Decision Making at the Individual, Group and Organizational Level

1. DECISION MAKING
for the
PROJECT LEADER
Raza Usman, PMP®
May 2014

2. Focus on Decisions in Projects
In project management, decisions are required throughout the Triple
Constraints:
• Scope (how much functionality, at what quality level, for how many
users, etc.)
• Schedule (can activities be crashed, can activities be aligned
differently, can a provider change its schedule, can you skip/defer
activities, can milestones be missed or eliminated, etc.)
• Cost (can a segment of work be allowed to come in over cost; can
you reduce the cost of a segment; can you afford a scope change,
etc.)

3. The Anatomy of Decision Making
Prefrontal Complex is
highly implicated in
decision making
The Good Guys The Bad Guys
DLPFC
OPC
Fear is the Mind Killer

4. The Anatomy of Decision Making
DLPFC
Verbal &
Design
Fluency
Planning
Working
Memory
Reasoning
Problem
Solving
Shift Set
OPC
Impulse
Control
Maintenance
of Set
Monitor
Ongoing
Behavior
Rewards
based on
Sensory
Stimuli

5. Steps to Improve Decision Making
Nutrition
Daily Multivitamin
Good Carbs
Protein from Diverse Sources
(FISH, FISH, FISH!).
Fruits
Vegetables
Weight loss improves memory and alters brain activity in overweight women
June 17, 2013, Endocrine Society
Cardio – 30 min (Doctor!)
Strength 1-2 Hrs (Doctor!)
Yoga
Exercise
Exercise reorganizes the brain to be more resilient to stress
Posted July 3, 2013, Princeton University
Sound
Sight
Touch
30 MinMindfulness
Meditation
Mindfulness meditation can improve decision-making, new study suggests
February 12, 2014, Wharton

6. Decision Making : Introduction
• We will be looking at decision making failures at the:
Individual Group & Organizational level

7. The CEO decides
• It entails simultaneous decisions at multiple levels
Decisions are made in the room
• work happens “off-line”
Meetings ratify decisions
Decisions are intellectual exercises
• social pressures, politics and emotions influence
decision making
Managers analyze & decide
• Decision making is non-linear
Decision Making: Myths

8. Individual Level

9. Bias
Social
Halo Effect
Self Serving Bias
Memory Bias
Rosy retrospection
Consistency
Decision Making Bias
Not Invented Here
Basic Rate fallacy
Confirmation bias
Probability / Belief Bias
Overconfidence effect
Subadditivity effect
Optimism bias
Ingroup Bias
Hindsight bias
Déformation
Professionnelle
Recency effect
Planning Fallacy
Fundamental
Attribution Error
Semmelweis reflex
Many More

10. Bias
Social
Halo Effect
Self Serving Bias
Memory Bias
Rosy retrospection
Consistency
Decision Making Bias
Not Invented Here
Basic Rate fallacy
Confirmation bias
Probability / Belief Bias
Overconfidence effect
Subadditivity effect
Optimism bias
Civilians vs Defense Personnel
Ingroup Bias
Hindsight bias
Déformation
Professionnelle
Recency effect
Planning Fallacy
Fundamental
Attribution Error
Semmelweis reflexLook at things according to one’s own
profession, discounting the broader
view point

11. Bias
Social
Halo Effect
Self Serving Bias
Memory Bias
Rosy retrospection
Consistency
Decision Making Bias
Not Invented Here
Basic Rate fallacy
Confirmation bias
Probability / Belief Bias
Overconfidence effect
Subadditivity effect
Optimism bias
Civilians vs Defense Personnel
Ingroup Bias
Hindsight bias
Déformation
Professionnelle
Recency effect
Many More
Planning Fallacy
Fundamental
Attribution Error
Semmelweis reflexLook at things according to one’s own
profession, discounting the broader
view point
The tendency to underestimate task
completion times.
The tendency to reject new evidence if
it contradicts an established paradigm.

12. Framing
Frames are mental
models-comprising of
tacit beliefs and
assumptions- that allow
people to create simple
mental models for
complex situations.
Two Competing Theories
Expected Value or Average
when assessing
a complex situation
Psychologists (Tversky / Kahnmen)
Wording (framing) of problem matters
Framing as gain or loss matters
e.g. How many patients survive as
opposed to how many patients died
Beliefs &
Assumptions

13. Framing
Frames are mental
models-comprising of
tacit beliefs and
assumptions- that allow
people to create simple
mental models for
complex situations.
Intelligence Agents May Be Prone to Irrational Decision Making
U.S. intelligence agents may be more prone to irrational inconsistencies
in decision making compared to college students and post-college adults
Beliefs &
Assumptions

14. Leaders Don’t impose your frame on your
team.
Don’t constrict alternatives
Teams Be aware of frames
Consider multiple frames
Define problems in different
ways
Test Assumptions
Framing: Solutions

15. Bias: In Project Management
A project manager frames current reports in light of positive
past reports. (Framing)
Seeks out data to confirm his frame. (Confirmation)
Disregards evidence that current data may indicate deviations
from baseline (Semmelweis Reflex)

16. Intuition
Intuition
The ability
to understand something
instinctively, without the need
for conscious reasoning
=
Past Experience
Intuitive Decision-Making Based on Expertise May Deliver Better Results
Than Analytical Approach
Intuition may be just as effective in decision-making as an analytical approach

17. Intuition: Communication
Karl Weick's 5-step process for communicating intuitive decisions to a team.
1. Here’s what I think we face.
2. Here’s what I think we should do.
3. Here’s why.
4. Here’s what we should keep our eye on.
5. Now, talk to me.

18. Analogy: Merits | Demerits
Merits
• Allows cumulative
knowledge
application.
• Avoid historical
mistakes.
• Allows lateral
thinking.
Demerits
• Focusing on
similarities ignoring
differences.
• Bias towards past
salient analogies.
• Not validating
assumptions
Associative Reasoning

19. Analogy : Improving our reasoning
Neustadt and May
techniques
2 Lists
similarities differences
Another List:
•Known
•Unknown
•Presumed
Goal: Separate Fact from Assumption

20. Steps of Decision Analysis in Project
Management
Decision
Framing
Modelling the
Situation
Quantitative
Analysis
Actual
Performance
Tracking
• Identify Risk
• Assessing
Business
Situations
• Determine
Success
Criteria
• Generate
Alternatives
• Quantify
Uncertainties
• Quantify Risk
• Is additional
Information
Required
• Decide on
Course of
Action

21. Tools of Decision Analysis
RACI Chart
Decision Threshold Matrix
Brainstorming
Delphi Technique
Group Decision Making Techniques
Mind Mapping
WBS
Project Scope Statement
Project Network Diagram
Estimating
Critical Path Analysis
Monte Carlo Analysis
Variance Analysis

22. Group

23. Wisdom of the Crowds
Groups can make
better decisions
than individuals
• Pool diverse talents
• Achieve synergistic
benefits
Many groups do
not realize those
potential
synergies;
• they experience
process losses (do
worse than the best
individual in the group)
Preconditions Diversity: Many different disciplines, perspectives, and areas of
expertise.
Decentralization: people with local and specific knowledge can
contribute.
Aggregation of individual judgments.
Independence: no pressures for social conformity.

24. Groupthink : Symptoms | Results | Signs
Groupthink
• Team pressured into conformity
• Loss of critical thinking.
• Yes Sir!

25. Groupthink : Symptoms | Results | Signs
Invulnerability
Conformance
Superiority
Stereotyping
No Democracy
False
unanimity
Self
Censorship
Control and
filtering of
information
Few Alternatives
Risk planning
suffers
Rejected options
not reconsidered
Outside help not
sought
Confirmation bias
Contingency
planning suffers
Meetings are not
contentious
Junior members
stay quiet
Planning stage is
more about
paperwork than
ideas
Meetings
dominated by few.
Rubberstamping
Protocol across
communication
levels is rigid
Dissent not
tolerated

26. Groupthink
Women Speak Less When They're Outnumbered
“Results showed that the consensus-building approach was particularly
empowering for women who were outnumbered by men in their group”
Prevent Groupthink by using the Delphi Technique

27. Debate : Solutions
Channel
Debate
Refocus attention and provide alternative view.
Ask polite non threatening questions.
Enhance creativity & understanding with creative
data & ideas.
Revisit basic facts and assumptions
Keep common ground ready for intervention.
Reevaluate discussions for lessons learnt.
Share best practices
Are
questions
probing?
Is group
seeking
new
information
?
Are
revisions
based on
feedback?
Is
ambiguous
data
interpreted?
Are new
arguments
being used or
are people
entrenched?
Quiet
individuals
withdrawing?

28. Justice
Decisions require
consensus &
convergent thought
Effective Teams
need to implement
good decisions
Consensus can
only be reached if
the decision
process is
deemed to be fair
People don’t only care about
the verdict. They also care
about the process.
People losing a verdict were
happier if the process was
deemed fair
Components of a Fair Process
1. People are free to express their views
2. People agree decision making process is fair
3. Leadership listens and incorporates ideas
4. Clear rationale for final decision is given

29. Small Wins
Gather views
& ideas
Filter Decide
Prescriptive process model
• Filter
• DecideIdea
• Filter
• DecideIdea
• Filter
• DecideIdea
Small Wins process model Avoids
Polarization.
Increases
Productivity
Careful of
• People going back on their decisions. Keep people accountable.
• Losing the trust of others.

30. Organization

31. Normalizing Deviance
Diane
Vaughan’s
Unexpected
Expected
Accepted
Added to organizational culture

32. Practical Drift
Scott
Snook
Organization
• Rules
• Procedures
Organizational
Units
• Practical Action
• Locally mandated & efficient
Organizational
Unit
• Local action become accepted practice
Organizational
Unit
• Practice drifts from procedure

33. Avoidance tips for Practical Drift and Normalizing Deviance
1. Organizational structures and systems transparency.
2. Avoid fast fixes.
3. Open Communication.
4. Procedural hand-over of information
5. Disrupt silos.
6. Design effective cross-functional teams.
7. After-action reviews to improve processes.

34. Proactive Problem Solving
HRO : High Reliability Organization
Complex organizations in high-risk environments low
failure rates e.g Aircraft Carriers
Path
to an
HRO
Emphasis on failure.
Avoid simplifying interpretations.
Sensitivity to operations.
Commitment to resilience.
Expertise utilized from all levels of the
organization.

35. Proactive Problem Solving
Leadership
Problems
On time problem
Identification
Solving the wrong
problem
Leadership
Requirements
Proactive Problem
Solving
Open to solutions
Right question not
only right answer

36. Decision Making
We looked at decision making at the:
Individual Group & Organizational level

37. Thank You