Decision Making Process

You make decisions everyday irrespective of your position, type of work, experience and intellect. The end result is directly impacted by the quality of your decision. Hence it can be said that decision making is one of the important competence that you posses and would like to improve upon. 

Some decisions are of great importance and some are not so important but the underlying skills are the same so where is the difference? Difference is in the intensity and range of the decision making process that leads to the decision.

The main problem (or I would rather say the most important criteria) of decision making is the time crunch for the critical decisions. I prefer to call it a criteria rather than a problem because if time factor is a bane then it is also a boon for the decision making process. The time crunch forces you to act fast where you take shortcuts, jump on conclusions and rely heavily on your instinct. But the good point here is that, you at least reach to a decision, where if you are given no time constraint it is quite possible that you may deliberate too deep into each aspect that finally you may not even reach to any decision. And to add – Decision on time is indeed a decision. There are numerous examples of people around us who have made to the highest level purely relying on their gut and there are some who are not able to make decisions because they analyse situation to death.

Hence the time period within which you need to reach to a decision is one of the most important criteria and this is the factor that will influence your decision on the choice of your decision making process or model. 

The bottom line is that we have to make a decision, a good decision. One poor decision can lead to more and the compounded effect can be devastating.

It is not that decision making comes natural to us, it can be learned and improved upon like any other skill and it should be somewhere between the instinct and over analysis. 

As I have already discussed the other factor i.e. you, in my last post, now we have to learn and decide between the different decision making models. This is also a hell of task you would say – First we have to make a decision on how to make the decision. Although, it is funny but true. There are so many models and techniques for decision making that it can itself lead to indecisiveness.

I will briefly discuss three main Decision Making Models here. They are:-

1. The Vroom-Yetton-Jago Decision Model – Decide how to Decide
2.  OODA Loops – Understanding Decision Cycle
3. Kepner Tregoe Decision Making – Analysing Decisions

The Vroom-Yetton-Jago Decision Model 

  

Decide how to Decide

In decision making process, how to make a decision can have as many choices as the decision itself. 

The Vroom-Yetton-Jago Decision Model provides a useful framework for identifying the best leadership style to adopt for the situation you're in. The situations can depend on the factors like how important is the decision, do you have the required information, does your subordinates consensus, agreement or approval important, etc . etc. 

This model has been designed for the leaders in a professional environment but you can certainly improvise it according to any situation in day to day decision making. It is basically to decide upon the involvement of the other stakeholders of the decision. Let’s quickly understand how?

The Model

Your style and the degree of participation in your decision making will depend on three main factors:-

1.  Quality of Decision – How important is the impact of the outcome of the decision. Higher the quality, the more you should involve others in decision making. In day to day life for eg. You have buy a personal car or a family car, what to wear for the party tonight, where to go for vacation, where to invest etc.
2.  Subordinate Commitment – How important is that your team and others accept your decision? If it involves their destiny, their likes dislikes, their growth then you should increase the participation level. In day to day life, your family, friends and neighbours.
3. Time Constraints – How much time you have to make the decision. More the time at hand, more the luxury to participate others in the process.

This model distinguishes three styles of leadership in decision making or broadly speaking three styles of decision making along with their processes. They are:- 

Process/Style	Autocratic – You decide and inform others	Consultative – You take opinions from team and decide	Group/Collaborative – You and your team work together to reach a decision
A1	Use the information you already have
A2	Ask team for specific information
C1		Ask for individual opinions
C2		Discuss as a group and ask for suggestions
G2			The teams makes the decision as agreed by everyone

Now to determine which of these styles and processes is most appropriate there are a series of yes/ no questions you need to answer about the situation. They are altogether 7 questions and they have been depicted very beautifully in the below given chart for you to understand.

I think it would be a very interesting exercise to do. It is up to you to assess your situation according to the decision quality, others commitment and the time frame and decide upon the right style and process. This model is mainly for the managers and leaders but you can very well use it in your day to day decision making with only considering the team members as the people around you like your family, friends, neighbours, in fact anyone who can be affected.  In the beginning it may seem to be a very tedious process but with practice you can judge the situation in no time.

OODA Loops

Understanding the Decision Cycle

This model of decision making was developed by US Air Force Colonel John Boyd specially for Air Combat but it soon found relevance in the war like situation we face in business. Has the similarity of War and Business ever struck you? This model in its form is more prevalent in the cut throat business decisions but it is not that you cannot use this model of decision making. As it found prevalence in war like business decisions, similarly it can be applied as a  decision making process by anyone of us. Aren't we living in highly competitive age where each action of ours affect our competitor and each reaction is the effect of our competitor's action?


This model basically works on the ideology that decision making is not a one time process but a cycle which continuously moves and each step is revisited time and again. It gives us a wake up call on the fact that in this age of information revolution, what if the whole situation or information changes by the time we reach our decision?   


It also incorporates the time factor, not as a problem but as a stimulus for decision making. In a war like situation we need to act fast, faster than our competitor to be one step ahead and keep revisiting our strategy to update as the information, situation changes rapidly.


The Model



Called the OODA Loop, the model outlines a four-point decision loop that supports quick, effective and proactive decision-making. The four stages are:

1. Observe – collect current information from as many sources as practically possible.
2. Orient – analyze this information, and use it to update your current reality.
3. Decide – determine a course of action.
4. Act – follow through on your decision.

You continuously cycle through this Loop by observing the result of your action,  does it achieve what was intended, revisiting and revising the initial decision and move to the next action.

The key to this model is the speed . The speed and accuracy with which you observe and orient the information and make the decision to act upon. All the steps here are a continuous process as you have to have your senses open to new information and simultaneously orient them to revise the initial decision to take next action.   

It improves your analytical skill and to be proactive, to think ahead. 

This model can be used when there is a war like situation and speed is the key to success but I think the cycle or the loop concept can be incorporated with other models also as it gives you a field to improve upon your decision and even push the action further.

Kepner Tregoe Decision Making 

Analysing Decisions

Kepner Tregoe decision making is a structured methodology for gathering information and prioritizing and evaluating it. It was developed by Charles H. Kepner and Benjamin B. Tregoe in the 1960s.


This is the most rational method on the block and is respected by the business and corporate circle. The most important aspect of this model is the assessment and prioritization of the negative effects of the decisions.


So, rationally thinking, the idea is to find not the perfect solution but the best possible solution with the least adverse effect. It is being marketed as unbiased way of decision making as it limits the conscious and unconscious biases that may divert attention from the final outcome.

There are four basic steps when decision making Kepner Tregoe style:

• Situation appraisal - is used to clarify the situation, outline concerns and choose a direction
• Problem analysis - here the problem is defined and it's root cause determined
• Decision analysis - alternatives are identified and a risk analysis done for each
• Potential problem analysis - the best of the alternatives is further scrutinized against potential problems and negative consequences and actions are proposed to minimize the risk. 

Now the Analysis

• First write the desired result in an elaborative statement.
• List out what the result:-

           - Should give (objectives)

           - is expected to give (desired objectives)

           - is to have as limits  

• Rank the objectives and assign relative weights

OBECTIVE	WEIGHT
A	5
B	4
C	8
D	3

• List out all possible course of action
• Score each alternative course of action against the objectives on the possibility scale, then multiply the scores with the objective weight and total the score to get the final weighted score of each alternative.

OBJECTIVE	WEIGHT	ALTERNATIVE 1 POSSIBILITY SCORE	WEIGHTED SCORE
A	5	5	25
B	4	6	24
C	8	5	40
D	3	8	24

                        Final Weighted score of Alternative 1 = 113

       Repeat this for each alternative course of action

• Select the top three Alternatives, consider all their negative effects, then rate their probability of occurring and significant effect, multiply this and total all to get the final score for each chosen alternative.

NEGATIVE EFFECT	PROBABILITY	SIGNIFICANCE	WEIGHTED SCORE
A	4	7	28
B	2	3	6
C	7	5	35

                          Final Negative Weighted Score of Alternative 1 = 69

       Repeat this for each chosen alternative course of action.

• Analyze the weighted score versus the adversity rating for each and choose the high-scoring one.

It can be used where there can be number of alternate decisions and their consequences and it is rather difficult and confusing to consider the best possible alternative. The step wise process gives an easy method to remove all the confusion and think about each alternative and consequence on at a time. 

Though it is said to be unbiased approach but somebody has to give the ratings.  

Conclusion

To conclude I would say that I have discussed only three models out here which I think will cover all the situations that we find ourselves into while taking decisions. You can find numerous other decision making models but the most important aspect that I want to highlight is that which ever model you choose its you who will be common in all situations. All these models will be a part of you with time and practice and your instinct will give out more rational decisions.