus on the _____________, NOT the answer – while you’re at it, focus

on the right question. 6. Every decision is an attempt to meet ________________ objectives. 7. Seek God’s will on any given decision, not yours or, even that of your

client - see decision making as a team sport between you and God. 8. Beware of the emotional/psychological traps in decision making. God’s Involvement in Your Decision Making: 1. Scripture

a. Psalm 119:105 reminds us that God’s Word is a lamp unto our feet

b. Psalm 19 is a strong reminder of the power of God’s Word 2. ___________ - Barriers: Psalm 32:8, Isaiah 59:1-2, 1 Peter 3:7 3. Holy Spirit - Galatians 5:22-23

a. Two Key Questions: i. What does God think about this?

ii. Does God really care about this? 4. _______________ - Solomon’s son Rehoboam in 1 Kings 12


A Criteria-Based Decision Model: 10 Steps to Wise Decisions Step One - Prayer “Lord, What would you have me to do?”

If any of you lacks wisdom, he should ask God, who gives generously to all without finding fault, and it will be given to him. But when he asks, he must believe and not doubt, because he who doubts is like a wave of the sea, blown and tossed by the wind. (James 1:5-6 NIV)

Step Two - __________ your decision – “What’s the question? Step Three - Clarify your objectives - “What are the decision criteria?” Step Four - Prioritize your objectives – “What are the non-negotiable? What are the trade-offs? Step Five - Identify your ______________ Step Six - Evaluate your alternatives -- “What are the facts?” Step Seven - Make a preliminary decision Step Eight - Assess the ________ -- “What could go wrong here?” Step Nine - Make the final decision Step Ten - _______ the decision The process was developed out of extensive decision research sponsored by the U.S. Government and the RAND Corporation in the late 1950's. Over the years, it has become extremely popular in the corporate world. It is the most widely used decision-making process in corporate America today. More managers and executives have been exposed to this process than virtually all other management seminars combined. Characteristics of a Criteria-Based Decision Model: 1. Maximizes objectivity/minimizes bias 2. Effectively sifts relevant data from the trivial 3. ___________ 4. Structures thinking 5. Makes thinking visible 6. Facilitates the participation of others 7. Increases ______________ for implementation


STEP 1 - PRAYER

If any of you lacks wisdom, he should ask God, who gives generously to all without finding fault, and it will be given to him. But when he asks, he must believe and not doubt, because he who doubts is like a wave of the sea, blown and tossed by the wind. (James 1:5-6 NIV)

STEP 2 – DEFINE THE DECISION 1. Focus on the question not the answer 2. Spell it out in black and white: “I must choose…” 3. Questions to ask

a. What is the crux of the matter? b. Is this decision addressing the core issue or a surface symptom? c. Am I solving this issue for the long term or merely being expedient

for the short term? d. How many alternatives do I have when I have defined the

decision? Frame blindness - Setting out to solve the wrong problem because you have created a mental framework for your decision, with little thought, that causes you to overlook the options or lose sight of important objectives.


What should Bob’s decision statement be? Decision Statement: To choose the best use for the inheritance Key Question: How many alternatives do I have? Avoid the Binary Trap. The binary trap reduces the decision to a “yes” or “no” answer and leads to a poor decision because the appropriate alternatives have not been considered. STEP 3 – _______________ YOUR OBJECTIVES Broad statements of intent 1. What do I want to maximize?

a. Benefits b. Profits c. Relationships d. Time

2. What do I want to ______________? a. Time b. Costs c. Risks

3. What do I want to preserve? a. Relationships b. Principles c. Flexibility

4. What are my qualitative objectives? 5. What are my quantitative objectives? 6. What are my ____________________? 7. When this decision gets made, what will it look like or what will be

accomplished? Decision Criteria - Redo back yard: Objectives: 1. Minimize cash outflows 2. Maximize _____________ 3. Maximize play area 4. Maximize privacy


5. Minimize disruption Again, these are our broad intentions, but they are still lacking in sufficient detail to really guide our deliberations. We must still add more detail. Step 1 - Identify broad intention Step 2 - Deepen criteria with more detail Deepen Your Criteria: 1. Maximize play area becomes…Room for a flat croquet court 2. Minimize disruption becomes…Six weeks, start to finish When we deepen these criteria with more detail and explanation, we are very specific as to what we mean. Decision Criteria – Revise training 1. Minimize cash outflows 2. Maximize number trained 3. Maximize profit margins 4. Maximize _____________ of material 5. Minimize RWB travel Step 1 -- Identify broad intention Step 2 -- Deepen criteria with more detail Deepen Your Criteria: 1. Maximize ____________ trained…30,000 by 2015 2. Minimize RWB travel…3 training trips per year Decision Criteria – Bob 1. Maximize _____________ and future options 2. Honor God as a good steward 3. Do not violate Biblical principles 4. Maximize contribution to financial objectives 5. ________ with Laura 6. Maximize financial return Step 1 -- Identify broad intention Step 2 -- Deepen criteria with more detail


Deepen Your Criteria: 1. Maximize flexibility and future options

a. Maximize _____________ 2. Honor God as a good steward

a. Honor Crown commitment 3. Do not violate Biblical principles

a. _____________ support 4. Maximize contribution to financial objectives

a. In financial plan 5. Unity with Laura

a. Does Laura agree with this decision 6. Maximize Financial Return

a. Return on investment must be considered 7. Unity with Bill Oliver (financial advisor) STEP 4 - PRIORITIZE OBJECTIVES Two Criteria: 1. Must Haves:

a. Determines who ______ into the game b. Essential, non-negotiable c. The presence of this objective in any given alternative must be

absolute 2. Want to Haves:

a. Determines who _______ the game b. Relative criteria c. Use a scale of 1-10 d. They are not ranked, rather they are relative - not all criteria have

the same value e. Begin with choosing one and giving it a value of 10 f. Everything else is measured against the first one

Bob’s Decision Criteria: Must Haves: 1. Biblical support 2. Agreement from Bill Oliver


Want to Haves: 1. Maximize liquidity 2. Honor Crown commitment 3. In financial plan 4. Unity regarding the decision between Laura and I 5. Maximize financial ROI

STEP 5 – IDENTIFY ___________________ 1. Push the ______________. 2. Avoid the binary trap. 3. Anticipate frame blindness. 4. Be creative.

a. Is there a combination of alternatives b. Can I create an alternative from my objectives


Bob’s Objectives:

STEP 6 -EVALUATE THE ALTERNATIVES “Gather the facts” 1. Must Haves: Assess each alternative against the “must-have” objectives, if any alternative fails the test, it is no longer an alternative. 2. Want to Haves

a. Use _________, not opinions b. Remember you are evaluating the alternatives against the

objectives, not each other c. Using a scale of 1-10, how well does that fact of that alternative

meet the objective?


STEP 7 - MAKE A PRELIMINARY CHOICE Multiply the evaluation rating generated in step 6 times the priority rated determined in step 4. 1. Write the product of this evaluation in the appropriate box on the matrix. 2. Repeat this procedure for the entire matrix. 3. Summarize the scores for each alternative at the bottom of the matrix. 4. The alternative with the highest score is the best choice, but there are

several steps yet to take.


STEP 8 – ASSESS THE RISK 1. Ask three questions.

a. What is the _________ thing that could happen if I choose this alternative?

b. How likely is it to happen? c. Multiply the two.

2. Are you __________ the live with the risk? 3. You only do this for the best numerical alternative.

a. Remember you are evaluating the alternatives against your objectives, NOT against each other.

b. EVERY decision is an attempt to meet your objectives.

STEP 9 – MAKE THE DECISION 1. ______ has to know? 2. What is my next step? 3. When am I going to take the next step? “Every decision must degenerate into action for someone.” Peter Drucker


STEP 10 – TEST THE DECISION

Five Biblical Tests for Wise Decisions

Biblical Test Scripture How To

Promise Test “But if anyone lacks wisdom, let him ask of God, who gives to all generously.” (James 1:5 NASB) “I will instruct you and teach you in the way which you should go.”(Psalm 32:8 NASB)

You asked God for His wisdom. Do you believe that, by faith, He heard your prayer and has given you the wisdom you need?

Partner Test “. . . A man of understanding will acquire wise counsel.” (Proverbs 1:5 NASB) “A greedy man brings trouble to his family, but he who hates bribes will live.” (Proverbs 15:27 NIV)

Identify two spiritually mature people who could give you wise counsel concerning your decision. Review your decision-making process with them.

Purpose Test “Everyone who is called by My name, and who I have created for My glory . . .” (Isaiah 43:7 NASB)

“. . . Whatever you do, do all to the glory of God.” (1 Corinthians 10:31 NKJV)

Ask yourself, “Is my purpose for living to bring glory to God?” In this light, in what specific ways will your decision glorify God?

Preference Test “Delight yourself in the LORD, and He will give you the desires of your heart.” (Psalm 37:4 NIV) “For it is God who is at work in you, both to will and to work for His good pleasure.” (Philippians 2:13 NASB)

1. Spend time with God in prayer and in His word. Seek His mind on His will; share your desires.

2. Does this decision reflect your desires?

Peace Test “Let the peace of Christ rule in your hearts . . .” (Colossians 3:15 NIV) “And the peace of God, which surpasses all comprehension, will guard your hearts and minds in Christ Jesus.” (Philippians 4:7 NKJV)

1. Wait at least 24-48 hours on major decisions. 2. As you pray, picture yourself implementing

the best alternative. 3. As you pray and wait, do you experience an

inner peace concerning the implementation of the chosen alternative?


Illustrations (see illustrations) 1. Farrell’s Ice Cream 2. Michaels college 3. Karen’s weekend 4. Mike Hansen telephone system 5. School 6. Excel Spreadsheet PERSONAL CONVICTIONS: Ron’s personal convictions on wise decision making: 1. It is a process. 2. The best decision is always the one that best meets prioritized objectives. 3. A decision can never be any better than the best known alternatives. 4. There are many decision making traps. 5. Decision making permeates every area of life. 6. Decision making is a process and if followed can eliminate much

potential conflict. 7. Almost every piece of financial advice will require a decision. Please take the time to complete your first pass at your own personal convictions related to this session on the “Personal Convictions Worksheet.”

wise decision making – session 18 the principles and ...1. write the product of this evaluation in...

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