Decision Quality: Value Creation from Better Business Decisions

Add value with every decision using a simple yet powerful framework Few things are as valuable in business, and in life, as the ability to make good decisions. Can you imagine how much more rewarding your life and your business would be if every decision you made were the best it could be? Decision Quality empowers you to make the best possible choice and get more of what you truly want from every decision. Dr. Carl Spetzler is a leader in the field of decision science and has worked with organizations across industries to improve their decision-making capabilities. He and his co-authors, all experienced consultants and educators in this field, show you how to frame a problem or opportunity, create a set of attractive alternatives, identify relevant uncertain information, clarify the values that are important in the decision, apply tools of analysis, and develop buy-in among stakeholders. Their straightforward approach is elegantly simple, yet practical and powerful. It can be applied to all types of decisions. Our business and our personal lives are marked by a stream of decisions. Some are small. Some are large. Some are life-altering or strategic. How well we make those decisions truly matters. This book gives you a framework and thinking tools that will help you to improve the odds of getting more of what you value from every choice. You will learn: The six requirements for decision quality, and how to apply them The difference between a good decision and a good outcome Why a decision can only be as good as the best of the available alternatives Methods for making both "significant" and strategic decisions The mental traps that undermine decision quality and how to avoid them How to deal with uncertainty—a factor in every important choice How to judge the quality of a decision at the time you're making it How organizations have benefited from building quality into their decisions. Many people are satisfied with 'good enough' when making important decisions. This book provides a method that will take you and your co-workers beyond 'good enough' to true Decision Quality.

Table of Contents:
Acknowledgments xiii Preface xv Part I The Decision Quality Framework 1 1 The Power of Decisions 3 Decision Quality: A Framework for Better Decisions 4 Decision Skills Can Be Learned 5 Decisions versus Outcomes 6 Key Points to Remember 8 Endnotes 9 2 The Requirements for Decision Quality 11 The Appropriate Frame 13 Creative Alternatives 13 Relevant and Reliable Information 14 Clear Values and Tradeoffs 15 Sound Reasoning 16 Commitment to Action 16 Judging the Quality of a Decision 17 Key Points to Remember 19 Endnotes 19 3 Getting to Decision Quality 21 Declaring the Need for a Decision 21 Setting the Decision Agenda 23 Understanding the Destination of Decision Quality 23 Avoiding Decision Traps and Biases 24 Designing the Decision Process through Diagnosis 25 Tailoring to Fit the Decision 30 Key Points to Remember 32 Endnotes 33 Part II The Six Requirements for DQ 35 4 The Appropriate Frame 37 A Friday Afternoon Dilemma 37 The Key Components of a Frame 39 Framing the Friday Afternoon Dilemma 41 An Extended Example: The House Decision 42 Developing an Appropriate Frame 43 The Decision Hierarchy: A Tool for Framing 44 Things That Can Go Wrong 46 Judging the Quality of a Decision Frame 47 Key Points to Remember 49 Endnotes 49 5 Creative Alternatives 51 Characteristics of Good Alternatives 53 The Strategy Table: A Tool for Defining Alternatives 56 Things That Can Go Wrong 57 Judging the Quality of Alternatives 60 Key Points to Remember 63 Endnotes 64 6 Relevant and Reliable Information 65 Information from a Decision Perspective 65 An Extended Example: Michael’s Job Choice 67 Structuring the Relevant Information in a Decision 68 The Decision Tree: A Tool for Structuring a Decision 68 What is Reliable? 72 Things That Can Go Wrong 74 Judging the Quality of Information 75 Key Points to Remember 78 Endnotes 79 7 Clear Values and Tradeoffs 81 Values and Tradeoffs for Decisions 82 Michael’s Values and Tradeoffs 82 Values in a Business Context 85 Making Tradeoffs in Business Decisions 86 Things That Can Go Wrong 88 Judging the Quality of Values 89 Key Points to Remember 91 Endnotes 91 8 Sound Reasoning 93 Reasoning for Michael’s Job Decision 94 Reasoning in More Complex Decisions 97 The Relevance Diagram: A Tool for Structuring Complex Decisions 97 The Decision Model: A Tool for Analyzing Complex Decisions 98 The Tornado Diagram: A Tool for Displaying the Relevance of Information 99 Flying Bars: A Tool for Displaying Overall Uncertainty 102 Things That Can Go Wrong 103 When to Get Help with Reasoning 104 The Power of Iterating from a Simple Start 105 Judging the Quality of Reasoning 105 Key Points to Remember 109 Endnotes 110 9 Commitment to Action 111 Two Mindsets: Decision and Action 111 Commitment through Participation and Ownership 113 Conscious Commitment 115 Things That Can Go Wrong 115 Judging the Quality of Commitment to Action 117 Key Points to Remember 119 Part III How to Achieve DQ 121 10 Biases and Traps in Decision Making 123 Mechanisms of the Mind 123 Protection of Mindset 126 Personality and Habits 128 Faulty Reasoning 130 Automatic Associations and Relative Thinking 133 Social Influences 137 Summing Up 138 Endnotes 139 11 Megabiases that Undermine DQ 143 DQ and Megabiases 144 Megabias #1: Narrow Framing 144 Megabias #2: The Illusion of DQ 147 Megabias #3: The Agreement Trap 149 Megabias #4: The Comfort Zone Megabias 150 Megabias #5: The Advocacy/Approval Myth 152 General Guidelines for Avoiding Megabiases 154 Endnotes 154 12 Achieving Quality in Strategic Decisions 157 The Dialogue Decision Process 158 Four Phases of Dialogue 161 Every Decision Situation is Different 163 Advantages of the DDP 164 13 Achieving Quality in Significant Decisions 169 The DQ Appraisal Cycle: Iterating Our Way to DQ 170 The DQ Appraisal Cycle in Action: Robin’s Career Crossroads 176 Summing Up 187 Part IV The Journey to DQ 189 14 The Amoco Unleaded Gasoline Decision 191 Getting Started on the Unleaded Decision 194 Seeking Greater Clarity on the Key Uncertainty 196 Competing Reports 198 The Bottom Line 201 Decades of Experience in Improving Value 202 Endnote 203 15 Building Organizational Decision Quality 205 Organizational DQ 207 The Components of ODQ 207 Reaching ODQ 209 Chevron’s Journey to ODQ 212 Taking the First Step 213 Endnote 214 16 Embarking on the DQ Journey 215 What Next? 216 References 219 About the Authors 223 Index 225

About the Author :
CARL SPETZLER is the cofounder, chairman, and CEO of Strategic Decisions Group (SDG), a leading strategy consulting firm renowned for its expertise in strategic decision- making for greater value creation. HANNAH WINTER is a partner, strategy consultant, and educator with SDG, where she leads the firm's 10-year education partnership with Stanford in strategic decision making. JENNIFER MEYER leads client engagements at SDG, resulting in hundreds of millions of dollars in added value through better strategic decisions. More at Strategic Decisions Group's website www.sdg.com