The Kaizen Forum
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THE KAIZEN FORUM
DECISION MAKING
The Kaizen Forum
DECISION MAKING
The Kaizen Forum
“A decision is a judgement. It is a choice between alternatives. It is rarely a choice between right and wrong. It is at best a choice “DRUCKER between “almost right” and ” “probably wrong”. “A manager by profession is a decision maker; Uncertainty is his opponent, overcoming it
The Kaizen Forum
CONCEPTS TO BE COVERED
“When making decisions don’t get paralysis through analysis”.
Limitations of rational decision making model Models of decision making. Individual vs Group decision making.. Your individual decision making style? Why decision fails? Guidelines for decision making.
DECISION PROCESS Recognize Problem
GATHER FACTS
GENERATE
The Kaizen Forum
1 2
DECISION
MAKE
3 DEFER DELEGATE MATCH IMPLEMENT
ASSESS RESULT MONITOR
CONSTRAINTS OF RATIONAL DECISION MAKING
The Kaizen Forum
“I never sit on a fence.Iam
either on one side or another” Harry Truman
1.
PROBLEM
• • •
Seldom consensus as to the definition of the problem. Differentiate fact from opinion.
2.
GENERATE ALTERNATIVE SOLUTION
• • •
The first acceptable solution is usually accepted. Alternatives are based on what was successful in the past. Specify alternatives that are consistent with goals
Identify what standard is violated.
CONSTRAINTS OF RATIONAL DECISION MAKING 3.
EVALUATE ALTERNATIVES
•
Limited information available about each alternative.
•
Satisfactory solutions, not optimal ones, are usually accepted.
•
Do not evaluate main effects and side effects.
The Kaizen Forum
4. IMPLEMENT AND FOLLOW UP •
Resistance to change is a universal phenomenon.
•
Not always clear what part of the solution should be monitored or measured in follow-up.
The Kaizen Forum
MODEL OF DECISION MAKING D E C IS IO N
P R O G R A M
M
E D
N O N
ON GOING / RULES STRUCTURED EMPRICAL
P R O G R A M
M
E D
REQUIRES THINKING UNSTRUCTURED NOT UNIQUE M
O D E L
C L A S S IC A L
A D M
IN IS T R A T IV E
1.
Approach
Rational/Objective
Satisficing Approach
2.
Type
Prescriptive (Idealized situation)
Descriptive (Reality Based)
3.
Knowledge
Complete
Fragmentary
4.
Probability of risk
Low
High
5.
Alternatives available Many
Only a few
6.
Goals
Broad Spectrum
Defined
The Kaizen Forum
MODELS
“The ideal number for a hard
decision-making meeting is SINGLE two--- with one on holiday !” COMPLETE NOT SH SHARED AIMED AT PERFECTION DEFINED GOALS
CRISES SPEEDY ACTION INTUITIVE RIGID TIGHT CONTROL SHORT RANGE
SNAP MIN
INFORMATION
PARTICIPATIVE ADAPTIVE CHANGEABLE EXPLOITIVE SHIFT FOCUS
FLEX
ANALYTICAL CREATIVE COOPERATIVE BROAD GOALS TEAM WORK
MULTIPILE
CONTINGENCY
C O N C L MAX U S I O N
DIFFERENCES
The Kaizen Forum
WESTERN
JAPANESE
1. Finding an answer. 2. Adhere to group think.
1. Defining the question. 2. Consensus – encourage dissenting opinions. 3. Focus on alternatives
3. Struggle for the right answer. 4. Have to sell decision. 5. Always in a hurry to decide quickly. 6. Plans run into problem.
4. Process delegates authority. 5. Take longer time to decide. 6. Execute with speed
GROUP THINK
The Kaizen Forum
A good CEO will try and anticipate a difficult problem requiring logical analytical decision making and set in motion the machinery for providing necessary information.” FAULTY DECISION MAKING STYLE WHICH DESIRES UNANIMITY AT THE EXPENSE OF QUALITY DECISION 1.
CONDITIONS
• •
Highly cohesive group Under pressure to make decision
2.
SYMPTOMS
• • • •
Not being critical of each other’s ideas. Selective in gathering information. Believe in group morale. Lack of accountability.
The Kaizen Forum
EFFECTIVE GROUP DECISION MAKING Constructive conflict 1. Air legitimate difference 2.Stay task-related. 3.Be impersonal. 4.Play devil’s advocate.
Leadership 1.Avoid domination. 2.Encourage input 3.Avoid groupthink And satisficng. 4. Remember goals.
Effective group Decision making
Creativity 1.Brainstorm 2. Avoid criticizing 3. Exhaust ideas. 4. Combine ideas
The Kaizen Forum
NEMAWASHI! THE TOYOTA WAY
1. •
Make decision slowly be consensus. Thoroughly considering Thorough Consideration all options. Quality Implement of decision rapidly
•
Asking why? 5 times
•
Building Consensus
•
Deming Cycle (PDCA)
Contd
The Kaizen DECISIONForum
ALTERNATIVE TOYOTA MAKING METHODS
Level of involvement
Preferred
Seek Individual Input, then Decide and Announce
Seek Group Input, then Decide and Announce
Decide and Announce
Time
Group Consensus, Management Approval
Fallback
Group Consensus, with full authority
Fallback (if consensus not achieved)
The Kaizen Forum
NEMAWASHI! THE TOYOTA WAY 2.
Considering Alternative Solution
•
Follow set based Approach
•
Different people-different set of alternatives
•
Turn conflict into win / win situation
3.
Presenting Decision on one page
•
Proposal discussed with all
•
Agreement befor presentation
•
One page – formal decision only formality
The Kaizen Forum
EXAMPLE OF AN A3 REPORT CURRENT SITUATAION
PLAN
PROPOSAL
IMPLEMENTATION
LABOR COST & TIME ANALYSIS
CONTROLS
TIME SAVINGS
TIME LINE
DECISION STYLES High
Tolerance for Ambiguity
Analytical
Conceptual
Careful decision makers Adapt to new situation
Broad outlook examine more alternative long range find creative solution
Directive
Behavioral
Efficient,logical use less information, few alternative make decision fast focus on short-term Low
The Kaizen Forum
Rational
Work well with others Receptive to suggestions Avoid conflicts
Way of Thinking
Intuitive
Source: Rowe McGrath Modules in Decision
The Kaizen Forum
HOW TO IMPROVE YOUR DECISION MAKING 1.
ANALYSE THE SITUATION
2.
SHOW FLEXIILITY TO INCREASE ACCEPTABILITY
3.
BEWARE OF PERSONAL BIASES
4.
DON’T BE AFRAID TO IMPOSE YOUR INTUITION ON TOP OF RATIONAL ANALYSIS
5.
ADAPT TO JOB REQUIREMENT
6.
APPLY ETHICAL DECISION GUIDES
7.
LATERAL THINKING
SECOND thoughts are invariably wiser. ---Euripides (480-405 B.C)
WHY DECISIONS FAIL
The Kaizen Forum
1. VULNERABILITY OF GROUP-THINK 2. ESCALATION OF COMMITMENT 3. LEVEL OF MORAL DEVELOPMENT 4. CONCEPTUAL BLOCK PEOPLE who stay in the middle of the road get run over. --- Aneurin Bevan (1897-1960)
The Kaizen Forum
GUIDE LINES FOR DECISION MAKING “The responsibility is always mine but the decision lies with who ever is on the spot”. 1. MARSHAL THE FACTS 2. 3. 4. 5. 6. 7. 8.
CONSULT YOUR FEELING USE WISE TIMINGS DON’T INFER TOO MUCH KEEP THE DECISION FLEXIBLE FOLLOW THROUGH HAVE COURAGE DECISIONS TO SAVE SKIN, BEWARE OF!
DECISION MAKING
The Kaizen Forum
DECISION MAKING
The Kaizen Forum
“A decision is a judgement. It is a choice between alternatives. It is rarely a choice between right and wrong. It is at best a choice “DRUCKER between “almost right” and ” “probably wrong”. “A manager by profession is a decision maker; Uncertainty is his opponent, overcoming it
The Kaizen Forum
CONCEPTS TO BE COVERED
“When making decisions don’t get paralysis through analysis”.
Limitations of rational decision making model Models of decision making. Individual vs Group decision making.. Your individual decision making style? Why decision fails? Guidelines for decision making.
DECISION PROCESS Recognize Problem
GATHER FACTS
GENERATE
The Kaizen Forum
1 2
DECISION
MAKE
3 DEFER DELEGATE MATCH IMPLEMENT
ASSESS RESULT MONITOR
CONSTRAINTS OF RATIONAL DECISION MAKING
The Kaizen Forum
“I never sit on a fence.Iam
either on one side or another” Harry Truman
1.
PROBLEM
• • •
Seldom consensus as to the definition of the problem. Differentiate fact from opinion.
2.
GENERATE ALTERNATIVE SOLUTION
• • •
The first acceptable solution is usually accepted. Alternatives are based on what was successful in the past. Specify alternatives that are consistent with goals
Identify what standard is violated.
CONSTRAINTS OF RATIONAL DECISION MAKING 3.
EVALUATE ALTERNATIVES
•
Limited information available about each alternative.
•
Satisfactory solutions, not optimal ones, are usually accepted.
•
Do not evaluate main effects and side effects.
The Kaizen Forum
4. IMPLEMENT AND FOLLOW UP •
Resistance to change is a universal phenomenon.
•
Not always clear what part of the solution should be monitored or measured in follow-up.
The Kaizen Forum
MODEL OF DECISION MAKING D E C IS IO N
P R O G R A M
M
E D
N O N
ON GOING / RULES STRUCTURED EMPRICAL
P R O G R A M
M
E D
REQUIRES THINKING UNSTRUCTURED NOT UNIQUE M
O D E L
C L A S S IC A L
A D M
IN IS T R A T IV E
1.
Approach
Rational/Objective
Satisficing Approach
2.
Type
Prescriptive (Idealized situation)
Descriptive (Reality Based)
3.
Knowledge
Complete
Fragmentary
4.
Probability of risk
Low
High
5.
Alternatives available Many
Only a few
6.
Goals
Broad Spectrum
Defined
The Kaizen Forum
MODELS
“The ideal number for a hard
decision-making meeting is SINGLE two--- with one on holiday !” COMPLETE NOT SH SHARED AIMED AT PERFECTION DEFINED GOALS
CRISES SPEEDY ACTION INTUITIVE RIGID TIGHT CONTROL SHORT RANGE
SNAP MIN
INFORMATION
PARTICIPATIVE ADAPTIVE CHANGEABLE EXPLOITIVE SHIFT FOCUS
FLEX
ANALYTICAL CREATIVE COOPERATIVE BROAD GOALS TEAM WORK
MULTIPILE
CONTINGENCY
C O N C L MAX U S I O N
DIFFERENCES
The Kaizen Forum
WESTERN
JAPANESE
1. Finding an answer. 2. Adhere to group think.
1. Defining the question. 2. Consensus – encourage dissenting opinions. 3. Focus on alternatives
3. Struggle for the right answer. 4. Have to sell decision. 5. Always in a hurry to decide quickly. 6. Plans run into problem.
4. Process delegates authority. 5. Take longer time to decide. 6. Execute with speed
GROUP THINK
The Kaizen Forum
A good CEO will try and anticipate a difficult problem requiring logical analytical decision making and set in motion the machinery for providing necessary information.” FAULTY DECISION MAKING STYLE WHICH DESIRES UNANIMITY AT THE EXPENSE OF QUALITY DECISION 1.
CONDITIONS
• •
Highly cohesive group Under pressure to make decision
2.
SYMPTOMS
• • • •
Not being critical of each other’s ideas. Selective in gathering information. Believe in group morale. Lack of accountability.
The Kaizen Forum
EFFECTIVE GROUP DECISION MAKING Constructive conflict 1. Air legitimate difference 2.Stay task-related. 3.Be impersonal. 4.Play devil’s advocate.
Leadership 1.Avoid domination. 2.Encourage input 3.Avoid groupthink And satisficng. 4. Remember goals.
Effective group Decision making
Creativity 1.Brainstorm 2. Avoid criticizing 3. Exhaust ideas. 4. Combine ideas
The Kaizen Forum
NEMAWASHI! THE TOYOTA WAY
1. •
Make decision slowly be consensus. Thoroughly considering Thorough Consideration all options. Quality Implement of decision rapidly
•
Asking why? 5 times
•
Building Consensus
•
Deming Cycle (PDCA)
Contd
The Kaizen DECISIONForum
ALTERNATIVE TOYOTA MAKING METHODS
Level of involvement
Preferred
Seek Individual Input, then Decide and Announce
Seek Group Input, then Decide and Announce
Decide and Announce
Time
Group Consensus, Management Approval
Fallback
Group Consensus, with full authority
Fallback (if consensus not achieved)
The Kaizen Forum
NEMAWASHI! THE TOYOTA WAY 2.
Considering Alternative Solution
•
Follow set based Approach
•
Different people-different set of alternatives
•
Turn conflict into win / win situation
3.
Presenting Decision on one page
•
Proposal discussed with all
•
Agreement befor presentation
•
One page – formal decision only formality
The Kaizen Forum
EXAMPLE OF AN A3 REPORT CURRENT SITUATAION
PLAN
PROPOSAL
IMPLEMENTATION
LABOR COST & TIME ANALYSIS
CONTROLS
TIME SAVINGS
TIME LINE
DECISION STYLES High
Tolerance for Ambiguity
Analytical
Conceptual
Careful decision makers Adapt to new situation
Broad outlook examine more alternative long range find creative solution
Directive
Behavioral
Efficient,logical use less information, few alternative make decision fast focus on short-term Low
The Kaizen Forum
Rational
Work well with others Receptive to suggestions Avoid conflicts
Way of Thinking
Intuitive
Source: Rowe McGrath Modules in Decision
The Kaizen Forum
HOW TO IMPROVE YOUR DECISION MAKING 1.
ANALYSE THE SITUATION
2.
SHOW FLEXIILITY TO INCREASE ACCEPTABILITY
3.
BEWARE OF PERSONAL BIASES
4.
DON’T BE AFRAID TO IMPOSE YOUR INTUITION ON TOP OF RATIONAL ANALYSIS
5.
ADAPT TO JOB REQUIREMENT
6.
APPLY ETHICAL DECISION GUIDES
7.
LATERAL THINKING
SECOND thoughts are invariably wiser. ---Euripides (480-405 B.C)
WHY DECISIONS FAIL
The Kaizen Forum
1. VULNERABILITY OF GROUP-THINK 2. ESCALATION OF COMMITMENT 3. LEVEL OF MORAL DEVELOPMENT 4. CONCEPTUAL BLOCK PEOPLE who stay in the middle of the road get run over. --- Aneurin Bevan (1897-1960)
The Kaizen Forum
GUIDE LINES FOR DECISION MAKING “The responsibility is always mine but the decision lies with who ever is on the spot”. 1. MARSHAL THE FACTS 2. 3. 4. 5. 6. 7. 8.
CONSULT YOUR FEELING USE WISE TIMINGS DON’T INFER TOO MUCH KEEP THE DECISION FLEXIBLE FOLLOW THROUGH HAVE COURAGE DECISIONS TO SAVE SKIN, BEWARE OF!
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