Six Key Decision Making Techniques - Free eBook in PDF Format

Book Description - ISBN 978-1-65522-277-8 (43 Pages)
This free eBook describes six key decision making techniques that bring structure to the decision making process. These techniques can be used in isolation or can be combined in order to make decisions in a rational way that can be justified later if this is necessary.

Chapter 1 - The Kepner-Tregoe Matrix
The Kepner-Tregoe Matrix helps you sort out all of the important factors before making your final decision. This matrix guides your thoughts when tackling an important decision. It enables you to frame the question at hand in a number of important ways so that you select the ‘best possible’ choice available. It consists of four steps, which are - Situational Analysis, Problem Analysis, Decision Analysis and Potential Problem Analysis.

Chapter 2 - Decision Matrix Analysis
Making a decision based on weighing up the various options you have identified is common amongst management. The model, Decision Matrix Analysis is ideal because it allows you to create your own matrix rather than have to use a pre-designed one. This means it can be customized to the needs of the organization and can be created relatively quickly.

Chapter 3 - The Analytic Hierarchy Process
The Analytic Hierarchy Process applies a mathematic approach to decision-making. This model relies on mathematics to help you make an unbiased, logical decision based completely on the factors that have been identified as important in the selection process. There are three crucial levels to the Analytic Hierarchy Process tool - the goal, the criteria and the alternatives. It may not be as simplistic as other models but it is accurate in showing you the best available option.

Chapter 4 - Pareto Analysis
Pareto Analysis is based on the famous Pareto Principle - 20% of the work you do will generate 80% of the results you are looking for. There is no direct relationship (1:1) between the work you do and your results. The key is to pick out the right work to do, so that you can attain the majority of your desired results without having to do all the work.

Chapter 5 - The Futures Wheel
Decisions would be easy if we could accurately predict the future. The tool ‘the Futures Wheel’ was developed to assists management in judging the potential outcomes that are likely to occur as a result of the decisions they have made. It is quite simplistic in its approach and helps to keep your organization on the right track.

Chapter 6 - Force Field Analysis
Force Field Analysis is a popular and powerful decision making tool. It helps management tool to determine whether or not they should continue with their plan or alter its course. This tool is an excellent way to recognize and appreciate both sides of a potential change so that you can see how effective it would be.

Today's Top Picks for Our Readers:

Recommended by

What is The Kepner-Tregoe Matrix?

• The Kepner-Tregoe decision making model is a four step process for gathering information and prioritizing and evaluating it.
• Step One – Situational Analysis: Clarify the situation, outline concerns and choose a direction.
• Step Two – Problem Analysis: Define the problem and determine its root cause.
• Step Three – Decision Analysis: Identify alternatives and perform a risk analysis fir each one.
• Step Four – Potential Problem Analysis: The best of the alternatives is further scrutinized against negative consequences and actions are proposed to minimize the risk.
• Only the most important decisions you face require this level of analysis because of the time required to perform it properly.

What is Decision Matrix Analysis?

• A decision matrix is a list of values in rows and columns that allows an analyst to systematically identify, analyze, and rate the performance of relationships between sets of values and information.
• It can be used when the decision must be made on the basis of several criteria and a list of options must be narrowed to one choice.
• It is useful for looking at a large number of decision factors and assessing each factor’s relative significance.
• For example, where there are X alternative options that each need to be assessed on Y criteria, the resulting matrix will have X rows and Y columns.
• Each of the criteria will be assigned a score, which can then be summed in order to produce an overall numerical score for each option.
• A further refinement is to weight each of the criteria depending on its relative importance.

What is the Analytic Hierarchy Process?

• The Analytic Hierarchy Process applies a mathematic approach to decision making.
  
• There are three levels within the Analytic Hierarchy Process: the goal, the criteria and the alternatives.
• Choose a goal and assign it a value of 1.000. Everything that takes place below your goal is going to have to add up to a total value of 1.000.
• Decide on the decision criteria, each will be given a weight such that the total of all criteria used adds up to a total of 1.000.
• All of the potential choices that you could make are going to be listed as alternatives to be rated on the criteria that you have established.
• By using the rating scores that you issue for each alternative, along with the weights that you have given the criteria in question, you can derive a score for each option that will help you declare a winner.

What is Pareto Analysis?

• Pareto Analysis is based on the famous Pareto Principle, which states that 20% of the work you do will generate 80% of the results you are looking for.
• It is a useful technique for prioritizing problem-solving work, so that the first piece of work you tackle simultaneously resolves the greatest number of problems.
• Step One: Identify the Problems: Make a a list of problems that you would like to solve.
• Step Two: Match Up Root Causes: give each problem an assigned ‘root cause’, this is the main issue that is leading to the existence of the problem.
• Step Three: Give Each Problem a Score: Go through your list of problems and give each one a score based on its importance.
• Step Four: Create Groups Place them into groups which all have the same root cause. Look down your list and find problems that you feel will be fixed by the same solution.
• Step Five: Complete the Analysis: Add up the scores and see where you stand. Which group has the highest score? That is the group that you should be addressing first.
• Whilst Pareto Analysis appears to be totally objective, you need to be aware of its limitations.
• It takes no account of the relative difficulty of tackling each underlying cause.
• It can be difficult to quantify each problem using an objective score.
• It only looks at historical data.

What is the Futures Wheel?

• The Futures wheel is a method for graphical visualisation of direct and indirect future consequences of a particular change or development.
• It consists of a term describing a change that is positioned in the center of the page.
• Consequences following directly from the change are positioned around the change and linked to it.
• The consequences of those first level direct consequences are positioned at the next outward level and linked to the first level consequence.
• The result is usually a series of concentric circles that are interconnected.
• The use of interconnecting lines makes it possible to visualize interrelationships of the consequences of the change.
• The Futures wheel can help you to develop concepts about possible change by offering a futures-conscious perspective.

What is Force Field Analysis?

• In this model there are forces that drive change and forces that resist change.
• In order for change to occur the driving force must exceed the resisting force otherwise there will be no change.
• Start with your plan listed right in the center of the paper, you are now going to add two columns.
• On the left side of the paper, you are going to make a column which will included all of the forces in favor of the change you are proposing.
• On the right side, naturally, will be a column that includes the forces working against the potential change.
• You will list as many forces as you can think of in both the ‘for’ and ‘against’ columns.
• Go down your list of the points in the ‘for’ and ‘against’ columns and assign each one a score based on a scale that you will need to create.
• By adding up the totals for and against, you can see how strong resistance is, where it is coming from and what you will need to address to get the change to happen.