2. The Eight Elements of Effective
Decisions
Problem
Objectives
Alternatives
Consequences
Tradeoffs
Uncertainty
Risk Tolerance
Linked Decisions
3. Effective Decision Making
Problem
Be creative about your problem definition.
Turn problems into opportunities.
Reexamine your problem definition as you go.
Maintain your perspective.
4. Effective Decision Making
Objectives
Let your objectives be your guide.
Objectives determine what information you seek.
Objectives can help you explain your choices to others.
Master the art of identifying objectives.
5. Effective Decision Making
Alternatives
Don’t box yourself in with limited alternatives
Use your objectives and ask “how?”
Set high aspirations
Never stop looking for alternatives
Think outside the box
Brainstorm (See Rules for Brainstorming)
Give your subconscious time to operate
Incubate
6. Effective Decision Making
Consequences
Compare alternatives using a payoff matrix.
See Game Theory presentation at
http://www.charleswarner.us/indexpresentations.html/
Use experts to help define consequences.
9. Effective Decision Making
Uncertainty
Use risk profiles to simplify decisions involving
uncertainty.
What are the key uncertainties?
What are the possible outcomes of these uncertainties?
What are the chances of occurrence of each possible
outcome?
What are the consequences of each outcome?
Use experts to help define possible outcomes.
12. Effective Decision Making
Risk Tolerance
Understand and calibrate your group’s tolerance to
take risks.
Incorporate your risk tolerance into all of your
decisions.
13. Effective Decision Making*
Linked Decisions
Linked decisions are complex.
Ask: “How will this decision affect other people, other
departments, other brands, other company divisions,
partners, the industry?”
*
Based on the book Smart Choices: A Practical Guide to Making
Better Decisions, John S. Hammond, Ralph L. Keeney, Howard
Raiffa, Harvard Business School Press, 1999.