Decision Making Skills

Introduction
 
We use our decision making skills to solve problems by selecting one course of action from several possible alternatives. Decision making skills are also a key component of time management skills.
 
Decision making can be hard. Almost any decision involves some conflicts or dissatisfaction. The difficult part is to pick one solution where the positive outcome can outweigh possible losses. Avoiding decisions often seems easier.
 
Decision Making Skills
 
Yet, making your own decisions and accepting the consequences is the only way to stay in control of your time, your success, and your life. If you want to learn more on how to make a decision, here are some decision making tips to get you started.
 
A significant part of decision making skills is in knowing and practicing good decision making techniques.

Some Decision Making Steps
 
A significant part of decision making skills is in knowing and practicing good decision making techniques. One of the most practical decision making techniques can be summarized in those simple decision making steps:
 
Some Decision Making Steps
 
1. Identify the purpose of your decision
What is exactly the problem to be solved? Why it should be solved?  
 
2. Gather information.
What factors does the problem involve?
 
3. Identify the principles to judge the alternatives.
What standards and judgement criteria should the solution meet? nbsp;
 
4. Brainstorm and list different possible choices.
 
5. Evaluate each choice in terms of its consequences.
Use your standards and judgement criteria to determine the cons and pros of each alternative.
 
6. Determine the best alternative.
This is much easier after you go through the above preparation steps.
 
7. Put the decision into action.
Transform your decision into specific plan of action steps. Execute your plan.
 
8. Evaluate the outcome of your decision and action steps.
What lessons can be learnt? This is an important step for further development of your decision making skills and judgment.
 
Final remark. In everyday life we often have to make decisions fast, without enough time to systematically go through the above action and thinking steps. In such situations the most effective decision making strategy is to keep an eye on your goals and then let your intuition suggest you the right choice.

Pareto Analysis
 
Pareto analysis is a very simple technique that helps you to choose the most effective changes to make.
 
It uses the Pareto principle - the idea that by doing 20% of work you can generate 80% of the advantage of doing the entire job*. Pareto analysis is a formal technique for finding the changes that will give the biggest benefits. It is useful where many possible courses of action are competing for your attention.
 
Pareto Analysis
 
How to Use the :
 
To start using the , write out a list of the changes you could make. If you have a long list, group it into related changes.
 
 
Then score the items or groups. The scoring method you use depends on the sort of problem you are trying to solve. For example, if you are trying to improve profitability, you would score options on the basis of the profit each group might generate. If you are trying to improve customer satisfaction, you might score on the basis of the number of complaints eliminated by each change.
 
Then score the items
 
The first change to tackle is the one that has the highest score. This one will give you the biggest benefit if you solve it.
 
The options with the lowest scores will probably not even be worth bothering with - solving these problems may cost you more than the solutions are worth
 
Example:
 
A manager has taken over a failing service center. He commissions research to find out why customers think that service is poor. .
 
He gets the following comments back from the customers:
 
1. Phones are only answered after many rings.
2. Staff seem distracted and under pressure.
3. Engineers do not appear to be well organized. They need second visits to bring extra parts. This means that customers have to take more holiday to be there a second time.
4. They do not know what time they will arrive. This means that customers may have to be in all day for an engineer to visit.
5. Staff members do not always seem to know what they are doing.
6. Sometimes when staff members arrive, the customer finds that the problem could have been solved over the phone.
 
The manager groups these problems together. He then scores each group by the number of complaints, and orders the list:
 
•Lack of staff training: items 5 and 6: 51 complaints
•Too few staff: items 1, 2 and 4: 21 complaints
•Poor organization and preparation: item 3: 2 complaints
 
By doing the Pareto analysis above, the manager can better see that the vast majority of problems (69%) can be solved by improving staff skills.
 
Once this is done, it may be worth looking at increasing the number of staff members. Alternatively, as staff members become more able to solve problems over the phone, maybe the need for new staff members may decline.
 
It looks as if comments on poor organization and preparation may be rare, and could be caused by problems beyond the manager's control.
 
By carrying out a Pareto Analysis, the manager is able to focus on training as an issue, rather than spreading effort over training, taking on new staff members, and possibly installing a new computer system.
 
Pareto Analysis is a simple technique that helps you to identify the most important problem to solve.
 
To use it:
 
  • List the problems you face, or the options you have available
  • Group options where they are facets of the same larger problem
  • Apply an appropriate score to each group
  • Work on the group with the highest score
 
Pareto analysis not only shows you the most important problem to solve, it also gives you a score showing how severe the problem is.




Paired Comparison Analysis
 
Paired Comparison Analysis helps you to work out the importance of a number of options relative to each other. It is particularly useful where you do not have objective data to base this on.  
 
This makes it easy to choose the most important problem to solve, or select the solution that will give you the greatest advantage. Paired Comparison Analysis helps you to set priorities where there are conflicting demands on your resources. 
 
Paired Comparison Analysis
 
It is also an ideal  for comparing "apples with oranges" - completely different options such as whether to invest in marketing, a new IT system or a new piece of machinery. These decisions are usually much harder than comparing three possible new IT systems, for example.
 
How to Use the :
 
You can use this to compare each option with each other option, one-by-one. For each comparison, you will decide which of the two options is most important, and then assign a score to show how much more important it is.
 
Follow these steps to use the technique:
 
1. List the options you will compare. Assign a letter to each option.
2. Mark the options as row and column headings on the worksheet.
3. Note that the cells on the table where you will be comparing an option with itself have been blocked out - there will never be a difference in these cells!
4. The cells on the table where you will be duplicating a comparison are also blocked out.
5. Within the remaining cells compare the option in the row with the one in the column. For each cell, decide which of the two options is more important. Write down the letter of the more important option in the cell, and score the difference in importance from 0 (no difference) to 3 (major difference).
6. Finally, consolidate the results by adding up the total of all the values for each of the options. You may want to convert these values into a percentage of the total score.
 
Paired Comparison Analysis is a good way of weighing up the relative importance of different courses of action. It is useful where priorities are not clear, or are competing in importance.
It provides a framework for comparing each course of action against all others, and helps to show the difference in importance between factors.


Grid Analysis
 
Grid Analysis (also known as Decision Matrix analysisPugh Matrix analysis or MAUT which stands for Multi-Attribute Utility Theory) is a useful technique to use for making a decision. Decision matrices are most effective where you have a number of good alternatives and many factors to take into account.
 
How to Use the :
 
The first step is to list your options and then the factors that are important for making the decision . Lay the options out on the worksheet table, with options as the row labels, and factors as the column headings.
 
Grid Analysis
 
Next work out the relative importance of the factors in your decision. Show these as numbers. We will use these to weight your preferences by the importance of the factor. These values may be obvious.
 
The next step is to work your way across your table, scoring each option for each of the important factors in your decision. Score each option from 0 (poor) to 3 (very good). Note that you do not have to have a different score for each option - if none of them are good for a particular factor in your decision, then all options should score 0.
 
Now multiply each of your scores by the values for your relative importance. This will give them the correct overall weight in your decision.
 
Finally add up these weighted scores for your options. The option that scores the highest wins!
 
Example:
 
A windsurfing enthusiast is about to replace his car. He needs one that not only carries a board and sails, but also that will be good for business travel. He has always loved open-topped sports cars. No car he can find is good for all three things.
 
His options are:
 
• An SUV/4x4, hard topped vehicle
• A comfortable 'family car'
• A station wagon/estate car
• A sports car
 
Criteria that he wants to consider are:
 
The manager groups these problems together. He then scores each group by the number of complaints, and orders the list:
 
• Lack of staff training: items 5 and 6: 51 complaints
• Too few staff: items 1, 2 and 4: 21 complaints
• Poor organization and preparation: item 3: 2 complaints
 
Criteria that he wants to consider are:
 
• Cost
• Ability to carry a sail board at normal driving speed
• Ability to store sails and equipment securely
• Comfort over long distances
• Fun!
• Nice look and build quality to car
 
Firstly he draws up the table shown in Figure 1, and scores each option by how well it satisfies each factor:
 
Figure 1:  
 
Example Grid Analysis Showing Unweighted Assessment of How Each Type of Car Satisfies Each Factor
 
Factors:CostBoardStorageComfortFunLookTotal
Weights:       
Sports Car100133 
SUV/4x4032211 
Family Car221300 
Station Wagon233301 
 
Next he decides the relative weights for each of the factors. He multiplies these by the scores already entered, and totals them. This is shown in Figure 2:
 
Figure 2:
 
Example Grid Analysis Showing Weighted Assessment of How Each Type of Car Satisfies Each Factor
 
Factors:CostBoardStorageComfortFunLookTotal
Weights:451234 
Sports Car400291227
SUV/4x4015243428
Family Car810160025
Station Wagon815360436
 
This gives an interesting result: Despite its lack of fun, a station wagon may be the best choice.
 
If the wind-surfer still feels unhappy with the decision, maybe he has underestimated the importance of one of the factors. Perhaps he should weight 'fun' by 7!
 
Grid Analysis helps you to decide between several options, while taking many different factors into account.
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