ICT - Decision Making supplimental

Well after many weeks of blogging about decision making and having learnt a lot about how we make decisions and about myself in general I feel I am a better manager and all round person for having participated in this part of the course.

I've enjoyed reading all of the blogs and even more so the additional material that has gone along with it.

I'm sure most would agree that from task 1 through to task 5 the posts have progressively got better and better as have the actual blogs themselves as we all get more familiar with Google blogging.

Thanks again everyone, have a great break and see you all back in class in a few weeks.

Task 5 - Contemporary technology responses

This is the last post we have to make and for this task we read two articles Managers and their not-so rational decisions and Managing Overconfidence and were asked to discuss the two most interesting things we learnt and ways in which we could look to reduce over-confidence in decision making at our workplace.

The two things I found most interesting were the influence of ego on overconfidence even when making large high risk decisions, as evidenced by William Smithburg’s disastrous decision to purchase Snapple (Trevis Certo, Connelly & Tihanyi, 2008). Also the realisation about the biases that are clearly evident even in my own decision making and I experience prospect theory such as when I feel a possible loss or negative result and I instinctively lean towards one choice. I have realised this and have to consciously work against it. Having the knowledge that it is a human trait and a natural phenomenon of decision making, has helped me to recognise this with more clarity and as a result be more mindful of the decisions I make and why.

Alternately, according to Overconfidence It depends on how, what, and whom you ask, these biases are not necessarily as clear cut as some research would suggest. Klayman, Soll, Gonzalez-Vallejo & Barlas suggest that there are differing levels of bias based upon factors such as knowledge or experience of a subject, how much investment a person has in a decision or how certain they are about their ability to make the right choice. This could be summarised as people are not sure enough when they are very unsure and they are too sure when they are very sure.

Just recently I received a phone call from one of our sales guys who was on the road to a key new client asking me about a rate reduction for a tender and I had to make the decision on the spot. That clearly forced me to use system 1 decision making but required a system 2 result. Have a look at Stanovich & Wests attached article for more info on system 1 and 2. Moving on, I had to sort through all of the outcomes in a short period of time and weigh up the options for an acceptable outcome, clear satisficing. On one hand rejecting the reduction could mean losing the contract whereas accepting the reduction could result in running the project at a loss. That being said I quickly made a choice then went back to my desk and ran the numbers to confirm my decision one way or the other. As it turns out over the life of the project it was well within tolerance and all being said a good decision.

Having read the required text I thought a good suggestion for my work would be to make sure that when we develop a new product, the releasing manager should not be the same as the developing manger. According to studies this would help reduce the ego and personal investment needed for the product to be developed from continuing through to marketing and sales if the product was not up to scratch or showing signs of losing profit. According to the evidence of overconfidence shown in the text, separating these two functions would therefore help to reduce the ego knock that may result from releasing a bad product and a stop decision could be made opposed to throwing good money after bad.

I’ll leave you with a nice blog post I found that most would find interesting and certainly worth the time to read. 4 top tips for making business decisions

Task 5 - Shaun

Addition to task 1 Blog

Hey guys

Following on from Steve's comment regarding the fence build project I undertook and blogged about for Task 1, here are some pictures of the finished project.

It's 18m long but as you can see from picture 2,  we also added 2 extra panels to the font.

Task 4 - Methodologies and tools for solving complex problems.

For this task I decided to use a recent problem that I have been dealing with at work. The problem is that the services consultants are discovering priority one product issues on client sites and as a result, major product issues are being exposed to the clients. 

In order to expand on the issue and attempt to come up with solutions to this problem, I called together a few key members of the services team to work through the issues and look for a resolution being;

• Snr Principle Consultant Oil and Gas
• Principle Consultant – Mining
• Snr Project Manager
• Snr Manager Professional Services

I decided to use Compendium from the CogNexus Institute (Click here for the web site) to visualise and document the process.

I ran two workshops across two Friday afternoons. The first was a workshop to bring all of the players together and kick-off the process I was undertaking. At the end of this meeting I asked each attendee to think about the issue over the week and think about how the issue relates to them in their particular role and to bring that info to next week’s meeting.

The second meeting was where the real work took place. We began by brainstorming ideas and issues on the white board for about five minutes to get our brains into problem solving mode and to get started with a clear idea of the actual issue. We then moved onto the compendium software on the projector as per the image below.

We determined that the issues were presented due to a number of factors such as:

• Developers not understanding what the product is used for.
• Overall client side inexperience within the product team.
• Test team not effectively uncovering product issues.
• Test team being unfamiliar with real world scenarios.
• Unstandardisd approach to client configurations making resolutions hard to diagnose.

We wanted to keep it really simple as suggested by Spenner and Freeman (Harvard Business Review, 2014), because we realised that being able to sell our ideas to the executive team would be mandatory if we wanted to instigate real change.

To that end we came up with four ideas for further discussion.

1. The Test team need to know more about real world systems.
2. We need to expose Product developers to client issues.
3. Product developers need to be more active with Services consultants.
4. Services consultants should have more influence over the scope of product testing.

We decided that setting up a client virtual machine in-house would allow us to cover off many of the areas exposed in the list below with no input required from other departments.

• Demonstrating to developers what a real system looks like.
• Utilising this system to run pre-site testing within the services team.
• Training services consultants on a standard client setup and making them pass a certification of sorts.
• Allowing the test team to optimise their testing against the system

We also realised that we would not be able to make the necessary changes independently. So as a follow on action, we will also be proposing to the heads of the other departments, to form a fortnightly meeting comprising of decision makers from all of the departments in order to discuss issues and attempt to work together, to further investigate these issues and agree on solutions to them.

Upon reflection of the tool I used, I felt that it really helped to organise our thoughts, stimulated opposing and supporting feedback and self documented the results. I would recommend using such tools to others faced with problems that require group involvement.

References

Harvard Business Review,. (2014). To Keep Your Customers, Keep It Simple. Retrieved 14 September 2014, from http://hbr.org/2012/05/to-keep-your-customers-keep-it-simple/ar/1

Task 4 Comment - Makali

Task 3 - Decision making issues – uncertainty, biases, in personal and group decision making

When writing this task we were asked to consider both personal and group decision making.

First we should consider personal decision making and the theories and practices that encompasses that. I decided to do a bit of academic research for this task and found a number of interesting articles that covered many aspects of decision making covered in class. There was one particular blog post I found that while not a direct contributor to decision making per se, it does open the mind to some interesting concepts that I believe influence us as individuals and when working in a tight knit group. 

This particular article is taken from Poor Richards Almanack and discusses the theory that if two or more people spend enough time together they begin to form joint neurological patterns of behaviour and thought (Poor Richard's Almanack 2.0, 2014). This is best expressed by way of knowing what a person will say before they say it or being able to finish another person's sentence for them. This suggests that while we may be happily making our own personal decisions, we may in effect be merely expressing the thoughts of the group or a significant other.



I recently had to make a decision to accept or turn down a particular contract for my company. While there were many stakeholders in the decision, it was ultimately my responsibility and the outcome mine to own. I must admit I felt somewhat uncomfortable and had very little time to sort through all the outcomes. As discussed by (Finucane et al., 2000) and (Peters et al., 2006), the perceived risks and benefits of a decided outcome can play a substantial role on the decision that we make. Even to the point where one can subconsciously frame outcomes into a more favourable light in order for the choice to be steered into a particular direction.

In order to avoid this kind of action I decided to take the process back to a more fundamental review of the facts and see if a decision would present itself. In this instance, to accept the contract on the basis of the agreement would have compromised the project methodology and the primary function of the services department. Alternatively, to not accept would mean giving up revenue. Although the methodology is able to be tailored, it is not open for compromise of its core values, being the successful delivery of projects to within given tolerances, neither is deviating from core business strategy of providing solutions not just body shopping. Now the decision has been made and I have had to defend my position to my superiors, I am able to do so on the premise of my argument that framed the outcome of the decision process.

The main discussion around group think was the distortions that are at play and which one I am most mindful of. Personally I am most disturbed by the lack of performance and innovation, however recent studies have shown that there are steps that can be taken to prevent these distortions. In their 2014 paper Thürmer, Wieber and Gollwitzer suggest that by clearly defining the expectations and planning upfront controls such as decision points or toll gates, many of the pitfalls surrounding small groups can be avoided or lessened (Thürmer, Wieber and Gollwitzer, 2014).

References

Finucane, M., Alhakami, A., Slovic, P. and Johnson, S. (2000). The affect heuristic in judgments of risks and benefits. Journal of behavioral decision making, 13(1), pp.1--17.

Peters, E., Vastfjall, D., Garling, T. and Slovic, P. (2006). Affect and decision making: A "hot" topic. Journal of Behavioral Decision Making, 19(2), pp.79--85.

Poor Richard's Almanack 2.0, (2014). Human Broadband Connections. [online] Available at: http://almanac2010.wordpress.com/2014/05/14/human-broadband-connections/ [Accessed 9 Sep. 2014].

Thürmer, J., Wieber, F. and Gollwitzer, P. (2014). Collective action control by goals and plans: applying a self-regulation perspective to group performance. Journal of Behavioral Decision Making.

 

Task 2 Inputs to decision making - data, information & knowledge; systems analysis.

Problem

Project Managers have to enter revenue forecast information into one system, while actual invoiced values come from another. These values are then reconciled monthly.

Issue

The issue is that this information is prone to inaccuracy and or entered late.

Reasons for inaccuracy

• Projects are tracked in Australia in AUD while the Resource Forecast has to be mapped in USD.
• Each month a snap shot is taken of live projects for the past month to be compared against actual revenue for the current month.
• There are multiple points where information and knowledge is put in and taken out.
• Any mismatch between the revenue forecast and the actual invoicing is flagged as an exception.
• Schedule changes and variations to projects affect actuals but may not be reflected in the forecast.

Looking at the process flow above, you can see where I have highlighted the points that are prone to error and the information and knowledge flows, both in and out. The diagram indicates that there are issues around currency conversion, the fact that known data or knowledge is entered in at the TS point and invoicing stages but then through the addition of ERP information, has to be re-analysed to again become knowledge.

Through analysing this process I have developed four possible options listed below and shown graphically in figure 2.

1. Change all local Australian systems to use USD. This has the risk of causing issues and confusion with invoicing and errors if values are mistakenly entered as AUD. The benefits are that currency conversion is removed.
2. Do nothing and leave the systems as is. There are no benefits to this choice, however there are also no additional risks involved.
3. Replace all systems with a single source of truth that can be used by all parties across the global organisation. This is easily the highest risk option as it would involve the introduction of a new system, training will be required and the costs could be high. This option also has the highest benefit as it will remove all inputs and outputs from disparate data sources and automated and contiguous workflows could be introduced.
4. Cover the issues with a procedural solution. This would be low risk in that no new technologies are introduced and the benefits are relatively high if the procedures are governed appropriately.

 

Conclusion

Balancing the risk/benefit of the options, I have chosen to take option four. This includes introducing procedures that need to be followed at certain times of the month, as well as a governance model to police these procedures. Additionally we can see that by transforming data into information and then knowledge, we get a much clearer view of the necessary decisions.

Task 2 comment - Teresiah

Task 1 - Decision Making Typologies

For this task I decided to use a recent decision I had to make in relation to new builds around the house. I live on a 1 acre property that has post and rail fencing only which offers no privacy. I had decided to build a retaining wall out the back of the house which is not actually required to retain but would be for aesthetics only. This decision was made purely on the spur of the moment in that something will need to be done out there. No real consideration was given to what to do or what we want to achieve from a living perspective.

After buying some materials my wife and I took a step back and considered a side fence that also needs to be built in order to gain some privacy from the neighbors. At this point I decided to attempt to utilize some decision making techniques as covered in the decision making course.

To that end I utilized Simon’s Normative model of decision making which consists of:

·       Intelligence

·       Design

·       Choice

·       Implementation

First we needed some information of the choices and discussed the pros and cons of both builds and talked about what benefits we would gain from them as illustrated in the table below with a point value of 1 for yes and 0 for no.

Then we moved onto design of the builds. This incorporated items such as the bill of materials, size and shape, future maintenance and overall aesthetics. For the retaining we decided to incorporate higher posts that would allow us to include a banister to prevent falls over the edge of the retaining. Alternatively for the fence we looked at size of palings, height and length of the fence. I used an excel sheet as attached to run scenarios of design to help with this.

We then made the decision to go with the fence build as all the indicators pointed that it was the most appropriate. We started the build this weekend looking at completing the implementation over the next 3 weekends.

Task 1 - Julia
Task 1 - Gunjan