Decision Making
Decision Making
Decision Making
What would you do?
What may seem like a clear answer to Leslie may not be the best approach to arriving at the
best business decision. In order for Leslie to make the best decision, she needs to
assemble a group that will first concentrate on understanding why their current process is
costly and inefficient and then will explore possible alternatives for improving the process.
The group should consist of engineers as well as people outside her department; for
example, someone from manufacturing and possibly sales. Including people with diverse
backgrounds and areas of expertise will help her make a more informed decision. Once the
team identifies the underlying reasons for the issue they are facing, they should then
generate and evaluate a number of alternatives for resolving the issue. Although Leslie's
inclination is to solve the problem a certain way, she should look for information and
evaluate options that support alternative solutions. By involving others and evaluating a
wide range of options, Leslie will increase her chances of making a successful decision.
In this topic, you'll learn how to manage the decision-making process to improve your
ability to make effective business decisions.
Topic Objectives
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David A. Garvin
Decision-Making Overview
Many managers tend to view decision making as an event—a choice to be made at a single
point in time, usually by an individual or a small group. In reality, however, significant
decisions are seldom made in the moment by one manager or in one meeting. Important
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decisions, such as changing the strategic direction of a group or hiring a new manager,
typically require time and input from many individuals and sources of information
throughout an organization. Hence, decision making can more accurately be viewed as a
process.
Managers who recognize decision making as a process increase their likelihood of making
more effective decisions. Why? Because by taking time they are able to identify and assess
the issues associated with making the decision. By involving others, they weigh different
perspectives and deepen the discussion. Perhaps most important, taking a process-driven
approach is more likely to lead to broader acceptance of the decision—and to more
effective implementation.
Key Idea
Managers who recognize decision making as a group process that unfolds over time
increase their likelihood of making more effective decisions. Why? Because by devoting
time to the process, they are able to identify and assess the issues associated with making
the decision.
By involving others, they weigh different perspectives and deepen the discussion.
Perhaps most important, taking a process-driven approach is more likely to lead to broader
acceptance of the decision—and to more effective implementation.
Phase 1: Establishing a context for success is the point at which you set the
parameters for the decision making process. You'll decide who should be involved and
how you'll operate as a group.
Phase 2: Assessing the situation and choosing a course of action is when you
determine the root cause of the issue you are trying to resolve and discuss possible
solutions. By the end of this phase, your group should reach a decision.
Phase 3: Communicating and implementing the decision is the final stage, during
which you notify stakeholders of your group's decision and take steps to put it into
action.
Keep in mind that this topic addresses business decisions that are important and far-
reaching. It assumes that such decisions cannot be made effectively by one individual
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operating in a vacuum. However, many of the general principles conveyed in this topic can
be applied to smaller decisions that, for whatever reasons, need to be made without group
input.
In this phase, you create the framework for making an effective decision. This phase
includes:
Setting the stage: First, you select participants and decide where to hold your
meetings. Next, you determine the approach you will take to reach a decision—will
you aim for consensus or vote by majority? During the meetings, especially the
earliest ones, you set the tone for the group by encouraging open dialogue and
promoting healthy debate.
Recognizing obstacles: Certain individual biases and group dynamics can be obstacles
in the decision-making process. By predicting and recognizing these tendencies, you
can take steps to avoid them.
Once you have established a context for your meetings, you are ready to manage the
decision-making process. This phase includes:
Effective executives know that decision making has its own systemic process
and its own clearly defined elements.
—Peter Drucker
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After you and your team make a decision, the challenge is to put it into action. This phase
includes:
Communicating the decision: You decide who should be notified of your decision and
communicate it effectively.
Implementing the decision: You determine what tasks will be required to put the
decision into action, assign resources, and establish deadlines.
Participants
Key stakeholders: These are the people most directly affected by the decision or who
have a stake in the decision. You need their buy-in to put the decision into effect.
Since they are more likely to support a decision they helped make, include them early
in the process to ensure an efficient implementation.
Experts: Experts can educate the group and provide information about the feasibility
of various options. Keep in mind that you may need more than one area of expertise
represented in your group.
Opponents: If you are aware of individuals who may oppose the decision and block its
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Ideally, your group should be small in size, preferably between five and seven members.
Depending on the complexity of the decision at hand, you may want to involve as many as
ten or as few as two people in the decision-making process.
Setting
To help your group generate creative solutions to problems and evaluate them critically,
choose diverse settings for your meetings. Such settings might include conference rooms
that you don't typically work in, off-site locations, or a familiar location with the furniture
rearranged to facilitate face-to-face discussion. When people are removed from traditional
settings, such as a boardroom or a supervisor's office, they tend to speak more freely
because they feel less constrained by office hierarchies.
Approach
Key Idea
Once you've selected the participants and chosen a setting for your meetings, the next step
is to determine what decision-making approach you will take. The group you assemble
needs to understand up front the process it will follow and how the final decision will be
made. The spectrum of group decision-making approaches includes four general types:
Consensus is a type of approach in which all team members meet together to discuss
the proposal openly and strive to reach agreement, with everyone accepting the final
decision.
Majority is a type of approach in which the group votes and the majority rules. The
team leader may elect to break a tie, if necessary.
Qualified consensus is an approach by which the team tries to reach a collective
agreement, but if it is unable to do so, the team agrees that the team leader makes
the decision.
Directive leadership is an approach often best-suited to particular situations. Because
of the nature of the decision or its time frame, in a directed leadership approach, the
leader makes the decision and then informs the group of the decision that was made.
A crisis or sudden unexpected emergency is a classic example of when this approach
might be necessary.
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These approaches, with the exception of directive leadership, vary in the extent that they
empower the participants and create a sense of responsibility within the group. Be aware,
however, that regardless of approach, when a group is trying to find areas of agreement, it
may avoid exploring minority viewpoints. Your job is to encourage exploration of all ideas,
regardless of the approach you will take to make the decision.
Climate
While the participants, setting, and approach change depending on the decision at hand,
you need to create a consistent climate, or tone, for all your meetings. The climate you
establish strongly influences how members of your team interact with one another.
A manager at a software development company has been charged with assigning limited
resources to the firm's current projects. The manager calls a meeting with all of her project
leaders to discuss how the resources will be allocated. The discussion quickly turns into an
argument. Each project leader advocates for his or her project. The debate gets heated as the
conversation goes around in circles, and each project leader disparages the others' efforts.
Ultimately, the manager decides to assign the limited resources to three projects. The project
leaders leave the meeting exhausted and frustrated.
What went wrong in this example? The manager did not manage the decision-making
process effectively and the meeting deteriorated into an advocacy mode. The project
leaders viewed the meeting as a competition. They advocated for their positions without
considering the needs of other departments or the company as a whole. In advocacy
situations, people tend to offer only the information that supports their case and omit
details that might weaken it. As a result, the discussion can quickly deteriorate into
personal attacks, giving rise to negative emotions.
In a perfect world, decisions would be made using an inquiry approach—an open process in
which individuals ask probing questions, explore different points of view, and identify a
wide range of options with the goal of reaching a decision that the group creates and owns
collectively. In an inquiry mode, individuals set aside their personal opinions or preferences
in order to arrive at a decision that is best for the group or organization.
The following table illustrates the advocacy approach versus the inquiry approach to
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decision making:
Advocacy Inquiry
While inquiry is an ideal, it is seldom met in practice. It is extremely difficult for individuals
to discuss ideas or issues without expressing their opinions. A more realistic and effective
technique for arriving at a decision is one that balances advocacy with inquiry. Group
members leave their personal agendas behind and enter the meeting with the intention of
acting as unbiased participants. They may advocate for a position they feel strongly about,
but they also inquire into other viewpoints and consider alternatives. They understand that
the goal is to find the best solution for the group as a whole, even if it means that some
individuals in the group might be negatively impacted by the decision. Generally, in well-
balanced sessions, people share information freely and consider multiple alternatives.
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During a recent discussion, Sales Manager Marcy seemed frustrated by views that
opposed the majority. Is Marcy setting a climate that induces advocacy or inquiry?
Advocacy
Inquiry
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No matter whose suggestion was accepted as the solution, Tom would require the entire
team to be accountable for implementation. Is Tom setting a climate that induces
advocacy or inquiry?
Advocacy
Inquiry
During Jessica's presentation, she made sure to present both sides of the argument for
going ahead with the process changes. Is Jessica setting a climate that induces advocacy
or inquiry?
Advocacy
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Inquiry
At the last meeting, Susan felt that it was necessary to be defensive of her ideas about
the merger. Is Susan setting a climate that induces advocacy or inquiry?
Advocacy
Inquiry
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While discussing his project's status with team members, John made sure to consider
their feedback on his progress. Is John setting a climate that induces advocacy or
inquiry?
Advocacy
Inquiry
Recognizing Obstacles
Individual biases
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Bias toward the familiar and toward past successes. We tend to base our decisions on
events and information that are familiar to us.
For example, a manager remembers her launch of a new product in Spain three years
ago; it was her first big marketing success. She also vaguely remembers that a similar
launch strategy was unsuccessful in a number of other countries. Because her memories
of the successful Spanish launch are so vivid, she emphasizes this experience and
discounts the evidence of unsuccessful launches elsewhere. When she tries to extend a
new brand into Portugal, her efforts fail. While the strategy used for the Spanish launch
may have been a good starting point, her reliance on a prior success led to incorrect
assumptions about the Portuguese market.
For example, a manager purchases a software package offered by the largest vendor
without collecting competitive bids. He assumes that because the package works for
other users in the same industry, it will work for him. He fails to investigate other
software packages that might better meet his needs.
Bias toward the status quo. We have a tendency to resist major deviations from the
status quo.
For example, people at a company may be familiar with how to use a particular computer
program and resist using an alternative, even though their program is outdated. Their
resistance may be driven more by their reluctance to learn something new than by the
quality of the system itself.
Bias toward confirming our opinion. Once we form an opinion, we typically seek out
information that supports our viewpoint and ignore facts that may challenge it.
For example, a manager searches the Internet to find data supporting her preference for
focus groups in market research, but does not stop to read information that supports
other approaches.
The most proactive way of preventing these biases from adversely impacting your decision-
making ability is to recognize them.
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Jared's team has been discussing how to handle a manufacturing flaw in their recently
launched children's learning software.
Jared said, "So the software has a flaw in a lesser-used module that will cause the user's
computer to lock up. As a team, we want to make sure we take care of the customer,
while also keeping our expenses at a reasonable level. Dan has proposed that we send
out official notice of the problem and offer those customers a way to download a patch
for free. What are your thoughts?"
Reba said, "We've always handled this sort of problem by pushing a patch to every client
who purchased the software. Why wouldn't we just do that in this case?"
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Kaitlyn said, "After considering both Dan and Reba's solutions, Dan's sounds like the
best. It would solve the problem for those customers who were bothered by it and I'm
sure it would save the company more money."
Not the best choice. Kaitlyn is supporting Dan's new idea for a
solution, not suggesting that they return to the old way of
doing things.
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Dan said, "I did some reading this morning, and I read an article where Software, Inc.
did this exact same thing – and they were successful."
Not the best choice. Dan is not just accepting his opinion at
face value; he has sought out an outside source to support his
viewpoint.
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Jared's team meets again to discuss another issue. This time, it is regarding a research
aid program the company markets to high school and college students.
Jared said, "The executive team thinks that the next update of the program ought to
have several more features. In particular, they think an new component that allows
users to compare notes online would be a great selling point."
Kaitlyn said, "The online component sounds great. Just look at all the networking sites
that have achieved success in recent years. The Business Times has been saying all year
what a lucrative field online networking is."
Not the best choice. Kaitlyn is in favor of the plan for change,
not resisting it.
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Reba said, "Whatever we do, we certainly do have to update the product. Users will only
accept the same old product for so long."
Not the best choice. Reba is making a case for change here, not
resisting it.
Not the best choice. The problem here is that Reba has not
used any information to support her assumption, not that she
has uncritically accepted information that supports her opinion.
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Dan said, "Who says that every product needs to be updated frequently? We designed
this product to do certain things, and we need to stick with that."
Not the best choice. Dan is not accepting the executive team's
assumptions at face value; rather, he is rejecting them without
consideration.
Not the best choice. Dan is not using any information here to
support his opinion.
Group dynamics
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One of the advantages to treating decision making as a group process is that individual
biases can be counteracted by the presence of multiple voices and perspectives.
But while groups offer different viewpoints, they need guidance to be productive. Your
challenge is to manage the group decision-making process. Otherwise, you may find
yourself confronted with one of the following extremes.
Excessive group harmony: Excessive group harmony occurs when individuals want to
be accepted in a group or they lack interest in the process.
"Groupthink." This results when participants' desire for agreement overrides their
motivation to evaluate alternative options. In this situation, people tend to
withhold their opinions, especially if their views differ from those of the group
leader. They make little effort to obtain new information from experts, and they
selectively filter information to support their initial preferences. They may spend
a lot of time inquiring about what others in the group want so that the solution
they reach will make everyone happy.
Lack of interest. Similar results can occur when participants lack interest in the
process or do not feel empowered. If the group feels that the leader has already
made the decision, they may go along with it, refuse to participate entirely, or
accept the first reasonable alternative that is proposed in an effort to end the
process.
Excessive individualism: Excessive individualism is at the opposite end of the
spectrum from excessive group harmony. In this situation, individuals engage in
aggressive advocacy, placing stakes in the ground, relentlessly arguing their positions.
They disregard the opinions of other group members and fail to consider the common
good.
Extreme behaviors can lengthen the decision-making process and interfere with making
good decisions. Your job as a manager is to keep your decision-making group on track so
they do not head toward either of these extremes.
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New Age Electronics, a toy manufacturer, has a customer support phone line to answer
customer questions about assembling its products. The volume of phone calls has increased
so much that the phone support associates cannot keep up with the demand. Customers have
complained of waiting half an hour to get help. The manager responsible for the support line
puts together a team to help him decide how to address the issue. He begins the first meeting
by saying: "We have a serious problem with our customer support line. Customers are waiting
too long for service. We need to fix it."
By framing the issue as a problem with the phone line response time, the team will most likely
focus on ways to reduce the response time—for example, adding more phone lines, adding
more phone representatives, or increasing the hours of service. These solutions will address
the symptoms of the problem—overloaded phone lines—but may not address the root of the
problem.
To get to the root of the problem, the team should be thinking about why customer calls have
increased dramatically. Is one product in particular responsible for an inordinate number of
calls? Is there a flaw in the design of a product, or in the assembly instructions? Are the phone
support associates poorly trained? Suppose the manager had framed the issue by saying: "We
have a serious problem with our customer support line. The volume of calls has increased,
customers are waiting too long for service, and we need to find out why. Then we need to
decide what to do about it." The focus of the team would be quite different.
To ensure that you get to the core of a problem, perform a root cause analysis. This is a
process in which you repeatedly make a statement of fact and ask the question: "Why?"
For example, the general manager of a pizza parlor noticed that he was losing sales because
his home deliveries were slower than his competitor's. His friend suggests that they invest in a
fleet of delivery vehicles to solve this problem. Instead of jumping to this conclusion, the
manager asks: "Our pizza deliveries are slow. Why? Our delivery associates drive old cars that
are in poor condition. Why? They can't afford repairs or newer cars. Why? They don't have the
money. Why? Their pay is too low." Through this process, he realizes that the older, poorly
maintained vehicles were a symptom of lower wages than those competitors paid.
Root-cause analysis can work well for an individual, a small group, or in brainstorming
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sessions.
A tool that can help you perform such an analysis is called a fishbone diagram. As the
following illustration demonstrates, every fishbone diagram will look a little different
depending on the particular problem being solved.
When confronted with a problem, think about how to frame the issue for your team. Be
careful not to assume from the outset that you know what the problem is. Challenge
yourself and your team to get at the core of the issue by framing the problem in a variety of
different ways and assessing whether the available information supports your theories.
Throughout the entire process, ask "why?" and other open-ended questions that encourage
exploration rather than closed questions based on predefined assumptions about the
problem.
If you have a 'yes man' working for you, one of you is redundant.
—Barry Rand
Once you have successfully framed the issue, the next step is to identify your objectives in
determining a course of action. Ask your team questions like "What do you want the
decision we make to accomplish?" and "What would you like to see happen as a result of
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the decision we reach?" Invite your group to describe their vision of the outcome of the
decision as vividly and specifically as possible.
For example, if you were the manager at New Age Electronics, you and your team might come
up with the following objectives:
During the objective-setting process, you may encounter significant differences in opinion
from one person to another. This is a healthy part of the dialogue and should be
encouraged. However, if you find your list of objectives spiraling out of control, you may
want to revisit your issue. You may find that you have more than one issue to resolve.
Once you have created a list of objectives, it's time to think about the strategy you are
going to use to achieve them.
Generating Alternatives
A marketing manager at a consumer products company calls a meeting with his team to
discuss how to increase laundry detergent sales in Latin America. The meeting begins with
silence as everyone waits for someone else to speak. The marketing manager breaks the
silence by suggesting they consider changing the current packaging. Following this cue,
someone chimes in with supporting statistics about packaging and consumer trends. Another
person then describes the packaging of a product that has done well in Latin America. The
meeting concludes with the assignment of a task force to research new packaging options.
This meeting seemed to proceed smoothly. What then went wrong? In this scenario, the
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manager did not successfully engage the team in generating alternatives. He didn't
promote healthy debate and constructive conflict. Instead, excessive group harmony
resulted in an action step based on the first idea that emerged—to investigate packaging
options. There was little creativity or innovative thinking. As a result, no new ideas surfaced
and the group settled on the first alternative suggested, which had been the manager's
idea!
Brainstorming
How do you brainstorm? Start with a blank flipchart page. At the start of the meeting ask
your team members to suggest any ideas that come into their heads, or ask individuals to
take a few minutes to develop their own lists of ideas to share publicly. Either way, record
the ideas but don't discuss their merits at this point. Be especially careful not to allow
criticism in the early stages. Instead, focus on identifying as many alternatives as possible.
You can evaluate the ideas after you have a list of possibilities.
Key Idea
Energize your team so that they will work hard to identify creative solutions. Creative
conflict is essential to the generation of alternatives, but it should never be personal or
divisive. Promote team participation during your brainstorming sessions by employing the
four following tactics:
Encourage open, candid dialogue by making it clear at the outset that the final
outcome is not predetermined and everyone's input will be valued.
Suggest that people try to think outside of their individual or departmental roles. They
should focus on what is best for the group using all of the available information.
Provide closure at the end of every meeting by assigning tasks and deadlines so
people are accountable for moving the process forward.
Recognize and thank people who share their ideas and viewpoints in a positive
manner—especially those who are willing to take the risk to challenge you.
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Throughout the decision-making process, it is essential that your participants feel the
process is fair. Specifically, they must believe that their ideas were acknowledged and
considered, even if their suggestions were not ultimately adopted. This sense of fairness is
critical for ensuring cooperation and buy-in when it comes time to implement the decision.
Alternatives provide the choices you will need to make an informed decision. When you
encourage team participation, facilitate creative conflict, and listen to ideas, you are likely
to generate a full slate of options that will serve you well as you enter the next stage:
evaluating alternatives.
Evaluating Alternatives
Variables to consider
Costs: How much will the alternative cost? Will it result in a cost savings now or over
the long-term? Are there any hidden costs? Are there likely to be additional costs
down the road? Does this alternative meet budget constraints?
Benefits: What kind of profits will we realize if we implement this alternative? Will it
increase the quality of our product? Will customer satisfaction increase?
Intangibles: Will our reputation improve if we implement this alternative? Will our
customers and/or our employees be more loyal?
Time: How long will it take to implement this alternative? Could there be delays? If so,
what impact will this have on any schedules?
Feasibility: Can this alternative be implemented realistically? Are there any obstacles
that must be overcome? If this alternative is implemented, what resistance might be
encountered inside or outside the organization?
Resources: How many people are needed to implement this alternative? Are they
available? What other projects will suffer if individuals focus on this option?
Risks: What are the risks associated with this alternative? Could this option result in
loss of profits or competitive advantage? Will competitors respond? If so, how?
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Ethics: Is this alternative legal? Is it in the best interests of the customers, the
employees, and the community where we operate? Would I feel comfortable if other
people knew about this alternative?
Evaluation techniques
Key Idea
As you and your team assess each alternative, a clear choice may emerge. If further
evaluation is necessary, consider using one or more of the following analytical techniques
to help you reach a decision:
A prioritization matrix provides a way for you to compare how well each alternative
achieves your objectives. It uses weighted scores to rank each alternative; the
alternative with the highest score is most likely your best choice.
A trade-off method enables you to identify the degree of variation between
alternatives. With this approach, you identify all of the attributes of each alternative
and compare them to each other in a table. To use this technique effectively, you
would need to have specific data for each alternative.
Decision trees provide a visual representation of the alternatives and their strengths
and weaknesses. They work particularly well for investment decisions such as whether
or not to increase manufacturing capacity.
The task of evaluating alternatives is easier when you use a systematic approach. Adapt the
guidelines and techniques described above to your situation, always keeping in mind the
original objectives you have set out to achieve.
Prioritization matrix
To create a prioritization matrix, start by listing your objectives in making the decision and
assigning them a value (highest = best). Then, make each of these objectives, along with
its corresponding value, a column header for your matrix. Make each of your alternatives a
row. Next, for each alternative, rate the objectives on a scale of 1 to 10 (10 = best); then,
multiply your ratings by the priority values. Add all the scores for each alternative to
determine which has the higher number. This is your best decision, based on your
priorities.
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Trade-offs
Once you lay out the alternatives with their associated information, consider how important
these factors are to your group and/or the company, and identify the compromises that
you are willing to make.
For example, would a $90,000 increase in profits be worth the time of five extra people?
Be sure to think about the trade-offs in light of the priority you assign to each objective.
Decision trees
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take it.
—Yogi Berra
Consider a situation in which you project an increased demand for your product. You and
your team need to decide whether to continue manufacturing a component internally or
whether to outsource the work. An oversimplified decision tree might present your
alternatives as follows:
Based on this simplified decision tree, the best course of action would be to pursue
Alternative B (of the two options, Alternative B offers the highest risk-adjusted net present
value).
Decision trees are typically much more robust than the above illustration in that they
evaluate more options and include multiple decision points. In general, the more
alternatives you consider, and the more detailed tree you can create, the more likely you
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are to discover a solution that meets your needs. A decision tree, however, will not
automatically indicate the best course of action—you will still need to assess the
information in the decision tree to make your choice.
Qualitative considerations
Personal Insight
When you go into a room with a bunch of really smart people that you hired, that you work
with every day, that you trust, and a problem gets put on the table and there's 100 percent
consensus as to what the course of action should be, that's the easiest decision you'll make
as a leader. There's just no problem making the right decision, because there's total
consensus. There have also been a few times where I've gotten off the page and I'll go in
and the problem will be put on the table and 100 percent of the people who work for me
say: "Dave, I don't think we want to go down that road." For me, that's a relatively easy
decision too, because I can't think of too many times where 100 percent of my team says to
go north and my desire is to try to go south. I think if that were ever to happen as a leader
you should question whether you've really got the right team, if you think they're all that
wrong. So, that's a pretty easy decision.
The toughest decisions you make are the ones where you reach out to the people whose
opinion, position and input are most important to you, and half of them tell you to go north
and half of them tell you to go south. That was the situation that I encountered in this
particular circumstance many years ago. And here's what I learned from that experience:
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that's the hardest decision a leader has to make and what we all have to understand, as
leaders in business when we're confronted with that dynamic, is that leaders must lead.
That is the magic moment where a leader has got to step forward and say: "Here's the
direction we're taking." The approach that you take to making that decision is important;
but what you do after you make that decision is almost more important. If you can—with
passion, conviction and perseverance—stand before your organization and say: "Here's
where we're going, here's why and here's why it's important that we all rally around this
decision, even those of you who would have made a different decision"—the way that you
can mobilize and energize your organization to embrace that decision and go out and
execute against it is huge.
The toughest decisions for any leader come when divided opinions require them to make
the ultimate call on a particular scenario. Once that tough call has been made, a leader
should adhere to the decision and implement it with confidence, passion, and a sense of
calm.
David Brandon
David Brandon is the Chairman and Chief Executive Officer of Domino's Pizza.
Mr. Brandon started his career at Procter & Gamble, where he worked in sales management.
In 1979, following his tenure at Procter & Gamble, Mr. Brandon moved to Valassis Inc., a
company in the sales promotion and coupon industries. He became President and Chief
Executive Officer in 1989, a position he held until 1998, while additionally taking on the
role of Chairman in the last two years.
Mr. Brandon subsequently moved to Domino's Pizza, and has been the company's
Chairman and Chief Executive Officer since March 1999.
In addition to this leadership role, Mr. Brandon is on the Boards of Burger King Corporation,
The TJX Companies, Inc. and Kaydon Corporation.
A former University of Michigan football player, Mr. Brandon is also on the University's
Board of Regents.
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If your group is having difficulty reaching a final decision, consider using the following
methods to help your team move toward resolution:
Point-counterpoint: Divide your team into two groups of equal size—Group A and
Group B. Wherever possible, spread supporters of opposing ideas between the groups.
Ask Group A to develop a proposal for a solution that includes their recommendations
and key assumptions, and then present their proposal to Group B. Then ask Group B
to identify one or more alternative plans of action, and then present those alternative
plans of action to Group A. Have both groups debate the different proposals until they
all agree on a set of recommendations.
For example, a finance department has been engaged in a heated debate over which
accounting firm to use to audit the books this year. One group favors a big name brand,
while the other favors a smaller, yet well-respected firm. Using the point-counterpoint
technique, the decision-making team considers each firm and reaches a conclusion.
For example, a manufacturer of office furniture needs to improve the quality of its
products. The first group assumes that the problem with quality is due to outdated
manufacturing equipment, and recommends investment in better equipment. The
second group questions this assumption, critiques the proposal, and presents its
analysis to the first group. The first group revises its proposal, and the two groups work
together in the revision-critique-revision cycle until they arrive at a solution that both
groups feel will improve their products' quality.
For example, "By next Tuesday we will make our decision, no matter how much
uncertainty remains."
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Agreeing up front that if disagreements are unresolved, the choice will be made by
qualified consensus
End deliberations
Key Idea
Knowing when to end deliberations is difficult. If you make a decision too early, you might
not explore enough possibilities. If you sense that your group is rushing to make a
decision, consider adjourning a meeting before making a final choice and reconvening at a
later time. Ask each participant to try to find a flaw with the decision to present at the next
meeting.
The flip side of deciding too early is deciding too late, which is equally problematic. If you
make a decision too late, you may waste valuable time and possibly even miss the
opportunity to solve the problem. If your team insists on hearing every viewpoint and
resolving every question before reaching a conclusion, the result is the same: your
discussions will become a tiring, endless loop. If you find your group is stuck going around
in circles, it is your job as a manager to bring the discussion to closure. You may need to
simply "force the issue" by establishing a deadline for a decision, using the best
information available at that time.
How to communicate
Consideration and voice: Participants who are encouraged to question and debate
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each other's ideas are more likely to believe that the leader listened to their viewpoints
and gave them serious consideration, especially if the leader demonstrated
attentiveness through his or her actions—for example, by taking notes and
paraphrasing what was said to show he or she was actively listening. Even if the
participants' viewpoints did not prevail, knowing that they were taken seriously will
lend credibility to the process and acceptance of the final decision.
Explanation: The leader needs to explain the thinking behind the final decision. It's
important to be clear about why you and your group made this choice, as opposed to
a different one. Explaining the reasons for the decision builds trust in the leader's
intentions and confidence that it was made for the benefit of the company as a whole.
Expectation: Once the decision has been made, everyone affected by the decision
needs to understand the new rules of the game. New responsibilities need to be
spelled out, as do performance measures and penalties for failure. When people
clearly understand expectations, they can focus on what needs to be done.
The people you notify will include everyone who is responsible for implementing the
decision as well as anyone who is affected by it. Your list might also include other key
stakeholders: members of your unit who were not part of the decision-making group,
senior management, department supervisors, external constituents, and even customers if
they will see a change in the way you do business with them.
Mary says: "I've carefully reviewed the notes we took during our last meeting, and
wanted to let you know that I've decided to outsource some customer service calls. We
will redeploy existing resources to receive calls from our high-value customers here at
our home office, while outsourcing calls from low-value customers."
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Explanation
Expectation
Not the best choice. Mary did apply the practice of expectation
in communicating this decision. She clarified what would
change as a result of the final decision. Specifically, calls from
high-value customers would be handled at the home office,
while those from low-value customers would be outsourced.
Patricia says: "I've decided that the best solution would be to set up a cross-functional
development team for our next product. I'm sorry that I didn't have a chance to discuss
my ideas with each of you first, but I feel confident that using this approach for new
product development will help us get a more comprehensive picture of our customers'
needs. To create the team, each of us will need to be willing to set aside several hours
each week to participate in the development project."
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Explanation
Expectation
What to communicate
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Be sure to take the time to create a clear, concise message. Providing incomplete or poorly
articulated communication about your decision can lead to confusion, disappointment, and
unwillingness to support its implementation.
Avoid uncertainty
Personal Insight
Once we'd made those decisions and it was very clear who was going, who was staying,
what was going on, and the fact that we also dealt with the consequences of our decisions
in a very humane kind of way, morale picked up. Amazingly morale really started to rise
and, going forward, we built on that basis. And actually the business performance
improved quite significantly over the next several months.
The key lesson to me from that is that if you are absolutely honest with people, if you make
your decisions effectively and quickly, make them for all the right business reasons, but
then implement and communicate them quickly, clearly, and humanely and deal with the
consequences humanely, then people will go with what you're doing, understand what
you're doing, and you get the best result. If you have a confused message, if you're
indecisive, uncertain, that just sows the seeds of uncertainty, doubt, and anxiety, and then
you've got a very demoralized workforce and that feeds through into performance.
In carrying through major change, uncertainty is the greatest threat. Make decisions
quickly, communicate them clearly, and act decisively.
John Roberts
John Roberts graduated from Liverpool University and joined Manweb. After working his
way up the company, he became Finance Director in 1984, then Managing Director in 1991.
He was appointed Chief Executive a year later.
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He then became Chief Executive of South Wales Electricity, and was at the helm during its
acquisition by Hyder. He was then appointed Chief Executive of Hyder Utilities.
He was appointed Chief Executive of United Utilities in September 1999, and retired from
the company in March 2006.
John Roberts has been President of the Electricity Association and Chairman of the
Electricity Pension Trustees Limited.
You probably have much of the information you need to develop the implementation plan.
When you were evaluating alternatives, you probably considered the cost, the number of
people required to work on the project, and so forth.
For example, suppose you and your group determine that customer complaints about your
telephone support line are due to inadequate training of the support associates taking calls.
After analyzing the situation, you may decide that the associates need to have more product
knowledge. As part of evaluating this alternative, you probably would have identified the
resource requirements from the training department to implement your solution.
Implementation considerations
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Assign reasonable tasks with sufficient resources. For example, the people in the
training department may not have extensive product knowledge and may need the
help of a content expert. You might need to assign an expert in product knowledge to
work with the training department to develop a program.
Clarify expectations and acknowledge incentives. For example, if an account executive
is going to start managing the company's largest client, explain what this client means
to the organization and your expectations for managing the relationship. Determine
whether the increase in responsibility should result in a pay increase or change in title,
and follow up with your Human Resources department to make that happen.
Provide feedback on the implementation. Give your employees feedback on the
progress of the implementation plan. Your input should be constructive and focused
on accountability and execution. Set a time for daily or weekly status meetings. This
will help you stay informed of your group's progress during implementation.
Take a look for yourself. Check in with people informally. Ask them how the project is
going and if they have any concerns about it. Be interested not only in issues related
to implementation, such as schedule and budget, but also whether your employees
believe that the project is effectively addressing the problem it is intended to solve.
Recognize people's contributions. Implementation often goes unnoticed unless it fails.
If things are going well, recognize individual contributions and celebrate successes.
Most implementation plans require some adjustment. If nothing else, conditions change
over time. So occasional adjustments, ranging from fine-tuning to wholesale changes, are
often needed.
What if the decision you've implemented ultimately doesn't work out as you'd expected? In
most cases, corrections can be made. These will often involve only "tweaking" the decision
you've implemented. But sometimes you may find that the alternative you chose just isn't
working. In such cases, you need to revisit the decision-making process.
Make sure you framed the issue correctly. Have you learned anything new that makes
you think the problem is different from what you thought the first time around?
Has there been a change in your objectives? Do you have new information that you
didn't have before? Perhaps you see that one objective should have been given more
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After you've evaluated how well each alternative would be expected to address each
objective, return to the results of your first evaluation. Where you find discrepancies
between the first time and this time, decide which one is more on target in light of what
you know now.
An ongoing effort
Assessing the decision-making process is an ongoing effort that must occur in real time,
throughout all the phases of the process. You need to monitor the tone of your meetings
and address problems in group dynamics before they interfere with your goal. Sometimes
new information becomes available, or new conditions arise, necessitating a mid-course
correction in your objectives.
Have a plan for evaluating the various elements in your process, from gathering your
decision-making team to implementing the actual decision. It could be something as
simple as a checklist. Take the time after each meeting to think about how it went.
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Research suggests that decisions that include these five process characteristics have
sharply improved odds of being successful:
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Gary noticed that his team began their meeting by generating two alternatives to their
issue, but subsequently seemed to grow tired. As a result, they settled too quickly on a
solution.
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Eileen's team is engaged in determining the site for a new distribution center. Several
sites appear promising. One of these is particularly attractive based upon its proximity
to a proposed highway.
What is the best next step Eileen should take to guide her team's decision-making
process?
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Misrahi noticed that Bill and Rhonda have grown silent after the idea they brought to the
table was rejected by the rest of the group.
How can she help them to reengage in the decision making process?
Ask how the positive features of Bill and Rhonda's idea can be incorporated in the
final solution
Ask Bill and Rhonda to review the objectives for the project and refine them if
necessary
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Very few complex decisions can be made based on cost alone. Most decisions involve
considering a variety of factors, and require sound judgment on your part in weighing
those factors. As a manager, you need to assess the consequences of your alternatives as
best you can and then make a decision.
Ethics should play an important part in your team's deliberations before making a decision.
Ask your group to explicitly consider ethical issues based on their own values—and not
dismiss them as "soft" and therefore unworthy of discussion.
For example, if a team member feels uncomfortable because she heard rumors that the highly
successful company you are considering working with overseas has been polluting the
environment; she should be encouraged to bring her concerns to the table for deliberation.
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One technique to ensure that ethics are considered during your discussions is to appoint
an "ethical watchdog," or ombudsman. The person who fills this role would be responsible
for ensuring that ethical issues surface during discussions. During the course of the
decision-making process, the role of "ethical watchdog" should rotate periodically.
There is no set of universal guidelines for making ethical decisions. However, a starting
point might include asking yourself questions. The questions could be broad and far-
reaching in scope, such as: "Which option will produce the greatest good and do the least
harm?"
At a minimum, to ensure ethical decision making you should make sure that your decision
passes the following two tests:
The legal test. Ask yourself: "Is the decision against the law or against company
regulations?" If the answer is yes, you clearly do not want to do it.
For example, a decision that discriminates based on race, gender, age, or religion would
not be acceptable.
You may also want to consider whether something that is technically legal goes
against your company's regulations.
For example, your company may have a policy that its facilities must comply with all U.S.
environmental regulations, even if the facility is located in a country or region where the
environmental standards are more relaxed than in the United States.
The stakeholder test. Ask yourself: "Is the decision in the best interest of our
employees, customers, community, and other key stakeholders such as federal or
state regulators?" Sometimes a decision that doesn't directly increase profits is
actually in the company's best interest.
If your decision passes the two tests above, as a final check, you might want to consider
what someone you respect would say if you told them you chose a particular option.
Another key to evaluating the ethics of an option is to consider whether the decision-
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making and implementation process is open and direct. If you do not want other people to
know about the decision, you may not be making the ethical choice.
Personal Insight
When our engineers at Boston Scientific Corporation (BSC) came to me and said: "We want
to understand what your position is if we discover a problem", the first thing I said was: "I
want to know about it." They replied: "If we let you know about it, are you going to recall
the product?" I said: "No, I'm going to find out more information and ask the people who
are using the product whether this problem will affect their use. Or is it something where
the benefit of use exceeds the risk of use?" That's the fundamental ethical decision that
everybody has to deal with. Think about what a surgeon does. He uses a scalpel to cut
people. That cut can be used for good or for bad. Interestingly, the engineers didn't think
of that.
Next we talked about the concept of being a whistle blower. The comment that I made
there was that if somebody talks to somebody outside without making a sustained effort to
talk inside, shame on him. That person should be thrown in jail, from my point of view.
They have really broken the social contract that you have not only within the organization,
but also with all your customers who may depend on this product. The key is really about
balance of information: making sure that all the people in the chain, the manufacturer and
the user, understand the risk and the rewards. They must understand all the attributes of
how the product can be used or abused to make it work well or not.
Does the benefit of using a product outweigh the risk? A balance of information—where
customers and manufacturers alike understand the attributes of a product—is required so
that they are armed with the necessary facts to make an informed decision.
John Abele
John Abele is the co-Founder of Boston Scientific, the worldwide developer, manufacturer,
and marketer of medical devices.
Mr. Abele has been driving the advancement of less-invasive medical technology for more
than 25 years.
Boston Scientific's history began in the late 1960s, when Mr. Abele acquired an equity
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In 1979, Mr. Abele partnered with Pete Nicholas to buy Medi-tech, and together they
formed Boston Scientific Corporation.
Since its public offering in 1992, Boston Scientific has undergone an aggressive acquisition
strategy, assembling the lines of business that allow it to continue to be a leader in the
medical industry.
Some companies develop statements about their values and sense of social responsibility.
These statements may include goals such as providing top-quality products, reducing
waste to the environment, and fostering an open, honest, and direct corporate culture.
While managers can refer to their company's value statement for guidance, it is unlikely
that the company value statement will be enough. You will probably have to use your
personal judgment as well.
For example, in the case of dealing with an employee who has a drug problem, you may
decide that the cost of getting help for this person (e.g., lost time on the job) is outweighed by
the value of this person's skills or expertise to your group and your company.
Scenario
Part 1
Part 1
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What's the best way for Lyle to identify options for increasing revenues?
Lyle should carefully review the market research that was conducted and quickly
develop two or three proposals for senior management.
Not the best choice. Finding ways to increase revenues is an important decision that sh
not be made hastily by one individual. Instead, Lyle should gather a team to explore
different options. The team should include people from both inside and outside of his
group. Given the complexity of the decision, several meetings may need to be held to
carefully evaluate the options that are generated.
Lyle should meet with a few select individuals from his staff who are extremely
knowledgeable about the product to generate options.
Not the best choice. Working with a few expert individuals from Lyle's group is too limi
Individuals who work in the same group often tend to have similar backgrounds and us
the same criteria to evaluate issues. As a result, they are more likely to move toward
closure without considering all the factors that should go into making a decision. Inclu
others who have different viewpoints and areas of expertise forces a group to evaluate
more thoroughly their options and helps to avoid "groupthink."
Lyle should explore solutions with a combination of people from inside and outside
his group, for example, individuals from sales and research & development.
Correct choice. Working with a group of people who have different backgrounds and le
of expertise often generates a larger range of options to choose from. Also, people wit
diverse perspectives tend to evaluate alternatives more critically, thus leading to a mor
informed decision. Lyle would be wise to include a member from sales as the sales gro
will be a key stakeholder and will be more likely to execute a decision that they particip
in.
Part 2
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Part 2
Lyle assembles a group of five people to identify ways to increase revenues without diluting
the cookie brand's image. The group has a mix of people with different backgrounds and
levels of expertise. Three of the participants are from his staff, one is from sales, and the
other is from research & development.
The group explores options ranging from a coupon program to reducing prices to
corporate partnerships. After thorough discussion and analysis, the team decides that
forming a partnership with another company is the most promising option.
Two people in the group, however, remain skeptical that this is the best course of action
and want to continue evaluating other ideas.
Lyle identifies several ice cream companies as potential partners for creating an ice cream
sandwich. While he's in the early stages of researching these companies, Supreme Ice
Cream approaches him about a partnership. Supreme Ice Cream is eager to move forward
and is offering what appear to be very attractive terms for the deal.
Lyle should reconvene his group to decide whether or not to partner with Supreme Ice
Cream.
Not the best choice. A common mistake managers often make is to view opportunities
"go/no go" proposition. Lyle should wait until other offers have been submitted and
evaluate the Supreme Ice Cream offer in relation to those offers. Thus, while it would b
tempting to move ahead and establish a partnership, it is too early for Lyle to do so at
time.
Lyle should reconvene his group to revisit the decision that a partnership is the best
option for increasing revenues.
Not the best choice. Lyle's group has already determined that a partnership is the best
to increase revenues. If Lyle re-opens the discussion, he runs the risk of taking too mu
time and missing an opportunity to potentially partner with Supreme Ice Cream. Rehash
old decisions often results in stalled efforts to move forward.
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Lyle should seek out other offers and then evaluate the Supreme Ice Cream deal.
Correct choice. Lyle and his group should pursue other offers and compare them to
Supreme Ice Cream's proposal. Evaluating multiple offers will give them a better contex
which to make a choice. After careful review, Lyle and his group might realize that Supr
Ice Cream's offer was not as attractive as they originally thought.
Part 3
Part 3
Shortly after the Supreme Ice Cream offer is submitted, Lyle receives three more proposals
from potential partnership companies.
Lyle calls the group together for a final meeting. The goal is to compare the offers and
select a company with whom to partner. Two companies are quickly eliminated because the
terms of the deal are not favorable. Participants, however, are divided on the remaining two
companies.
Lyle and his group should outline the strengths and weaknesses of the two companies
and vote on the top choice.
Not the best choice. While outlining the strengths and weaknesses of the two companie
helpful in evaluating the options, voting on the decision may have negative results.
Participants who vote for the losing choice may feel dissatisfied with the conclusion of
process and may not be inclined to support the decision going forward.
Lyle should split the participants into two groups and ask each group to advocate for
a different company. If, at the end of the discussions, the team cannot reach
agreement, Lyle should then make the decision based on the team's input.
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in debate. In this case, Group A would develop a proposal that would advocate for Supr
Ice Cream and Group B would do the same for the other company. The groups would th
meet to debate the proposals and decide on a course of action. By asking each group to
consider both sides, it is likely that people will be less entrenched in supporting one of
two options. Also, it is important to let group members know at the beginning of the
meeting how the decision will be made if they do not reach consensus.
Lyle should carefully analyze his choices by creating a matrix that prioritizes the
merits of the two different companies. He should then present this analysis to his
boss, who will make a final decision.
Not the best choice. A prioritization matrix is a useful tool in evaluating options becaus
quantifies how your alternatives meet your objectives. Lyle and his group might want to
employ a prioritization matrix to compare the two companies; however, the ultimate
partnership decision should not be made by Lyle's boss. If someone from outside the g
is given the authority to make the final decision, group members are likely to feel
powerless. Those individuals whose preference is not selected may feel dissatisfied wit
outcome and may question why they contributed to the process at all.
Conclusion
Conclusion
After using the "point-counterpoint" technique and discussing the advantages and
disadvantages of the two different companies,the group unanimously decides to accept the
offer from Supreme Ice Cream.
Lyle then communicates this decision to senior management, colleagues, and other key
stakeholders.
Lyle has managed the decision-making process well. He assembled a diverse group of
people with different backgrounds and areas of expertise.
He empowered his team throughout the entire process to encourage buy-in. And he
communicated the decision to all relevant parties.
At first, the decision-making process may seem time-consuming and even overwhelming.
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However, managers who engage in decision making as a process increase their likelihood
of making more effective decisions.
Question 1
Suggest a possible solution in an early meeting to get the group to consider a new
idea
Not the best choice. The point-counterpoint technique can encourage people to consid
multiple options rather than striving for group harmony. Suggesting a possible solution
an early meeting to get the group to consider a new idea is the approach most likely to
to excessive group harmony. Employees may view the suggestion as your preferred
solution and support the idea to try to please you.
Ask someone in an early meeting who has yet to participate to make a comment or
suggestion
Not the best choice. Asking someone who hasn't yet participated to make a comment o
suggestion can encourage people to consider multiple options rather than striving for
group harmony. Suggesting a possible solution in an early meeting to get the group to
consider a new idea is the approach most likely to lead to excessive group harmony.
Employees may view the suggestion as your preferred solution and support the idea to
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to please you.
Question 2
Which of the following is a sign that your discussions may have deteriorated
into advocacy mode?
A team member is asking a lot of probing questions of her colleagues during every
meeting.
Not the best choice. A team whose members ask many probing questions is taking mo
an inquiry-based approach, not an advocacy-based approach. In an advocacy-based
discussion, people try to persuade each other to support their viewpoints. These
individuals could influence others to see the decision process in terms of winners and
losers—which often doesn't lead to smart choices.
Participants are explaining their viewpoints to each other in the hallway before and
after your meetings.
The minority viewpoint has generated a lot of conversation during your meetings.
Not the best choice. A team that considers minority viewpoints is taking more of an
inquiry-based approach, not an advocacy-based approach. In an advocacy-based
discussion, people try to persuade each other to support their viewpoints. These
individuals could influence others to see the decision process in terms of winners and
losers—which often doesn't lead to smart choices.
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Question 3
Which of the following teams would you assemble to choose a new software
program to manage the inventory at your warehouse?
Not the best choice. Though this group contains representatives from departments tha
be affected by the change, the team is too large to manage. Unless you need a bigger
group to accommodate a variety of perspectives, aim for 5 to 7 participants in a decisio
making team.
The ideal team would consist of two people from purchasing, three information techno
professionals, and a warehouse floor supervisor.
Correct choice. This group contains representatives from departments that will be affec
by the change, and the team is a reasonable size. Unless you need a bigger group to
accommodate a variety of perspectives, aim for 5 to 7 participants in a decision-makin
team. Larger groups are more difficult to manage.
Not the best choice. Though this group is a manageable size, it is missing representativ
from one department that will be affected by the change—such as the warehouse
supervisor. Since her job will likely be affected by the new software, it's important to
address her interests during the process of selecting the software.
The ideal team would consist of two people from purchasing, three information techno
professionals, and a warehouse floor supervisor.
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Question 4
True
Not the best choice. This statement is actually false, because a decision tree will not
necessarily point to the best solution. Instead, it provides a visual representation of the
uncertainties and possible outcomes associated with a decision. Thus it helps you evalu
your options. You will still need to assess the information in the decision tree to make y
choice. Creating a prioritization matrix may help you evaluate your options at this stag
False
Correct choice. A decision tree will not necessarily point to the best solution. Instead, it
provides a visual representation of the uncertainties and possible outcomes associated
a decision. Thus it helps you evaluate your options. You will still need to assess the
information in the decision tree to make your choice. Creating a prioritization matrix m
help you evaluate your options at this stage.
Question 5
Encourage participants to verbalize any ideas that come into their heads. Record their
ideas on a flipchart for evaluation in a follow-up meeting.
Not the best choice. This actually is a good way to facilitate a brainstorming session.
Brainstorming is intended to generate alternatives, not evaluate them as they're presen
Encouraging participants to verbalize any ideas that come into their heads, and then
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recording their ideas on a flipchart for evaluation in a follow-up meeting, makes peopl
feel they can offer their thoughts without sparking criticism or debate.
At the start of the meeting, ask participants to write down any ideas that come into
their heads. Ask them to then share their ideas publicly. As they speak, write down
their ideas on a flipchart.
Not the best choice. This actually is a good way to facilitate a brainstorming session.
Brainstorming is intended to generate alternatives, not evaluate them as they're presen
Asking people to write down ideas, and then share them as you record them on a flipch
makes people feel safe offering their thoughts without sparking criticism or debate.
Encourage participants to verbalize any ideas that come into their heads. Discuss the
merits of each idea with the group and record the best ideas on a flipchart.
Correct choice. Discussing the merits of each idea as it is offered will probably not
encourage brainstorming because brainstorming should be used to generate alternativ
not to evaluate them as they're presented. When leading a brainstorming session, ask
people to focus on identifying as many alternatives as possible rather than criticizing o
debating ideas as they're presented. You can evaluate ideas later, after you've generate
exhaustive list of options.
Question 6
Correct choice. A common mistake people make when considering a decision is to seek
information that supports their existing point of view and to ignore information that
contradicts it. When faced with a decision, asking a colleague to argue against your
potential decision may identify weaknesses that you haven't yet considered. Seeking on
people who have similar views or who have made a similar decision will likely strengthe
your resolve to proceed without sufficiently careful consideration.
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Not the best choice. While it might seem logical to start with someone who has made a
similar decision, this actually feeds into a common bias: seeking information that supp
our point of view and ignoring information that contradicts it. When faced with a decisi
asking a colleague to argue against your potential decision may identify weaknesses th
you haven't yet considered. Seeking only people who have made a similar decision will
likely strengthen your resolve to proceed without sufficiently careful consideration. For
reason, you should first approach a manager in another department who recently decid
to keep manufacturing in-house.
A manager in another department who recently mentioned that she thinks outsourcing
makes a lot of financial sense
Not the best choice. While it might be tempting to start with someone who shares your
viewpoints on an important decision, it actually feeds into a common bias: seeking
information that supports our point of view and ignoring information that contradicts i
When faced with a decision, asking a colleague to argue against your potential decision
may identify weaknesses that you haven't yet considered. Seeking only people who hav
similar views will likely strengthen your resolve to proceed without sufficiently careful
consideration. For this reason, you should first approach a manager in another departm
who recently decided to keep manufacturing in-house.
Question 7
Which of the following is the best way to frame an issue related to a high
volume of customer complaints about a product?
Not the best choice. By asking how you might change the product, you're revealing you
assumption that the product is the problem—which may not necessarily be the case. W
trying to frame an issue, begin your discussions by asking questions that encourage
exploration. Avoid questions that assume the nature of the problem. Your goal is to ge
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the core of the issue before you begin examining possible solutions. For this reason,
asking why customers are dissatisfied is the best way to frame the issue of rising custo
complaints.
What is wrong with the product?
Not the best choice. By asking what's wrong with the product, you're revealing your
assumption that the product is the problem—which may not necessarily be the case. W
trying to frame an issue, begin your discussions by asking questions that encourage
exploration. Avoid questions that assume the nature of the problem. Your goal is to ge
the core of the issue before you begin examining possible solutions. For this reason,
asking why customers are dissatisfied is the best way to frame the issue of rising custo
complaints.
Correct choice. When trying to frame an issue, it's good to ask questions that encourag
exploration and to avoid questions that assume the nature of the problem (such as "Ho
can we change the product?" or "What's wrong with the product?"). Your goal is to get a
core of the issue before you begin examining possible solutions.
Question 8
A manager asks each team member to come to a meeting prepared to present his or
her ideas to the other group members. The group then discusses each proposal and
tries to find a set of assumptions and recommendations that the group can accept.
Not the best choice. This example illustrates the consensus-based technique, not poin
counterpoint. To use the point-counterpoint technique, you divide your team into two
groups and ask them to develop opposing proposals. After both groups present their
proposals, the whole group tries to agree on a course of action. The consensus-based
point-counterpart techniques are both useful for encouraging team members to reach
final decision.
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Not the best choice. This example illustrates the intellectual-watchdog technique, not
point-counterpoint. To use the point-counterpoint technique, you divide your team int
two groups and ask them to develop opposing proposals. After both groups present th
proposals, the whole group tries to agree on a course of action. The intellectual-watchd
and point-counterpoint techniques are both useful for encouraging team members to r
a final decision.
A manager splits his team into two subgroups. He asks one subgroup to come to a
meeting prepared to present a proposal; he asks the other subgroup to be prepared to
present an opposing proposal. After both presentations have been made, the whole
group tries to agree upon a course of action.
Correct choice. To use the point-counterpoint technique, you divide your team into two
groups and ask them to develop opposing proposals. After both groups present their
proposals, the whole group tries to agree on a course of action. The point-counterpoin
technique—as well as a consensus approach and the intellectual-watchdog technique
described in the other options—are all useful for encouraging team members to reach
final decision.
Question 9
Assign reasonable and attainable tasks to your team and to anyone else who will need
to implement the decision
Not the best choice. Though assigning tasks to those who will implement the decision w
eventually be valuable, it's not what you should do immediately after making a decision
Instead, determine who should know about the decision. You do not want to start
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implementing a decision until you are sure that everyone who will be affected by the
decision is aware of your plans. A common mistake is to make a decision with a team o
people and then forget to inform others of the course of action that was chosen. While
other people may not be directly involved in implementing your decision, they may still
affected by it.
Create a work plan that outlines the tasks necessary to implement your decision
Not the best choice. Though creating a work plan that outlines the tasks for implement
your decision will eventually be valuable, it's not what you should do immediately after
making a decision. Instead, determine who should know about the decision. You do no
want to start implementing a decision until you are sure that everyone who will be affec
by the decision is aware of your plans. A common mistake is to make a decision with a
team of people and then forget to inform others of the course of action that was chose
While other people may not be directly involved in implementing your decision, they ma
still be affected by it.
Correct choice. Once you make a decision, you need to determine who should know ab
it. You do not want to start implementing a decision until you are sure that the people
will be affected by the decision are aware of your plans. A common mistake is to make
decision with a team of people and then forget to inform others of the course of action
was chosen. While other people may not be directly involved in implementing your
decision, they may still be affected by it.
Question 10
True
Not the best choice. This statement is actually false. Even though a decision may be leg
is not necessarily the right thing to do. As a manager, you have a responsibility to cons
ethics when making a decision. Your personal values and any corporate statements of
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social responsibility will guide you. Ultimately, you must balance the interests of all
stakeholders, from those who will gain from a decision to those who could be adversely
affected.
False
Correct choice. Even though a decision may be legal, it is not necessarily the right thing
do. As a manager, you have a responsibility to consider ethics when making a decision
Your personal values and any corporate statements of social responsibility will guide yo
Ultimately, you must balance the interests of all stakeholders, from those who will gain
from a decision to those who could be adversely affected.
Steps
3. "Paint" a picture of what things will look like when the problem is solved.
Invite all stakeholders to describe the desired future state in as much detail as
possible. Let imaginations and creativity run loose. Here, too, you may find significant
divergence from one person to another. You may resolve differences by compromise,
straight selection of one view over another, or by determining you in fact have two or
more problems at hand.
4. Make sure your agreed-on objectives and outcomes are not in conflict.
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You may have determined that part of your solution to customer complaints about
telephone orders is to have all of your phone-order reps take an additional three
weeks of training. Another part of the solution is to reduce standards for each rep's
completed orders per hour from eight to seven. But can you have the lower staffing
levels due to training and the fewer customers handled by each rep at the same time?
Will customers then complain more about long waits to have their orders taken? If yes,
goals may have to be adjusted.
increase profits
3. Create a matrix.
Make each objective with its value a column header along the top of the matrix. Make
each of your alternatives a row. Your matrix would look something like this:
Alternative
A
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Alternative
B
Alternative 9 2 7 2
A
Alternative 2 9 8 3
B
Another way to approach the prioritization matrix is to complete each column, one at
a time. In our example, Alternative A may result in large profits, so you rate it 9.
Alternative B may have little impact on profits, so you rate it 2. Then you proceed to
the next column (objective), compare the alternatives and assign ratings. With both
approaches, the results will be the same.
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Add all the scores for each alternative. In this case, Alternative A is the best decision
based on your priorities.
When you use a prioritization matrix, keep in mind the degree of variation between
the different alternatives you are exploring. For example, if the difference in the
amount of profits between alternatives is $5,000, you might think differently than if
the difference were $100,000—especially if it also had a negative impact on the
company, such as loss of jobs. So, while prioritizing your alternatives can be useful,
keep in mind that you should look at all the facts before you make your final decision.
1. Divide your team into two groups of equal size—Group A and Group B. Be sure to
spread supporters of opposing ideas between the two groups.
2. Ask Group A to develop a proposed course of action for the decision at hand. Group A
should include its recommendations, key assumptions, and supporting data in a
written proposal.
4. Ask Group B to identify one or more alternative courses of action. Group B should
document its key assumptions and gather supporting data.
6. Hold a third meeting in which both groups come together to debate the proposals and
identify a common set of assumptions.
7. Manage the meetings so that the two groups continue to debate a variety of options
based on common assumptions. The ultimate goal is to get the whole group to agree
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on a recommendation.
1. Divide your team into two groups of equal size—Group A and Group B.
2. Ask Group A to develop a proposed course of action for the decision at hand. Group A
should include its recommendations, key assumptions, and supporting data in a
written proposal.
4. Ask Group B to develop a detailed written critique of Group A's assumptions and
recommendations.
8. Manage subsequent meetings so that the two groups continue to critique and revise
the proposal until they agree on a recommendation.
Tips
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When defining the problem, involve people with varying levels of areas expertise and
people who come from different functional areas within your organization.
Big problems don't necessarily have big causes: a small change can have a huge
impact.
When looking for the cause to a problem, look for something that changed at the
same time the problem arose—you'll often find the cause there.
Solutions often create new problems.
Ground rules
Any number of people, from two up, can participate. But experience shows that a
group of 5 to 15 people works best.
A facilitator should guide the session. Position and rank should play no role during the
session.
Everyone should accept all ideas and answers without dispute, criticism, or correction.
Those judgments and refinements come after the session—by the whole group or a
subgroup. The key idea in brainstorming is "anything goes."
Do everything you can to encourage a free flow of ideas. Rules and structure, other
than the few listed here, can work against a productive session.
Process
Write the problem, issue, or question the group will brainstorm on a chalkboard or flip
chart, where everyone can see it throughout the session. Get agreement from
everyone that the issue is stated correctly and precisely.
Have individuals generate ideas on their own first. Then open the session to ideas or
answers from all participants. This can be a structured or unstructured process. In a
structured process, go around the room asking for an idea from each person in turn.
The participant who doesn't have an idea when it's his or her turn says "Pass." When
everyone says "pass" on a single round, the session is over. In an unstructured
process, anyone can mention an idea or answer at any time. When a full minute passes
with no one mentioning a new idea, the session is over.
On the chalkboard or flip chart, write every idea or answer that emerges. Don't
paraphrase—try to capture the person's exact words.
When the brainstorming is over, sort out all of the ideas and answers. You'll find
similarities and overlaps that will allow you to put them into several general
groupings. The groupings you come up with in a problem-solving brainstorming
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Invite outsiders, both experts and novices, to participate in your meeting on occasion
to provide fresh ideas and critiques. Periodically bring in new people.
Encourage team members to step out of their traditional roles when generating
alternatives. For example, if you're trying to brainstorm new product ideas, invite
someone from your marketing group to join your team, but ask that person to think
about ideas from a sales or financial perspective. You will probably find that more
creative ideas surface when people think without their functional hats on.
Ask probing questions such as "What alternatives might we consider?" and "How would
we respond to concerns about ____?" to avoid deciding too early on a solution that
may not be the best one. Among the most important probing questions are those that
test the validity of the group's assumptions. Those assumptions should be made
explicit and discussed openly.
Ask team members to play "devil's advocate" by researching and making a case
against their preferred proposal. Ask them to explain in detail why the preferred
option should not be adopted.
Acknowledge and discuss minority points of view whenever possible. Try to include
more than one person in your group who is likely to express a minority opinion. A
single person that disagrees with the majority is far less effective than multiple
dissenting voices.
Be willing to consider and discuss views that are different from your own.
Revisit abandoned alternatives from time to time to ensure that they were discarded
using sound judgment.
Structure your meetings informally. Start with a clean whiteboard or easel instead of a
formal presentation. Keep your introductory comments brief. Encourage people to
generate ideas and ask each other questions.
At the outset, try to keep your opinions to yourself to avoid influencing the team in a
particular direction. You want people to express their honest opinions, not what they
think you want to hear.
Clarify your objectives in the decision-making process and make sure that the group
shares them. Ask team members to define their priorities about the situation and list
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what has already been done to achieve them. Revisit these objectives regularly to
ensure that they are still valid and are still guiding your process.
Once the ground rules have been established, urge the team meet without you for one
or more meetings so that they can explore their own ideas. This will ensure that they
are not overly influenced by your opinions, preferences, or priorities.
Urge people to participate in discussions as "skeptical generalists." In other words,
encourage them to act as unbiased critical thinkers rather than as advocates of
particular interests. Emphasize that participants should be critical of ideas, not
people.
Encourage constructive contention by inviting others to challenge your opinions and
ideas: "My perspective on this is _____; however, I may be wrong. Could you identify
any gaps in my logic so we can come up with the most effective decision?"
Signal unacceptable behavior by providing direct and immediate feedback to
individuals who engage in unproductive conduct (e.g., going off on tangents,
engaging in personal attacks, seeking support outside of the meetings, or ignoring
other points of view).
Watch for signs of discontent such as furrowed brows or crossed arms. If you notice
that someone is clearly upset, you may want to call for a break in the meeting.
Approach the person in private to explore her concerns, encourage participation in the
group, and then reconvene the meeting.
Listen attentively to your group and be patient when people explain their ideas. Try
not to interrupt.
Make eye contact with your team members and nod your head to indicate that you
hear what they are saying.
Either take notes yourself or appoint a note taker to show that you are considering
everyone's ideas and that their input is valued and respected.
Clarify that while not all of your group's suggestions will be adopted, they will all be
considered fairly.
Ask targeted questions to promote understanding, debate, and the creation of new
ideas.
Repeat the main idea of an individual's comments when asking a question or moving
the conversation in a different direction. For example, "You make a good point.
Vendor A does have excellent references. Do others share these views of Vendor A?
Has anyone identified any flaws with Vendor A's proposal?"
If you are responsible for making the final decision (instead of having a consensus or
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majority vote), explain your reasons to the group. Let the group know how their ideas
affected the final decision or explain why you chose to differ with them.
Once a decision has been made, be sure to spell out any new roles and responsibilities
as well as performance measures so people have a clear idea of what is expected of
them.
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Online Articles
Paul Rogers and Marcia Blenko. "Who Has the D? How Clear Decision Roles Enhance
Organizational Performance." Harvard Business Review OnPoint Enhanced Edition. Boston:
Harvard Business School Publishing, January 2006.
Decisions are the coin of the realm in business. But even in highly respected companies,
decisions can get stuck inside the organization like loose change. As a result, the entire
decision-making process can stall, usually at one of four bottlenecks: global vs. local, center
vs. business unit, function vs. function, and inside vs. outside partners. Decision-making
bottlenecks can occur whenever there is ambiguity or tension over who gets to decide what.
For example, do marketers or product developers get to decide the features of a new product?
Should a major capital investment depend on the approval of the business unit that will own it,
or should headquarters make the final call? Bain consultants Paul Rogers and Marcia Blenko
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use an approach called RAPID (recommend, agree, perform, input, and decide) to help
companies unclog their decision-making bottlenecks by explicitly defining roles and
responsibilities. When revamping its decision-making process, a company must take some
practical steps: Align decision roles with the most important sources of value, make sure that
decisions are made by the right people at the right levels of the organization, and let the
people who will live with the new process help design it.
Richard Luecke. "Make Better Decisions." Harvard Management Update, April 2006.
We know that individuals can be trained to make better decisions, but as greater authority is
moved into the hands of frontline managers, developing a broadly based decision competency
is becoming more important. Some corporations are taking steps to enhance organizational
decision competence. Learn how two of these companies, General Motors and Chevron,
developed programs for improving decision quality and how they got started.
Visit the Harvard ManageMentor Web site to explore additional online resources available to
you from Harvard Business School Publishing.
Articles
Click on a link below to go to Harvard Business Online, the Web site of Harvard Business
School Publishing, where you can browse or purchase products. Your Harvard
ManageMentor program will remain open while you are at the site.
Constance E. Bagley. "The Ethical Leader's Decision Tree." Harvard Business Review,
February 2003.
If you spring for optional pollution-control devices at your overseas plant, have you violated
your duty to maximize shareholder value? This article provides a framework for exposing
conflicts between corporate actions and corporate ethics that can help clarify ethical
dilemmas—and potentially head off bad decisions.
The single greatest cause of corporate underperformance is the failure to execute. Author Ram
Charan, drawing on a quarter century of observing organizational behavior, perceives that
such failures are caused by a misfire in the personal interactions that are supposed to produce
results. The inability to take decisive action is rooted in a company's culture. But, Charan
notes, since leaders create a culture of indecisiveness, they can also break it. This article
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provides guidance for leaders to moving their organizations from paralysis to action.
John S. Hammond, Ralph L. Keeney, and Howard Raiffa. "The Hidden Traps in Decision
Making." Harvard Business Review On Point Enhanced Edition. Boston: Harvard Business
School Publishing, November 2000.
The human mind is prone to distortions and biases that can undermine even the most well-
thought-out decision-making process. This article examines eight psychological traps that are
particularly likely to affect the way we make business decisions. The best way to avoid these
traps is awareness—forewarned is forearmed. The authors also show executives how to take
other simple steps to protect themselves and their organizations from various kinds of mental
lapses.
W. Chan Kim and Renee A. Mauborgne, "Fair Process: Managing in the Knowledge
Economy." Harvard Business Review OnPoint Enhanced Edition. Boston: Harvard Business
School Publishing, February 2000.
Books
Max H. Bazerman. Judgment in Managerial Decision Making. New York: John Wiley & Sons,
2002.
In situations requiring careful judgment, we're all influenced by our own biases. Bazerman's
book provides a framework to help managers overcome those biases to make better decisions.
Through the use of vivid real-world examples, Bazerman identifies systematic ways in which
judgment and decision-making skills deviate from rationality under uncertain conditions. The
book provides practical strategies and exercises for changing and improving your decision-
making processes so they become part of your permanent behavior.
David A. Garvin. General Management: Processes and Action. Boston: McGraw-Hill, 2002.
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Understanding the skills necessary to influence the design, direction and functioning of
management processes is essential to effective management. Focusing on implementation and
the way general managers get things done, Garvin walks through management processes like
strategic planning, business planning and budgeting to help move an organization forward.
Using real-world examples, Garvin illustrates a wide range of management processes and
activities and their link to performance.
Using examples drawn from the American government, Janis tests his hypothesis that groups
often tend to make more extreme decisions than will individuals. From the Bay of Pigs invasion
to the Watergate cover-up, Janis portrays in detail how group dynamics helped to put
participants on a disastrous course and keep them there. In addition, Janis presents fresh
ideas on how and why groupthink occurs and offers suggestions for avoiding it.
eLearning Programs
Click on a link below to go to Harvard Business Online, the Web site of Harvard Business
School Publishing, where you can browse or purchase products. Your Harvard
ManageMentor program will remain open while you are at the site.
Harvard Business School Publishing. Case in Point. Boston: Harvard Business School
Publishing, 2004.
Case in Point is a flexible set of online cases, designed to help prepare middle- and senior-
level managers for a variety of leadership challenges. These short, reality-based scenarios
provide sophisticated content to create a focused view into the realities of the life of a leader.
Your managers will experience: Aligning Strategy, Removing Implementation Barriers,
Overseeing Change, Anticipating Risk, Ethical Decisions, Building a Business Case, Cultivating
Customer Loyalty, Emotional Intelligence, Developing a Global Perspective, Fostering
Innovation, Defining Problems, Selecting Solutions, Managing Difficult Interactions, The
Coach's Role, Delegating for Growth, Managing Creativity, Influencing Others, Managing
Performance, Providing Feedback, and Retaining Talent.
Harvard Business School Publishing. Decision Making. Boston: Harvard Business School
Publishing, 2002.
Based on research and writings of leadership experts, this program examines the frameworks
for making decisions, decision-making biases, and the role of intuition in this context.
Increase the decision-making confidence in an organization by equipping managers with the
interactive lessons, expert guidance, and activities for immediate application at work.
Managers will learn to recognize the role intuition plays in decision making, apply a process to
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complicated decisions, identify and avoid thinking traps, simplify complex decisions, and
tackle fast decision making.
This program will help you understand why disagreements occur and help you build
conclusions collaboratively. These productive dialogue skills will lead to a more accurate,
shared understanding of the information exchanged in your daily interactions. Managing
Difficult Conversations examines techniques for approaching and handling difficult business
conversations. The program explores how mental models influence our private thinking and,
thus, our behavior. It presents the Left-Hand Column exercise as a technique for unveiling and
examining our internal thought process. The program also examines five unproductive
thinking habits that many people fall into during difficult conversations and five productive
alternative ways of thinking. By examining your own thinking habits and actively seeking more
productive mind-sets, you can learn to approach difficult conversations with confidence, avoid
blaming, overcome defensiveness, and make better business decisions.
This program shows managers how to craft conversations that are fact based, minimize
defensiveness, and draw out the best thinking from everyone involved. Productive Business
Dialogue introduces the Ladder of Inference, a tool that helps participants in a dialogue
understand the distinctions among fact, interpretation, and conclusions and how making these
distinctions clear can dramatically enhance the productivity of meetings and discussions.
Through interactive, real-world scenarios, you will practice shaping interactions that maximize
learning and lead to better informed decisions.
Source Notes
Learn
Constance E. Bagley. "The Ethical Leader's Decision Tree." Harvard Business Review,
February 2003.
Max H. Bazerman. Judgment in Managerial Decision Making. New York: John Wiley & Sons,
2002.
Sir Adrian Cadbury. "Ethical Managers Make Their Own Rules." Harvard Business Review,
September-October 1987.
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Decision Making - Harvard ManageMentor Page 79 of 81
Ram Charan. "Conquering a Culture of Indecision." Harvard Business Review, April 2001.
Mattison Crowe. "Why the Members of Your Team Won't Speak Up, and What You Can Do
About It." Harvard Management Update, November 1996.
Peter F. Drucker. "The Effective Decision." Harvard Business Review, January-February 1967.
David A. Garvin. General Management: Processes and Action. Boston: McGraw-Hill, 2002.
David A. Garvin and Michael A. Roberto. "What You Don't Know About Making Decisions."
Harvard Business Review OnPoint Enhanced Edition. Boston: Harvard Business School
Publishing, September 2001.
Loren Gary. "Cognitive Bias: Systemic Errors in Decision Making." Harvard Management
Update, April 1998.
Loren Gary. "Problem Solving for Decision Makers." Harvard Management Update, December
1997.
John S. Hammond, Ralph L. Keeney, and Howard Raiffa. "Even Swaps: A Rational Method for
Making Trade-Offs." Harvard Business Review, March-April 1998.
John S. Hammond, Ralph L. Keeney, and Howard Raiffa. "The Hidden Traps in Decision
Making." Harvard Business Review, September-October 1998.
W. Chan Kim and Renée A. Mauborgne, "Fair Process: Managing in the Knowledge
Economy." Harvard Business Review, February 2000.
John F. Magee. "Decision Trees for Decision Making." Harvard Business Review, July-August
1964.
Nick Morgan. "Put Your Decision Making to the Test: Communicate." Harvard Management
Communication Letter, November 2001.
David Straus and Pat Milton. "Collaborative Decision Making." Development, July 2003.
Steps
Max H. Bazerman. Judgment in Managerial Decision Making. New York: John Wiley & Sons,
2002.
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Decision Making - Harvard ManageMentor Page 80 of 81
David A. Garvin and Michael A. Roberto. "What You Don't Know About Making Decisions."
Harvard Business Review, September 2001.
David A. Garvin. General Management: Processes and Action. Boston: McGraw-Hill, 2002.
Tips
Max H. Bazerman. Judgment in Managerial Decision Making. New York: John Wiley & Sons,
2002.
Mattison Crowe. "Why the Members of Your Team Won't Speak Up, and What You Can Do
About It." Harvard Business Review Update, November 1996.
Peter F. Drucker. "The Effective Decision." Harvard Business Review, January-February 1967.
David A. Garvin. General Management: Processes and Action. Boston: McGraw-Hill, 2002.
David A. Garvin and Michael A. Roberto. "What You Don't Know About Making Decisions."
Harvard Business Review, September 2001.
W. Chan Kim and Renée A. Mauborgne, "Fair Process: Managing in the Knowledge
Economy." Harvard Business Review, February 2000.
Nick Morgan. "Put Your Decision Making to the Test: Communicate." Harvard Management
Communication Letter, November 2001.
Tools
Max H. Bazerman. Judgment in Managerial Decision Making. New York: John Wiley & Sons,
2002.
David A. Garvin. General Management: Processes and Action. Boston: McGraw-Hill, 2002.
David A. Garvin and Michael A. Roberto. "What You Don't Know About Making Decisions."
Harvard Business Review, September 2001.
John S. Hammond, Ralph L. Keeney, and Howard Raiffa. "The Hidden Traps in Decision
Making." Harvard Business Review, September-October 1998.
Nick Morgan. "Put Your Decision Making to the Test: Communicate." Harvard Management
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