Fig. 1-1©2008 CSM

Making Project Decisions

The noblest of pleasure is the joy of understandingLeonardo De Vinci

Life’s

Fig. 1-2©2008 CSM

Two skills critical to the quality of life are:

Parenting

Decision Making

Two skills critical to the quality of life are:

Parenting

Decision Making

Decision Issues - 1

Formal training in either is rareFormal training in either is rare

Fig. 1-3©2008 CSM

A Fit Decision Maker

Understands the decision significance Has the right decision statement Knows the proper frame and the associated

selection criteria Knows the amount of uncertainty Knows the information required and how to

get it Is skilled in the right decision process Is able to manage peer group biases Is emotionally centered and fit to make the

decision

Understands the decision significance Has the right decision statement Knows the proper frame and the associated

selection criteria Knows the amount of uncertainty Knows the information required and how to

get it Is skilled in the right decision process Is able to manage peer group biases Is emotionally centered and fit to make the

decisionFit Decision Maker

Fig. 1-4©2008 CSM

Systems Engineering Decisions

Requirements Determination Concept Selection Architecture Selection Interface Definition Specification Quantification Requirements Flowdown Lower Level Concepts and

Architectures Verification Plans Validation Plans Anomaly Resolution Etc.

Requirements Determination Concept Selection Architecture Selection Interface Definition Specification Quantification Requirements Flowdown Lower Level Concepts and

Architectures Verification Plans Validation Plans Anomaly Resolution Etc.

Fig. 1-5©2008 CSM

Decision Significance and Uncertainty

Significance of Decision Consequence

Un

cert

ain

ty

Selecting A New

Restaurant

Selecting A Beverage To

Drink

Open Heart Surgery By World’s Best

Surgeon

Critical Decision Zones

First Customer for Bungee

Jumping With New Company

Fig. 1-6©2008 CSM

High Uncertainty and High Consequence Example

Accident ruling over bungee jump death Feb 25 2005Evidence from an inquest into the horrific death of a 22-year-old Welsh student at a charity jump raises safety concerns for jumpers across the UK. Chris Thomas plunged to his death after leaping from a 180ft crane in the car park of a pub in Swansea. An inquest heard yesterday that Chris weighed 132kg. But an expert investigation discovered that the rope holding him had a maximum load weight of just 90kg, and should not have safely held more than 70kg.

Fig. 1-7©2008 CSM

Two Relevant Questions

We want to make good decisions, so what is a “good decision?”

We want to make good decisions, so what is a “good decision?”

How are decisions and consequences related?

How are decisions and consequences related?

Fig. 1-8©2008 CSM

A Good Decision A good decision is an alternative selection based on

sound logic and relevant information (the head factor) and the selection is consistent with ethics based instincts (the heart factor)

A good decision selects the alternative with the best chance of achieving the opportunity (outcome) given the information available at the time

Decision processes provide guidance to achieving a logical selection

A good decision is an alternative selection based on sound logic and relevant information (the head factor) and the selection is consistent with ethics based instincts (the heart factor)

A good decision selects the alternative with the best chance of achieving the opportunity (outcome) given the information available at the time

Decision processes provide guidance to achieving a logical selection

Fig. 1-9©2008 CSM

Outcomes (Consequences)

A good decision can result in a good or bad outcome A bad decision can result in a good or bad outcome Criticism of a good decision that resulted in bad

outcome is unjustified, but it is common, especially by sports commentators

A good decision can result in a good or bad outcome A bad decision can result in a good or bad outcome Criticism of a good decision that resulted in bad

outcome is unjustified, but it is common, especially by sports commentators

Fig. 1-10©2008 CSM

What is a Decision?

Application of opportunity-seeking judgment resulting in action

– Decisions may or may not be binding

– Consequences may or may not be permanent

– Actions may include unmanageable risk

Application of opportunity-seeking judgment resulting in action

– Decisions may or may not be binding

– Consequences may or may not be permanent

– Actions may include unmanageable risk

People judge themselves by their best intentions Others judge people by their worst action

People judge themselves by their best intentions Others judge people by their worst action

.F

Fig. 1-11©2008 CSM

There Are A Variety Of Alternative Judgment Methods

8. Probability Based8. Probability Based

7. Fact Based7. Fact Based

6. Expert Based6. Expert Based

1. Indifference Based1. Indifference Based

5. Intuition Based5. Intuition Based

4. Emotion Based4. Emotion Based

3. Addiction Based3. Addiction Based

2. Authority/Peer Pressure Based

2. Authority/Peer Pressure Based

Fig. 1-12©2008 CSM

Judgment Process Suitability

Defensible for business decisions

Not suitable for business decisions

4 and 5 may influence the final selection

8. Probability Based8. Probability Based

7. Fact Based7. Fact Based

6. Expert Based6. Expert Based

1. Indifference Based1. Indifference Based

5. Intuition Based5. Intuition Based

4. Emotion Based4. Emotion Based

3. Addiction Based3. Addiction Based

2. Authority/Peer Pressure Based

2. Authority/Peer Pressure Based

Evidence BasedEvidence BasedEvidence BasedEvidence Based

Fig. 1-13©2008 CSM

My Younger Brother Takes on Governor Arnold Schwarzenegger!

Stockton RecordFront page,22 September 2006

Gov. Arnold Schwarzenegger and Lodi Resident Byng Forsberg

The point is…What’s hard about decisions? Communication and language.

My younger brother is older than I am.

Fig. 1-14©2008 CSM

Defensible Decision Processes

Increasing Uncertainty Of Relevant Decision Information

Requires uncertainty and value attitude knowledge

Decision Tree Analysis

8

High Uncertainty Probability Based

Bayesian Team Support

Requires beliefs, alternatives, preferences

Expert Decides

6

Expert Based

Instant decisionInformed

Judgment

Kepner Tregoe (KTA) Analysis

Analytical Hierarchy Process (AHP) aka Pairwise Comparison Analysis

7

Low Uncertainty Fact Based

Pugh’s Method

Prioritize, Weighted Scores & Other Factors

Prioritize, Weight, and Rate +, 0, -

Dominance Analysis

Consequence Table and Even Swaps

Prioritize, Weighted Scores & Other Factors

Rank Summing

Sums relative criteria rankings

Fig. 1-15©2008 CSM

Kepner Tregoe Form - Example

Decision Statement:

Evaluation Criteria:

Musts (Go/No-Go):

Wants:

Max Score (10xW):

Total Score:

Alternative 1 Alternative 2 Alternative 3 Alternative 4

Score Score Score ScoreWeight Comments Raw Comments Raw Comments Raw Comments Raw

( R ) ( R ) ( R )( R ) R*WR*W R*W R*W

Car

“I believe that this nation should commit itself to achieving this goal, before this decade is

out, of landing a man on the moon and returning him safely to earth”

President John F Kennedy, May 25, 1961

“I believe that this nation should commit itself to achieving this goal, before this decade is

out, of landing a man on the moon and returning him safely to earth”

President John F Kennedy, May 25, 1961

Fig. 1-17©2008 CSM

Kepner Tregoe - Example

Decision Statement:

Evaluation Criteria:

Musts (Go/No-Go):

Wants:

Max Score (10xW):

Total Score:

Alternative 1 Alternative 2 Alternative 3 Alternative 4

Score Score Score ScoreWeight Comments Raw Comments Raw Comments Raw Comments Raw

( R ) ( R ) ( R )( R ) R*WR*W R*W R*W

Domestic Car Japanese Sports Car Domestic Minivan Italian Sports Car

Under $25,000Transport 5 People

Fuel economy

Good acceleration

Crash Safety

Carry Garden Supplies

26.2 MPG

10.5 sec

High Ratings

Small capacity

20.0 MPG

7.0 sec

Avg. Ratings

Large Capacity

8

6

10

9

370

10

3

2

10

80

18

20

90

248

6

10

10

7

48

60

100

63

Good for dates (16 yo.) “Cool image” Conservative4 10 40 6 24

295

YYY NYNY N

Select the best vehicle to meet the needs of the Patrick family. (Mom, dad, and three kids, ages 5 to 16)

Max Score = Sum of Weights X 10

May wish to “normalize” so that max score is 100 or 1000

Fig. 1-18©2008 CSM

Evaluate Other Factors That Can Influence The Selection

For the highest scoring alternatives evaluate other factors

– Factors not evaluated

– New evidence

– Emerging opportunities

– Emerging risks

Incorporate actions to enhance opportunities and mitigate risks

Re-score candidates Make informed selection

For the highest scoring alternatives evaluate other factors

– Factors not evaluated

– New evidence

– Emerging opportunities

– Emerging risks

Incorporate actions to enhance opportunities and mitigate risks

Re-score candidates Make informed selection

TROUBLE! People in my path!

Fig. 1-19©2008 CSM

Other Factors Evaluation – Kepner-Tregoe Example

Decision Statement:

Evaluation Criteria:

Musts (Go/No-Go):

Wants:

Max Score (10xW):

Alternative 1 Alternative 2 Alternative 3 Alternative 4

Score

Weight Comments

Domestic Car Japanese Sports Car

• Under $25,000

26.2 MPG avg. 10

Y

Select the best vehicle to meet the needs of the Patrick family. (Mom, dad, and three kids, ages 5 to 16)

Domestic Minivan Italian Sports Car

• Transport 5 people Y

Y

Y

Y

N N

N

• Fuel Economy

• Good acceleration

• Carry garden supplies

• Crash safety

• Good for dates (16 yo)

3

2

10

10

Raw(R) R*W

8

6

10

9

4

80

18

20

90

40

10.5 sec

Small capacity

High ratings

“Cool image”

Score

Comments

20.0 MPG avg. 6

10

10

7

6

Raw(R) R*W

48

60

100

63

24

7.0 sec

Large capacity

Ave. Ratings

Conservative

Score

CommentsRaw(R) R*W

Score

CommentsRaw(R) R*W

Total Score:

370

248 295

Issue IssueP PS SResidual Risk

P = Probability

S = Seriousness

H = High

M = Medium

L = Low

1. If reliability does not improve from last year’s model (as dealer promised), the car will require service more often

2. If family size is increased sedan will not be large enough

1. Recent crash tests reveal poor occupant protection and new owners reporting below advertised gas mileage

H L

L H

H H

Mid-Size Domestic Domestic Minivan

Selected

The decision process is not complete until other factors have been considered.

The highest scoring candidate may not be the best choice.

The decision process is not complete until other factors have been considered.

The highest scoring candidate may not be the best choice.

Fig. 1-20©2008 CSM

Success in Decision Making in Capability-Based Acquisition Concepts

Customer involvement

– Concurs in problem statement

– Reviews and concurs with criteria and weights

– Understands options (which include favored approach, if known)

– Reviews final results before, not after, the presentation

Your management support when needed Clear presentation of results

– Use graphic display of numeric data whenever possible

– Use KTA Matrix whenever possible

– Use tabular display of numeric data as supporting info

Customer involvement

– Concurs in problem statement

– Reviews and concurs with criteria and weights

– Understands options (which include favored approach, if known)

– Reviews final results before, not after, the presentation

Your management support when needed Clear presentation of results

– Use graphic display of numeric data whenever possible

– Use KTA Matrix whenever possible

– Use tabular display of numeric data as supporting info

Fig. 1-21©2008 CSM

Questions?

Comments?

Discussion?