Jane: I don't know for certain what the weather is like, so maybe it's best if you omit my score. John: I agree with Mary about the climate and will note a 6. They subtract from and get a Decision Value of Because the number is positive, the family realizes that—all things considered—the basic opinion of the group is that they should relocate.
If the value had been negative 13 , the family might have interpreted this as meaning variously that they should not go, or that there wasn't much reason not to go. If the value had been negative , it would likely have caused them to consider to rethink their plans entirely.
Simply having arrived at a Decision Value, however, is not enough to make a decision. At this stage, something very important must be done: the family must decide who will make the final decision. This step will address the issue of whether each participant is in a position to make decisions independently.
It is often the case that not everyone in the decision making process will have an equal say. For instance, a person may be involved whose opinions matter but might carry less practical weight relative to the final decision. In such circumstances, openly establishing the ground rules allows the person to understand that there is a difference between whether their opinions matter and to what extent and whether they get to make the final decision.
This helps manage expectations and validates their need to understand why something is happening. In our example, this description might apply to Jane, who as the junior member of the family might not be a logical choice to make the final decision even though her input was treated equally because her opinions merited this consideration. In the workplace, this description might apply to a junior member of the project team. In any case, the final interpretation of the Decision Value and other gut level factors—see below , as well as subsequent actions to be taken, will lie with the individual or individuals designated by the group to decide.
Openly agreeing who has final decision making authority before the final decision is rendered is a necessary means of obtaining buy-in from participants. A participant will only truly support a decision made by another when the participant has agreed to cede decision making authority up front.
In the absence of such agreement, the participant may feel as if: 1 their opinions were solicited but discounted, and 2 they are being forced to do something against their will. A group may decide to cede final authority to the consensus opinion of the group.
The decision concerning who will make the final call can be done before the previous steps or afterwards. Let's assume in this case that Mary is chosen to make the final call. Before this occurs, however, there is one more thing to do…. Let's face it, human beings are not machines, and all of the qualification and quantification described won't eliminate all risk from the decision making process even though the hard numbers arrived at also reflect, in part, the subjective deliberations of the group.
To be sure, the more salient factors are considered, the more reliable the Decision Value may ultimately be. However, no individual or group of individuals can say that they have thought of everything or considered every possibility; and therefore the Decision Value must be viewed as intrinsically flawed although still useful as a data point. An intuitive counterbalance is needed—one that provides the opportunity for the participants to ignore logic and simply express their gut feelings about what should be done.
Thus the following might occur next:. When responses have been provided, the designated decision maker must take this input, along with the Decision Value and any other factors that might be considered relevant, and make a decision. There is no specific technique I am aware of that can be used to do this. If the entire group will make the decision, then the reflection and analysis required will occur in open forum until closure is achieved.
All participants must accept that in either making the final decision or ceding that responsibility to someone else, each and every person must personally accept ultimate and individual accountability for the results: there can be no blaming of others should things not work out later on.
After evaluating the above approach, the reader may consider it to be overly complex and opt to employ a simpler strategy. As stated earlier, there are many ways to tackle the challenge of deciding important matters, and it is impossible to say whether any given approach is better than another for any specific person or group of persons.
What the best approach might be is up to an individual to decide. In making important decisions, however, I would note the following:. The technique described may be used with any number of participants including only a single individual , and can be applied to decisions of varying degrees of importance and complexity.
It can be a very useful means of clarifying issues, achieving consensus, and identifying the right path forward for the benefit of all involved. Article Complexity , Decision Making 1 October By Brokman-Meltzer, Mor Perez, Dikla Gelbard, Roy Perceived complexity is a factor when project managers adopt suboptimal work plans, even when optimal plans are readily accessible. By Viturro, Leonor Today's constantly changing world presents companies with the challenge of answering rapidly to uncertain and fluctuating scenarios.
Traditional organizational structures and decision-making…. Article Decision Making , Governance 1 February Case Study Decision Making 1 December Zhu, Jianbo Sheng, Zhaohan The goal of this study is to identify, classify, explore, and understand decision-making complexity in infrastructure projects. Article Decision Making 1 December Learning Library. Project management decision making blending analysis and intuition.
How to cite this article: Cohen, C. Project management decision making: blending analysis and intuition. Accomplished and competent project managers usually possess the ability to make informed, timely, and effective project decisions. This paper examines a three-step decision-making technique that integrates objective fact-based analysis with subjective human-centric input, a technique that can help project managers make effective project decisions more quickly, make decisions that lead to their project team delivering a project that achieves its expected outcomes.
It describes the foundation of this technique, one that allows for open discussion by using a structured framework, one that defines the question, perfects the question, and answers the question, one that enables participants to quantify and reconcile intuition-based factors so that they arrive--as a group--at a decision that is both accurate and supported by all participants.
It then discusses the process for implementing using this framework by describing a hypothetical example involving one family's struggle to decide whether they should relocate so that a parent can accept a promotion. It concludes by recommending five ideas to consider when making decisions. Abstract The ability to make informed, timely, and effective decisions is a key competency of the project manager.
Introduction As project managers, every day each of us is required to make decisions—both large and small. The example is personalized to enable fuller discussion of subjective issues, but the technique described might also be applied to typical workplace challenges, including: Deciding whether to bet on a new technology with improved features but unproven track record, or remain with an established technology with fewer features but a proven track record Evaluating a candidate for a position on the project team Determining the correctness of a response to a cost or schedule overrun, a quality issue, or an instance of scope creep Examining the merit of a proposed change in methodology Background The following case study considers the deliberations of a family whose members are John, Mary, and Jane—Jane being the child of John and Mary.
The Process Step 1: Define the Question The first step in tackling the above decision is to clearly write down the question that must be answered from the perspective of those who must answer it.
Should we decide not to go? No value judgments are made at this point. No prioritizations are made. The goal is simply to get every thought down as it arises. John: OK, let's move on… And so on…. And so on…. The return column in the table gives these three alternatives. Regardless of the cost of building the prototype, the next node is the BID node.
The conditional probability table, Table 2, assigns probabilities to the various outcomes. In some cases there is no given information. For example, the probabilities of an expensive, moderate, or inexpensive prototype are 0. The payoff table, Table 3, assigns returns to various outcomes. As an integral component of a decision support system, decision analysis software should take a problem as posed in the above tables and make some sense out of it.
For starters, one would hope to obtain the decisions that optimize the return based on some measure of performance. One possibility is to identify the course for the decision maker that maximizes the expected value of the return.
See Raiffa for a discussion of the use of expected value of the return as a performance measure. The decisions are to either build or not build a prototype and to either submit a high or low bid.
It shows the optimal decisions, in the sense of maximizing the expected value of the return. The branches indicate the optimal decisions. In this case the expected return from building a prototype is which is larger than the expected return of if no prototype is built. As a result, the program recommends building the prototype.
If the decision maker decides not to build the prototype anyway, the tree shows that the preferred decision is to make a low bid which results in an expected return of Similarly, the tree shows the types of bids that should be submitted if the prototype is built and each of the three possible prototype cost outcomes are realized.
With all analytical tools, the value of the solution is only as good as the value of the data and information that went into forming that solution. This certainly can be said for decision analysis. Perhaps the greatest value of this tool is in forcing structure on the problem and in enabling the manager to examine the sensitivity of the decisions to changes in assumptions. Although this approach provides the greatest flexibility, it can be very tedious and can lead to misunderstandings unless care is taken in interpreting the results.
Several tools for sensitivity analysis have been developed to aid in understanding the decision problem. Two quantities that can be useful are called the value of perfect information and the value of perfect control. The value of perfect information answers the question: What is the value of knowing the outcome of a chance node before a decision is made? For example, what is the value of knowing that the bid will be accepted before the bid is submitted?
An unethical question which won't be debated here. The value of perfect information is an upper bound on the amount that could be spent profitably to improve data on which of the possible outcomes will occur. On the other hand, the value of perfect control for the build prototype chance node might be useful. It would tell us the value of controlling the cost of the prototype before the decision to build the prototype is made.
It is given automatically by the software not shown here and in this case has the value of This indicates the maximum amount to spend to obtain control over the cost of the prototype. There are many other quantities for measuring model sensitivity which can give the prudent decision maker confidence in his or her decision.
Another extension to decision, analysis incorporates the managers attitudes towards risk into the model. The simple expected value criterion assumes that the decision maker is risk neutral. In some cases it is preferable to make decisions in a risk averse position. That is, biasing decisions toward avoiding highly risky ventures even though they may have a large payoff in favor of more likely but lower returns. This facility is captured using utility theory and maximizing the expected utility of the return rather than its expected value.
To describe it correctly, you have to collect quality, verified, and updated information, taking into account the starting point and what you want to achieve when you solve it.
The third step is to determine the origin of the problem and identify possible alternatives to solve it. Something very important to find these possible alternatives is that you focus on the solution and not on the problem. When you know the main or root cause of a problem, that is, the cause that originates it, you can give it a solution.
It is the moment to open your mind and not reject any of the options that may occur to you; If you work in a team, encourage creative thinking in the group, as this will allow you to develop more options. For each of the options that arise, think about the positive and negative consequences they may have, the time and resources you will need to put them into practice, etc. You must do it objectively and realistically. Finally, after weighing the different options, you will have to implement the solution that you consider most appropriate.
Depending on its magnitude, you will have to think in terms of an action plan, dates, processes, monitoring system, etc.
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