The Art and Science of Decision-Making

Doug FertuckMarch 4, 2010

Elements of a Decision

Doug Fertuck www.fertuck.com 248-881-3244

Elements of a Marketing Decision

Apply the lessons of the market and product analysis

Doug Fertuck www.fertuck.com 248-881-3244

Pain MobilityTime/Cost/

Insurance

Total Score

7 6 2 15

5 4 2 11

3 2 1 6

3 2 6 11

5 4 8 17

5 4 6 15

6 6 6 18

4 3 6 13

Potential serious surgical

complications

Surgery still an option

Surgery still an option

Develop ways to managethe risk of your choice

Trade-off desirability vs. probability

Understand your risk toleranceto choose under uncertainty

Use decision trees to model the process

Understand the consequences of each outcome

Assign probabilities to each outcome

Define possible outcomesfor each uncertainty

Identify key uncertainties

Address Uncertainty If Necessary

Rethink the unsure judgments

Seek information as necessaryto make informed swaps

Simplify a complex decision the even swap method

Eliminate the dominated tradeoffs

Make the Necessary Tradeoffs

Understand if there is meaningful uncertainty

Seek judgments of others selectively

Use objective measures and scales as appropriate

Imagine yourself in the future as you assess

Assess each alternative against each objective(Consequences Table)

Describe the ConsequencesKnow when to quit

Gather data as appropriate

Seek other ideas after exhausting your own

Don't prejudge; challenge constraints

Develop a range of alternatives by thinking "how” to meet the objectives

Generate Alternatives

Clarify and test your thinking

Focus on ends not means

Brainstorm all your concerns and wishes

What do you really need and want?

Define the Objectivesor Decision Criteria

Be creative, expansive, and critical

Generate alternative problem definitions

Challenge the constraints

What is the "trigger” driving the need to make a decision?

Define the Decision Problem

Mind Map of Smart Decision Making

Doug Fertuck www.fertuck.com 248-881-3244

Make a Smart Decision

Checklist for the Decision Process

Are you defining the problem too narrowly?

Have you accurately defined all the important criteria?

Have you generated a wide range of alternatives?

Are you overlooking important consequences?

Are your evaluations of alternatives consistent?

Have you identified the key uncertainties?

Can you take action to manage risks?

Checklist of Common Psychological Traps

Are you favoring your first idea (“anchoring”)?

Are you inclined to keep doing what you are doing?

Are you protecting an earlier decision (“sunk-cost”)?

Do you want to jump to something completely different (“throwing the baby out with the bathwater”)?

Are you slanting probabilities and estimates “just to be safe”?

Are you being overly influenced by rare, dramatic events?

Are you ignoring relevant information?

Are you seeing patterns in random events?

Focus of Breakout Session

Apply the lessons of the market and product analysis

Breakout Mini-Project

1. Define a decision problem2. Identify the decision criteria3. Note which are the 3 most

important criteria and why?4. Share results with a buddy5. Present to entire group (if chosen)

5 min

5 min

5 min

Tips for BreakoutProblem statement

Understand the “trigger” or driver of the decision

Question constraints or “can’t dos” Generate alternative problem definitionsBe creative and expansive

Criteria or ObjectivesWhat do you really need and want?Brainstorm all your wishes and concernsFocus in ends not meansImagine the future and test you thinking

Joan Florian, TTX Ingenuity LLCDoug Fertuck, Fertuck Enterprise Directions