Introduction to Decision Making

1. Decision
Making
A Skill We
Can Improve
Jim Marteney

2. Population
of Turkey
Greater or
Less
Than
35,000,000

3. Population
of Turkey
78,785,548

4. Mental Trap
Unconscious mental routine
that leads us to make poor
decisions

5. Anchoring
Trap
Initial impressions,
estimates, or data
anchor subsequent
thoughts and
judgments.

6. Anchoring
Trap
Mind gives
disproportionate weight
to the
first information it
receives.

7. Status Quo
Trap
We instinctively
stay with
what seems
familiar.

8. Status Quo
Trap
We look for decisions
that involve the least
change

9. Status Quo
Trap
More alternatives,
stronger status
quo

10. Status Quo
Trap
People want to
avoid, “rocking
the boat”

11. Status Quo
Trap
Sins of
commission
punished more
than
sins of omission

12. Justify Past
Actions Trap
more invested in the
past, more difficult
to change
Don’t cultivate
a fear of
failure culture

13. Framing
Trap
The way a problem is
worded or “framed” can
profoundly influence the
choices one makes

14. Framing
Trap
People are:
risk averse when a problem
is posed in terms of gains
risk seeking when a
problem is posed in terms
of avoiding losses

15. Framing
Trap
Which would you choose?
A sure gain of $3,000
80% chance of winning
$4,000
and a 20% chance of
winning
nothing

16. Framing
Trap
Which would you choose?
A sure loss of $3,000
80% chance of losing
$4,000
and a 20% chance of
losing
nothing

17. Framing
Trap
“Bird in the
hand, worth two
in the bush.”

18. Decision
Making
How much is
influenced by
actual
thought?

19. Two Types of Decisions
Voluntary Decision Making
Involuntary Decision Making

20. The Critical Thinker
One who refuses to
complacently accept
conclusions, one
who analyzes and
evaluates eviencd
in order to
distinguish strong
reasoning

21. The Critical Thinker
unlike the
uncritical thinker
who accepts or
rejects
conclusions, often
on the basis of
egocentric
attachment or
unassessed bias.

22. Daniel
Kahneman

23. Daniel
Kahneman

24. Amos
Tversky

25. Try Their
Test
You are at a Would you go
store in one down to the
end of the other end of
mall about to the mall to
purchase a purchase the
calculator for same calculator
$25 for
$20

26. Try Their
Test
You are at a Would you go
store in one down to the
end of the other end of
mall about to the mall to
purchase a purchase the
computer for same computer
$2000 for
$1995

27. We Don’t Notice
Everything

28. Lateral
Thinking
Edward de Bono

29. Lateral
Thinking
Story of evil money
lender, debtor and
his beautiful
daughter

30. Lateral
Thinking
Engine Intelligence
Fuel Knowledge
Tuned Thinking
Smart = the integration of all
three

31. Identify the Problem
“A problem well stated
is a problem half
solved.”
Charles
Kettering

32. Identify the Problem
“The only difference
between a problem and
a solution is that
people understand the
solution.”
Charles
Kettering

33. Identify the Problem
“If I had only one hour
to save the world I
would spend fifty-five
minutes defining the
problem and only five
minutes finding the
solution.”
Albert Einstein

34. Identify the Problem
Difference Between
Cause of a Problem
Effect of a Problem

35. Identify the Problem
Fishbone Analysis
Dr. Kaoru Ishikawa

36. Identify the Problem
Fishbone Analysis

37. Making a Decision
Gut Feeling
Positive, Negative,
Interesting
Cost/Benefit Analysis

38. Gut Feeling
“It is a feeling that you
know, but still have a
hard time to explain it”
Malcolm
Gladwell

39. Gut Feeling
“It is a feeling that you
know, but still have a
hard time to explain it”
Malcolm
Gladwell

40. Positive/Negative/Interesti
A good way of
weighing the pros,
cons and implications
of a decision.
Peter Ueberroth

41. Positive/Negative/Interesti
Positive What’s good?
Negative What’s bad?
What would you be
Interesting
curious about?

42. “Should we
charge for
the privilege
of carrying
the Olympic
Torch?”

43. Positive/Negative/Interesti
All marriages are no longer
“Till Death do you part.”
Marriages now only last
5 years.

44. Cost/Benefit Analysis
Everything
has a Cost
Money
Time
Personnel
Confusion
Bad Feelings

45. Cost/Benefit Analysis
Everything
has a Cost
Does the Benefit
outweigh that
Cost?

46. Cost/Benefit Analysis

47. Cost/Benefit Analysis
Benefit

48. Cost/Benefit Analysis
Cost
Benefit

49. Cost/Benefit Analysis
Text Text Text
Text Text Text
Text Text Text
Cost
Benefit

50. Cost/Benefit Analysis
Select Low
Hanging Fruit
“Targets or goals which
are easily achievable
and which do not
require a lot of effort.”

51. Asking the Right Questions
 Is there a
Problem?
 How Significant is the
Problem?
 Structural or
Attitudinal?
 Is there a Solution?
 Will the Solution Solve the Problem?
 What are the negative
effects?
 Negative aspects outweigh the benefits?

52. Asking the Key Questions
Failed to
ask Key
Question
Did Japanese
households
have
conventional
western ovens?

53. Now, for
the Case
Studies

54. Your Turn to Decide