While HOW to make decisions is important, the WHEN to make decisions is critical to your chances of success. Olav and Chris present Real Options, an approach they have been working on since 2006 that focuses on the “When” rather than the “How” of decision making. Timing is everything, however deferring commitments causes stress to many people. Real options helps you manage that stress by creating bounded uncertainty in an context of total uncertainty. This is not a simple process that you copy and learn to adopt through practice. This is a new way at looking at the world around you that starts by learning to differentiate between options and commitments. Olav and Chris help do this through an interactive exercise. It turns out that the way you manage your options is to focus on commitments and attempt to avoid or defer them. After identifying commitments, Olav and Chris discuss creating options to turn the commitments into reversible commitments. Olav and Chris have recently creating “Commitment”, the first graphic business novel about managing project risk. Because they eat their own dog food Real Options plays a big part in the creation part of the book as well. They present the creation process as a case study about applying Real Options and how that leads to different behavior. Finally they present a number of mini case studies where other people have applied Real Option thinking in “out of the box” situations. Once you get it, it will change your life.
Olav Maassen: RISK AND DECISION: THE ‘WHEN’ RATHER THAN THE ‘HOW’ - LKCE13
1. #LKCE13 #realoptions
November 5, 2013
Risks and Decisions
The ‘When’ rather than the ‘How’
Olav Maassen
Xebia
info@commitment-thebook.com
@OlavMaassen
Chris Matts
Emergent Behavior
chris.matts@gmail.com
@PapaChrisMatts
5. Agenda
Real Options: understand the difference
between an option and a commitment
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Options and commitments
Reversibility of decisions
Applying Real Options in writing a book
Real world examples
5'
11. • This talk
• Could we walk of the stage?
• Hotel this morning (what’s the consequence of not
showing up: Nils panic, never invited again, reputation
shot)
• Is the hotel a commitment
• Is the flight a commitment
• What about five minutes after it has taken of?
• Nils asked us: commitment or option?
• What about the actual event
• If the event got cancelled would we still go?
• Lady gaga concert?
11'
96. How will we decide?
• IF the new blue design is completely stable
• AND if the estimate of the blue design < 2
months
• THEN we use the blue design
• ELSE we use the yellow design AND we’ll
plan the blue redesign once the blue design
is stable
• Meeting: August 1st
97. Meanwhile...
• We develop the site in “black & white”
• One team member participates in the
followup meetings of the new design (2
hours every 2 weeks) and keeps the team
informed of the situation
98. The day is not done yet
• A few more questions:
• Developers, what changes when the design
changes?
• Developers show architecture and code
• What if there was less to change?
• Quick architectural “spike”: remove duplication,
separate concerns...
• How much to refactor the site?
• “We can do it in a few days”
• “Afterwards, any redesign costs less than 1 month”
103. Key take aways
• Be aware of options and commitments
• For the conference:
– How does this create options for me?
– How does this allow me to push conditions to
a later date in order to gather more info?
103'