Kinds of Decisions There are several basic kinds of decisions.

1. Decisions whether. This is the yes/no, either/or decision that must be made before we proceed with the selection of an alternative. Should I buy a new TV? Should I travel this summer? Decisions whether are made by weighing reasons pro and con. The PMI technique discussed in the next chapter is ideal for this kind of decision. It is important to be aware of having made a decision whether, since too often we assume that decision making begins with the identification of alternatives, assuming that the decision to choose one has already been made. 2. Decisions which. These decisions involve a choice of one or more alternatives from among a set of possibilities, the choice being based on how well each alternative measures up to a set of predefined criteria. 3. Contingent decisions. These are decisions that have been made but put on hold until some condition is met. For example, I have decided to buy that car if I can get it for the right price; I have decided to write that article if I can work the necessary time for it into my schedule. OR even, We'll take the route through the valley if we can control the ridge and if we detect no enemy activity to the north. Most people carry around a set of already made, contingent decisions, just waiting for the right conditions or opportunity to arise. Time, energy, price, availability, opportunity, encouragement--all these factors can figure into the necessary conditions that need to be met before we can act on our decision. Some contingent decisions are unstated or even exist below the awareness of the decision maker. These are the type that occur when we seize opportunity. We don't walk around thinking, "If I see a new laser printer for $38, I'll buy it," but if we happen upon a deal like that and we have been contemplating getting a new printer, the decision is made quickly. Decisions made in sports and warfare are like this. The best contingent and opportunistic decisions are made by the prepared mind--one that has thought about criteria and alternatives in the past.
Decision Making is a Recursive Process A critical factor that decision theorists sometimes neglect to emphasize is that in spite of the way the process is presented on paper, decision making is a nonlinear, recursive process. That is, most decisions are made by moving back and forth between the choice of criteria (the characteristics we want our choice to meet) and the identification of alternatives (the possibilities

we can choose from among). The alternatives available influence the criteria we apply to them, and similarly the criteria we establish influence the alternatives we will consider. Let's look at an example to clarify this.

Suppose someone wants to decide, Should I get married? Notice that this is a decision whether. A linear approach to decision making would be to decide this question by weighing the reasons pro and con (what are the benefits and drawbacks of getting married) and then to move to the next part of the process, the identification of criteria (supportive, easy going, competent, affectionate, etc.). Next, we would identify alternatives likely to have these criteria (Kathy, Jennifer, Michelle, Julie, etc.). Finally we would evaluate each alternative according to the criteria and choose the one that best meets the criteria. We would thus have a scheme like this: decision whether ... select criteria ... identify alternatives ... match criteria to alternatives ... make choice However, the fact is that our decision whether to get married may really be a contingent decision. "I'll get married if I can find the right person." It will thus be influenced by the identification of alternatives, which we usually think of as a later step in the process. Similarly, suppose we have arrived at the "identify alternatives" stage of the process when we discover that Jennifer (one of the girls identified as an alternative) has a wonderful personality characteristic that we had not even thought of before, but that we now really want to have in a wife. We immediately add that characteristic to our criteria. Thus, the decision making process continues to move back and forth, around and around as it progresses in what will eventually be a linear direction but which in its actual workings is highly recursive. Key point, then, is that the characteristics of the alternatives we discover will often revise the criteria we have previously identified. The Components of Decision Making
The Decision Environment Every decision is made within a decision environment, which is defined as the collection of information, alternatives, values, and preferences available at the time of the decision. An ideal decision environment would include all possible information, all of it accurate, and every possible alternative. However, both information and alternatives are constrained because the time and effort to gain information or identify alternatives are limited. The time constraint simply means that a decision must be made by a certain time. The effort constraint reflects the limits of manpower, money, and priorities. (You wouldn't want to spend three hours and half a tank of gas trying to find the very best parking place at the mall.) Since decisions must be made within this constrained environment, we can say that the major challenge of decision making is

uncertainty, and a major goal of decision analysis is to reduce uncertainty. We can almost never have all information needed to make a decision with certainty, so most decisions involve an undeniable amount of risk.

The fact that decisions must be made within a limiting decision environment suggests two things. First, it explains why hindsight is so much more accurate and better at making decisions that foresight. As time passes, the decision environment continues to grow and expand. New information and new alternatives appear--even after the decision must be made. Armed with new information after the fact, the hindsighters can many times look back and make a much better decision than the original maker,because the decision environment has continued to expand. The second thing suggested by the decision-within-an-environment idea follows from the above point. Since the decision environment continues to expand as time passes, it is often advisable to put off making a decision until close to the deadline. Information and alternatives continue to grow as time passes, so to have access to the most information and to the best alternatives, do not make the decision too soon. Now, since we are dealing with real life, it is obvious that some alternatives might no longer be available if too much time passes; that is a tension we have to work with, a tension that helps to shape the cutoff date for the decision. Delaying a decision as long as reasonably possible, then, provides three benefits: 1. The decision environment will be larger, providing more information. There is also time for more thoughtful and extended analysis. 2. New alternatives might be recognized or created. Version 2.0 might be released. 3. The decision maker's preferences might change. With further thought, wisdom, and maturity, you may decide not to buy car X and instead to buy car Y. And delaying a decision involves several risks: 1. As the decision environment continues to grow, the decision maker might become overwhelmed with too much information and either make a poorer decision or else face decision paralysis. 2. Some alternatives might become unavailable because of events occurring during the delay. In a few cases, where the decision was between two alternatives (attack the pass or circle around behind the large rock), both alternatives might become unavailable, leaving the decision maker with nothing. And we have all had the experience of seeing some amazing bargain only to hesitate and find that when we go back to buy the item, it is sold out.

3. In a competitive environment, a faster rival might make the decision and gain advantage. Another manufacturer might bring a similar product to market before you (because that company didn't delay the decision) or the opposing army might have seized the pass while the other army was "letting the decision environment grow."
The Effects of Quantity on Decision Making Many decision makers have a tendency to seek more information than required to make a good decision. When too much information is sought and obtained, one or more of several problems can arise. (1) A delay in the decision occurs because of the time required to obtain and process the extra information. This delay could impair the effectiveness of the decision or solution. (2) Information overload will occur. In this state, so much information is available that decisionmaking ability actually declines because the information in its entirety can no longer be managed or assessed appropriately. A major problem caused by information overload is forgetfulness. When too much information is taken into memory, especially in a short period of time, some of the information (often that received early on) will be pushed out.

The example is sometimes given of the man who spent the day at an information-heavy seminar. At the end of the day, he was not only unable to remember the first half of the seminar but he had also forgotten where he parked his car that morning. (3) Selective use of the information will occur. That is, the decision maker will choose from among all the information available only those facts which support a preconceived solution or position. (4) Mental fatigue occurs, which results in slower work or poor quality work. (5) Decision fatigue occurs where the decision maker tires of making decisions. Often the result is fast, careless decisions or even decision paralysis--no decisions are made at all. The quantity of information that can be processed by the human mind is limited. Unless information is consciously selected, processing will be biased toward the first part of the information received. After that, the mind tires and begins to ignore subsequent information or forget earlier information. (Have you ever gone shopping for something where you looked at many alternatives--cars, knives, phones, TVs-only to decide that you liked the first one best?)
Decision Streams A common misconception about decision making is that decisions are made in isolation from each other: you gather information, explore alternatives, and make a choice, without regard to anything that has gone before. The fact is, decisions are made in a context of other decisions. The typical metaphor used to explain this is that of a stream. There is a stream of decisions surrounding a given decision, many decisions made earlier have led up to this decision and made it both possible and limited. Many other decisions will follow from it.

Another way to describe this situation is to say that most decisions involve a choice from a group of preselected alternatives, made available to us from the universe of alternatives by the previous decisions we have made. Previous decisions have "activated" or "made operable" certain alternatives and "deactivated" or "made inoperable" others. For example, when you decide to go to the park, your decision has been enabled by many previous decisions. You had to decide to live near the park; you had to decide to buy a car or learn about bus routes, and so on. And your previous decisions have constrained your subsequent ones: you can't decide to go to a park this afternoon if it is three states away. By deciding to live where you do, you have both enabled and disabled a whole series of other decisions. As another example, when you enter a store to buy a DVD player or TV, you are faced with the preselected alternatives stocked by the store. There may be 200 models available in the universe of models, but you will be choosing from, say, only a dozen. In this case, your decision has been constrained by the decisions made by others about which models to carry. We might say, then, that every decision (1) follows from previous decisions, (2) enables many future decisions, and (3) prevents other future decisions. People who have trouble making decisions are sometimes trapped by the constraining nature of decision making. Every decision you make precludes other decisions, and therefore might be said to cause a loss of freedom. If you decide to marry Terry, you no longer can decide to marry Shawn. However, just as making a decision causes a loss of freedom, it also creates new freedom, new choices and new possibilities. So making a decision is liberating as well as constraining. And a decision left unmade will often result in a decision by default or a decision being made for you. It is important to realize that every decision you make affects the decision stream and the collections of alternatives available to you both immediately and in the future. In other words, decisions have far reaching consequences.
Concepts and Definitions 1. Information. This is knowledge about the decision, the effects of its alternatives, the probability of each alternative, and so forth. A major point to make here is that while substantial information is desirable, the statement that "the more information, the better" is not true. Too much information can actually reduce the quality of a decision. See the discussion on The Effects of Quantity on Decision Making above.

2. Alternatives. These are the possibilities one has to choose from. Alternatives can be identified (that is, searched for and located) or even developed (created where they did not previously exist). Merely searching for preexisting alternatives will result in less effective decision making. 3. Criteria. These are the characteristics or requirements that each alternative must possess to a greater or lesser extent. Usually the alternatives are rated on how well they possess each criterion. For example, alternative Toyota ranks an 8 on the criterion of economy, while alternative Buick ranks a 6 on the same criterion. 4. Goals. What is it you want to accomplish? Strangely enough, many decision makers collect a bunch of alternatives (say cars to buy or people to marry) and then ask, "Which should I choose?" without thinking first of what their goals are, what overall objective they want to achieve. Next time you find yourself asking, "What should I do? What should I choose?" ask yourself first, "What are my goals?" A component of goal identification should be included in every instance of decision analysis. 5. Value. Value refers to how desirable a particular outcome is, the value of the alternative, whether in dollars, satisfaction, or other benefit. 6. Preferences. These reflect the philosophy and moral hierarchy of the decision maker. We could say that they are the decision maker's "values," but that might be confusing with the other use of the word, above. If we could use that word here, we would say that personal values dictate preferences. Some people prefer excitement to calmness, certainty to risk, efficiency to esthetics, quality to quantity, and so on. Thus, when one person chooses to ride the wildest roller coaster in the park and another chooses a mild ride, both may be making good decisions, if based on their individual preferences. 7. Decision Quality. This is a rating of whether a decision is good or bad. A good decision is a logical one based on the available information and reflecting the preferences of the decision maker. The important concept to grasp here is that the quality of a decision is not related to its outcome: a good decision can have either a good or a bad outcome. Similarly, a bad decision (one not based on adequate information or not reflecting the decision maker's preferences) can still have a good outcome. For example, if you do extensive analysis and carefully decide on a certain investment based on what you know about its risks and your preferences, then your decision is a

good one, even though you may lose money on the investment. Similarly, if you throw a dart at a listing of stocks and buy the one the dart hits, your decision is a bad one, even though the stock may go up in value. Good decisions that result in bad outcomes should thus not be cause for guilt or recrimination. If you decide to take the scenic route based on what you know of the road (reasonably safe, not heavily traveled) and your preferences (minimal risk, prefer scenery over early arrival), then your decision is a good one, even though you might happen to get in an accident, or have a flat tire in the middle of nowhere. It is not justified to say, "Well, this was a bad decision." In judging the quality of a decision, in addition to the concerns of logic, use of information and alternatives, three other considerations come into play: A. The decision must meet the stated objectives most thoroughly and completely. How well does the alternative chosen meet the goals identified? B. The decision must meet the stated objectives most efficiently, with concern over cost, energy, side effects. Are there negative consequences to the alternative that make that choice less desirable? We sometimes overlook this consideration in our search for thrills. C. The decision must take into account valuable byproducts or indirect advantages. A new employee candidate may also have extra abilities not directly related to the job but valuable to the company nonetheless. These should be taken into account. 8. Acceptance. Those who must implement the decision or who will be affected by it must accept it both intellectually and emotionally. Acceptance is a critical factor because it occasionally conflicts with one of the quality criteria. In such cases, the best thing to do may be to choose a lesser quality solution that has greater acceptance. For example, when cake mixes first were put on the market, manufacturers put everything into the mix--the highest quality and most efficient solution. Only water had to be added. However, the mixes didn't sell well--they weren't accepted. After investigation, the makers discovered that women didn't like the mixes because using the mixes made them feel guilty: they weren't good wives because they were taking a shortcut to making a cake. The solution was to take the egg and sometimes the milk out of the mix so that the women would have something to do to "make" the cake other than just adding water. Now they had to add egg and perhaps milk, making them feel more useful. The need to feel useful and a contributor is one of the most basic of

human needs. Thus, while the new solution was less efficient in theoretical terms, it was much more acceptable. Cake mixes with the new formula became quite popular. Thus, the inferior method may produce greater results if the inferior one has greater support. One of the most important considerations in decision making, then, is the people factor. Always consider a decision in light of the people implementation. A decision that may be technologically brilliant but that is sociologically stupid will not work. Only decisions that are implemented, and implemented with thoroughness (and preferably enthusiasm) will work the way they are intended to.
Approaches to Decision Making There are two major approaches to decision making in an organization, the authoritarian method in which an executive figure makes a decision for the group and the group method in which the group decides what to do.

1. Authoritarian. The manager makes the decision based on the knowledge he can gather. He then must explain the decision to the group and gain their acceptance of it. In some studies, the time breakdown for a typical operating decision is something like this: make decision, 5 min.; explain decision, 30 min.; gain acceptance, 30 min. 2. Group. The group shares ideas and analyses, and agrees upon a decision to implement. Studies show that the group often has values, feelings, and reactions quite different from those the manager supposes they have. No one knows the group and its tastes and preferences as well as the group itself. And, interestingly, the time breakdown is something like this: group makes decision, 30 min.; explain decision, 0 min.; gain acceptance, 0 min. Clearly, just from an efficiency standpoint, group decision making is better. More than this, it has been shown many times that people prefer to implement the ideas they themselves think of. They will work harder and more energetically to implement their own idea than they would to implement an idea imposed on them by others. We all have a love for our own ideas and solutions, and we will always work harder on a solution supported by our own vision and our own ego than we will on a solution we have little creative involvement with. There are two types of group decision making sessions. First is free discussion in which the problem is simply put on the table for the group to talk about. For example,

Joe has been offered a job change from shift supervisor to maintenance foreman. Should he take the job? The other kind of group decision making is developmental discussion or structured discussion. Here the problem is broken down into steps, smaller parts with specific goals. For example, instead of asking generally whether Joe should take the job, the group works on sub questions: What are Joe's skills? What skills does the new job require? How does Joe rate on each of the skills required? Notice that these questions seek specific information rather than more general impressionistic opinions. Developmental discussion (1) insures systematic coverage of a topic and (2) insures that all members of the group are talking about the same aspect of the problem at the same time.
Some Decision Making Strategies As you know, there are often many solutions to a given problem, and the decision maker's task is to choose one of them. The task of choosing can be as simple or as complex as the importance of the decision warrants, and the number and quality of alternatives can also be adjusted according to importance, time, resources and so on. There are several strategies used for choosing. Among them are the following:

1. Optimizing. This is the strategy of choosing the best possible solution to the problem, discovering as many alternatives as possible and choosing the very best. How thoroughly optimizing can be done is dependent on A. importance of the problem B. time available for solving it C. cost involved with alternative solutions D. availability of resources, knowledge E. personal psychology, values Note that the collection of complete information and the consideration of all alternatives is seldom possible for most major decisions, so that limitations must be placed on alternatives. 2. Satisficing. In this strategy, the first satisfactory alternative is chosen rather than the best alternative. If you are very hungry, you might choose to stop at the first decent looking restaurant in the next town rather than attempting to choose the best restaurant from among all (the optimizing strategy). The word satisficing was coined by combining satisfactory and sufficient. For many small decisions, such as where to park, what to drink, which pen to use, which tie to wear, and so on, the satisficing strategy is perfect.

3. Maximax. This stands for "maximize the maximums." This strategy focuses on evaluating and then choosing the alternatives based on their maximum possible payoff. This is sometimes described as the strategy of the optimist, because favorable outcomes and high potentials are the areas of concern. It is a good strategy for use when risk taking is most acceptable, when the go-for-broke philosophy is reigning freely. 4. Maximin. This stands for "maximize the minimums." In this strategy, that of the pessimist, the worst possible outcome of each decision is considered and the decision with the highest minimum is chosen. The Maximin orientation is good when the consequences of a failed decision are particularly harmful or undesirable. Maximin concentrates on the salvage value of a decision, or of the guaranteed return of the decision. It's the philosophy behind the saying, "A bird in the hand is worth two in the bush." Quiz shows exploit the uncertainty many people feel when they are not quite sure whether to go with a maximax strategy or a maximin one: "Okay, Mrs. Freen, you can now choose to take what you've already won and go home, or risk losing it all and find out what's behind door number three." Example: I could put my $10,000 in a genetic engineering company, and if it creates and patents a new bacteria that helps plants resist frost, I could make $50,000. But I could also lose the whole $10,000. But if I invest in a soap company, I might make only $20,000, but if the company goes completely broke and gets liquidated, I'll still get back $7,000 of my investment, based on its book value. Example: It's fourth down and ten yards to go on your twenty yard line. Do you go for a long pass or punt? Maximax would be to pass; Maximin would be to punt.
Decision Making Procedure As you read this procedure, remember our discussion earlier about the recursive nature of decision making. In a typical decision making situation, as you move from step to step here, you will probably find yourself moving back and forth also.

1. Identify the decision to be made together with the goals it should achieve. Determine the scope and limitations of the decision. Is the new job to be permanent or temporary or is that not yet known (thus requiring another decision later)? Is the new package for the product to be put into all markets or just into a test market? How might the scope of the decision be changed--that is, what are its possible parameters?

When thinking about the decision, be sure to include a clarification of goals: We must decide whom to hire for our new secretary, one who will be able to create an efficient and organized office. Or, We must decide where to go on vacation, where we can relax and get some rest from the fast pace of society. 2. Get the facts. But remember that you cannot get all the facts. Get as many facts as possible about a decision within the limits of time imposed on you and your ability to process them, but remember that virtually every decision must be made in partial ignorance. Lack of complete information must not be allowed to paralyze your decision. A decision based on partial knowledge is usually better than not making the decision when a decision is really needed. The proverb that "any decision is better than no decision," while perhaps extreme, shows the importance of choosing. When you are racing toward a bridge support, you must decide to turn away to the right or to the left. Which way you turn is less important than the fact that you do indeed turn. As part of your collection of facts, list your feelings, hunches, and intuitive urges. Many decisions must ultimately rely on or be influenced by intuition because of the remaining degree of uncertainty involved in the situation. Also as part of your collection of facts, consult those who will be affected by and who will have to implement your decision. Input from these people not only helps supply you with information and help in making the decision but it begins to produce the acceptance necessary in the implementers because they feel that they are part of the decision making process. As Russell Ackoff noted in The Art of Problem Solving, not consulting people involved in a decision is often perceived as an act of aggression. 3. Develop alternatives. Make a list of all the possible choices you have, including the choice of doing nothing. Not choosing one of the candidates or one of the building sites is in itself a decision. Often a non decision is harmful as we mentioned above-not choosing to turn either right or left is to choose to drive into the bridge. But sometimes the decision to do nothing is useful or at least better than the alternatives, so it should always be consciously included in the decision making process. Also be sure to think about not just identifying available alternatives but creating alternatives that don't yet exist. For example, if you want to choose which major to pursue in college, think not only of the available ones in the catalog, but of designing your own course of study. 4. Rate each alternative. This is the evaluation of the value of each alternative. Consider the negative of each alternative (cost, consequences, problems created, time needed, etc.) and the positive of each (money saved, time saved, added creativity or happiness to company or employees, etc.). Remember here that the alternative that

you might like best or that would in the best of all possible worlds be an obvious choice will, however, not be functional in the real world because of too much cost, time, or lack of acceptance by others. Also don't forget to include indirect factors in the rating. If you are deciding between machines X, Y, and Z and you already have an employee who knows how to operate machine Z, that fact should be considered. If you are choosing an investigative team to send to Japan to look at plant sites and you have very qualified candidates A, B, and C, the fact that B is a very fast typist, a superior photographer or has some other side benefit in addition to being a qualified team member, should be considered. In fact, what you put on your hobbies and interests line on your resume can be quite important when you apply for a job just because employers are interested in getting people with a good collection of additional abilities. 5. Rate the risk of each alternative. In problem solving, you hunt around for a solution that best solves a particular problem, and by such a hunt you are pretty sure that the solution will work. In decision making, however, there is always some degree of uncertainty in any choice. Will Bill really work out as the new supervisor? If we decide to expand into Canada, will our sales and profits really increase? If we let Jane date Fred at age fifteen, will the experience be good? If you decide to marry person X or buy car Y or go to school Z, will that be the best or at least a successful choice? Risks can be rated as percentages, ratios, rankings, grades or in any other form that allows them to be compared. See the section on risk evaluation for more details on risking. 6. Make the decision. If you are making an individual decision, apply your preferences (which may take into account the preferences of others). Choose the path to follow, whether it includes one of the alternatives, more than one of them (a multiple decision) or the decision to choose none. And of course, don't forget to implement the decision and then evaluate the implementation, just as you would in a problem solving experience. One important item often overlooked in implementation is that when explaining the decision to those involved in carrying it out or those who will be affected by it, don't just list the projected benefits: frankly explain the risks and the drawbacks involved and tell why you believe the proposed benefits outweigh the negatives. Implementers are much more willing to support decisions when they (1) understand the risks and (2) believe that they are being treated with honesty and like adults.

Remember also that very few decisions are irrevocable. Don't cancel a decision prematurely because many new plans require time to work--it may take years for your new branch office in Paris to get profitable--but don't hesitate to change directions if a particular decision clearly is not working out or is being somehow harmful. You can always make another decision to do something else.

Decision-Making Steps
When in an organization and faced with a difficult decision, there are several steps one can take to ensure the best possible solutions will be decided. These steps are put into seven effective ways to go about this decision making process (McMahon 2007). The first step - Outline your goal and outcome. This will enable decision makers to see exactly what they are trying to accomplish and keep them on a specific path. The second step - Gather data. This will help decision makers have actual evidence to help them come up with a solution. The third step - Brainstorm to develop alternatives. Coming up with more than one solution ables you to see which one can actually work. The fourth step - List pros and cons of each alternative. With the list of pros and cons, you can eliminate the solutions that have more cons than pros, making your decision easier. The fifth step - Make the decision. Once you analyze each solution, you should pick the one that has many pros (or the pros that are most significant), and is a solution that everyone can agree with. The sixth step - Immediately take action. Once the decision is picked, you should implement it right away. The seventh step - Learn from, and reflect on the decision making. This step allows you to see what you did right and wrong when coming up, and putting the decision to use

A Systematic Approach to Decision Making

A logical and systematic decision-making process helps you address the critical elements that result in a good decision. By taking an organized approach, you're less likely to miss important factors, and you can build on the approach to make your decisions better and better. There are six steps to making an effective decision: 1. Create a constructive environment. 2. Generate good alternatives. 3. Explore these alternatives. 4. Choose the best alternative. 5. Check your decision. 6. Communicate your decision, and take action. Here are the steps in detail:

Step 1: Create a constructive environment

To create a constructive environment for successful decision making, make sure you do the following: Establish the objective - Define what you want to achieve.

Agree on the process - Know how the final decision will be made, including whether it will be an individual or a team-based decision. The Vroom-Yetton-Jago Model is a great tool for determining the most appropriate way of making the decision. Involve the right people - Stakeholder Analysis is important in making an effective decision, and you'll want to ensure that you've consulted stakeholders appropriately even if you're making an individual decision. Where a group process is appropriate, the decision-making group - typically a team of five to seven people - should have a good representation of stakeholders. Allow opinions to be heard - Encourage participants to contribute to the discussions, debates, and analysis without any fear of rejection from the group. This is one of the best ways to avoid groupthink. The Stepladder Technique is a useful method for gradually introducing more and more people to the group discussion, and making sure everyone is heard. Also, recognize that the objective is to make the best decision under the circumstances: it's not a game in which people are competing to have their own preferred alternatives adopted. Make sure you're asking the right question - Ask yourself whether this is really the true issue. The 5 Whys technique is a classic tool that helps you identify the real underlying problem that you face. Use creativity tools from the start - The basis of creativity is thinking from a different perspective. Do this when you first set out the problem, and then continue it while generating alternatives. Our article Generating New Ideas will help you create new connections in your mind, break old thought patterns, and consider new perspectives.

Step 2: Generate Good Alternatives

This step is still critical to making an effective decision. The more good options you consider, the more comprehensive your final decision will be. When you generate alternatives, you force yourself to dig deeper, and look at the problem from different angles. If you use the mindset there must be other solutions out there,' you're more likely to make the best decision possible. If you don't have reasonable alternatives, then there's really not much of a decision to make! Here's a summary of some of the key tools and techniques to help you and your team develop good alternatives. Generating Ideas Brainstorming is probably the most popular method of generating ideas. Another approach, Reverse Brainstorming, works similarly. However, it starts by asking people to brainstorm how to achieve the opposite outcome from the one wanted, and then reversing these actions. The Charette Procedure is a systematic process for gathering and developing ideas from very many stakeholders. Use the Crawford Slip Writing Technique to generate ideas from a large number of people. This is an extremely effective way to make sure that everyone's ideas are heard and given equal weight, irrespective of the person's position or power within the organization. Considering Different Perspectives The Reframing Matrix uses 4 Ps (product, planning, potential, and people) as the basis for gathering different perspectives. You can also ask outsiders to join the discussion, or ask existing participants to adopt different functional perspectives (for example, have a marketing person speak from the viewpoint of a financial manager). If you have very few options, or an unsatisfactory alternative, use aConcept Fan to take a step back from the problem, and approach it from a wider perspective. This often helps when the people involved in the decision are too close to the problem. Appreciative Inquiry forces you to look at the problem based on what's going right,' rather than what's going wrong.' Organizing Ideas This is especially helpful when you have a large number of ideas. Sometimes separate ideas can be combined into one comprehensive alternative.

Use Affinity Diagrams to organize ideas into common themes and groupings.

Step 3: Explore the Alternatives

When you're satisfied that you have a good selection of realistic alternatives, then you'll need to evaluate the feasibility, risks, and implications of each choice. Here, we discuss some of the most popular and effective analytical tools. Risk In decision making, there's usually some degree of uncertainty, which inevitably leads to risk. By evaluating the risk involved with various options, you can determine whether the risk is manageable.

Risk Analysis helps you look at risks objectively. It uses a structured approach for assessing threats, and for evaluating the probability of events occurring - and what they might cost to manage.

Implications Another way to look at your options is by considering the potential consequences of each. Six Thinking Hats helps you evaluate the consequences of a decision by looking at the alternatives from six different perspectives. Impact Analysis is a useful technique for brainstorming the unexpected' consequences that may arise from a decision. Validation Determine if resources are adequate, if the solution matches your objectives, and if the decision is likely to work in the long term.

Starbursting helps you think about the questions you should ask to evaluate an alternative properly. To assess pros and cons of each option, use Force Field Analysis, or use the Plus-MinusInteresting approach. Cost-Benefit Analysis looks at the financial feasibility of an alternative. Our Bite-Sized Training session on Project Evaluation and Financial Forecasting helps you evaluate each alternative using the most popular financial evaluation techniques.

Step 4: Choose the Best Alternative

After you have evaluated the alternatives, the next step is to choose between them. The choice may be obvious. However, if it isn't, these tools will help: Grid Analysis, also known as a decision matrix, is a key tool for this type of evaluation. It's invaluable because it helps you bring disparate factors into your decision-making process in a reliable and rigorous way. Use Paired Comparison Analysis to determine the relative importance of various factors. This helps you compare unlike factors, and decide which ones should carry the most weight in your decision. Decision Trees are also useful in choosing between options. These help you lay out the different options open to you, and bring the likelihood of project success or failure into the decision making process.

For group decisions, there are some excellent evaluation methods available. When decision criteria are subjective and it's critical that you gain consensus, you can use techniques like Nominal Group Technique and Multi-Voting. These methods help a group agree on priorities, for example, so that they can assign resources and funds. The Delphi Technique uses multiple cycles of anonymous written discussion and argument, managed by a facilitator. Participants in the process do not meet, and sometimes they don't even know who else is involved. The facilitator controls the process, and manages the flow and organization of information. This is useful where you need to bring the opinions of many different experts into the decision-making process. It's particularly useful where some of these experts don't get on!

Step 5: Check Your Decision

With all of the effort and hard work that goes into evaluating alternatives, and deciding the best way forward, it's easy to forget to sense check' your decisions. This is where you look at the decision you're about to make dispassionately, to make sure that your process has been thorough, and to ensure that common errors haven't crept into the decision-making process. After all, we can all now see the catastrophic consequences that over-confidence, groupthink, and other decision-making errors have wrought on the world economy. The first part of this is an intuitive step, which involves quietly and methodically testing the assumptions and the decisions you've made against your own experience, and thoroughly reviewing and exploring any doubts you might have. A second part involves using a technique like Blindspot Analysis to review whether common decision-making problems like over-confidence, escalating commitment, or groupthink may have undermined the decision-making process. A third part involves using a technique like the Ladder of Inference to check through the logical structure of the decision with a view to ensuring that a well-founded and consistent decision emerges at the end of the decision-making process.

Step 6: Communicate Your Decision, and Move to Action!

Once you've made your decision, it's important to explain it to those affected by it, and involved in implementing it. Talk about why you chose the alternative you did. The more information you provide about risks and projected benefits, the more likely people are to support the decision. And with respect to implementation of your decision, our articles on Project Management and Change Management will help you get this implementation off to a good start!

Decision Making Tips

1. Write down each option to be considered, and make a list of pros and cons for each one. Find out which options have the most desirable pros and the most bearable cons and then make your choice based on what is best for you. It might help to have a few goals worked out for you life it the decisions involve changing lifestyle. 2. Get some experience, if possible, in terms of some of your options. If you're trying to figure out whether you want to join a circus or a freak show, do some job shadowing. Follow around the bearded lady and the Siamese twins and see if what they do seems like an ideal career. Try the circus too; see how well you can get across the tightrope, or if the lions seem friendly. Determine which experience is more motivating or beneficial. 3. Evaluate the possible outcomes and consequences of each alternative. If you want to buy an exotic pet with your work bonus, imagine what life will be like with each possible animal. A leopard would make a great pet and would be more awesome than any guard dog, but also remember it will probably destroy your couch and maybe even eat you and your neighbors. A whale would make a neat pet too, but good luck finding a bathtub big enough to hold one. 4. Listen to your gut. If some options just do not seem right, then don't consider them. Unless you have been indulging in substances, your intuition is usually right about letting you know if something seems amiss. If your gut tells you buying the latest technology device every week is not the best use of your money, think about other methods of satisfying your need to have the latest and greatest. 5. Research. If you don't have enough information on all your options to make an informed decision, do some research. If you're afraid of the water, but feel your life's dream is to be a fisherman, you might want to do a little more reading on what the job necessitates. 6. Narrow the options. Don't be afraid to trim down your options. Some choices are just plain not right for you as an individual, so rule them out. If you allow them to be considered, you might involuntarily convince yourself that one of the bad choices isn't so bad after all. This is because of that human quirk that makes us sometimes crave the forbidden. If you're a diabetic and you're trying to figure out what to do next weekend, ruling out the cupcake-eating contest at the local fair would be one of your first choices. 7. Don't overanalyze. Try not to over-think your decision. If you have to sit down for three hours and debate the merits of one type of coffee over another, you're overdoing things. Thinking too far into certain options might end in making a wrong choice, so look at the options but keep it simple if the decision is not a big one. If you are a procrastinator, don't wait till tomorrow to read the overcoming procrastinationarticle. 8. Consider alternatives. Finally, consider a back-up plan if the decision is a major one, just in case your choice does have negative results. If you decide to sell your car because it is getting too expensive to run it, have some money stashed away for public transport or for contributing to the car pool. Better still, see if you can arrange a trial period without your car to see how you cope .