August 03, 2010 Category : Careers & Training
We all are decision makers and we make decisions every day every minute. Some decisions are simple and easy. But in business organizations, we face difficulties in decision making due to some complexity, insecurity, risk involved, outcome etc. You get confused on decisions like how to make the report more effective or what qualities should we look for a candidate etc. To overcome such difficulties, there are various decision making techniques introduced that have clear processes and helps organizations to get consistent and high quality results.
APPROACH TO DECISION MAKING
The above chart is self explanatory. The process of Decision making begins with identification of the problem. For effective decision making, it is very important to have a clear understanding of the problem. The next process is to produce as many good ideas as possible to solve the issue. The team can undertake brainstorming session in this stage to come up with great ideas. Thereafter, you need to evaluate the pros and cons of each alternative. The best alternative is selected as a decision and implemented as a solution. The process is further extended by reviewing, if the decision taken was effective. If not, the approach is repeated again.
SOME IMPORTANT DECISION MAKING TECHNIQUES:
Grid Analysis: Grid Analysis helps you to take decision confidently and rationally. It is particularly powerful where you have a number of good alternatives to choose from, and many different factors to take into account. It is also known as Decision Matrix Analysis, Pugh Matrix Analysis or MAUT, which stands for Multi-Attribute Utility Theory. Here, you create a table and write in possible solutions in different rows and factors responsible in columns. You then rate each solution with the factors responsible and the option with highest mark is the solution.
PMI : PMI stands for 'Plus/Minus/Interesting. To take a decision, you create three columns "Plus" / "Minus" / Interesting. List down all the pros in "plus", all the cons in "minus" and its impact in "interesting" column. Looking at the result, you can take a decision. If the decision is still not obvious, you can then score the table to show the importance of individual items.
Paired Comparison Analysis : In paired comparison analysis, different options are compared and the results are tallied with each other. The option with the highest score is the preferred option. It is useful where priorities are not clear. It helps you to set priorities where there are conflicting demands on your resources.
Force Field Analysis: Force Field Analysis is a useful technique for looking at all the forces for and against a decision. This is also a method based on pros and cons. Here, you create a table where you write down the plan in the middle, list all forces for change in one column, and all forces against change in another column. Then assign score to each force.
Parento Analysis: Also know as 80/20 rule, Pareto analysis believe that, doing 20% of the work can generate 80% of the benefit of doing the whole job. It is a decision making technique that is used for selection of a limited number of tasks that produce significant overall effect. Pareto analysis helps stimulate thinking and organize thoughts. It helps to identify the top 20% of causes that needs to be addressed to resolve the 80% of the problems.
Six Thinking Hats : Six Thinking Hats is an important decision making technique where you take decision based on different points of views. Here, you wear six different colors of hats while taking decision.
White Hat: With this thinking hat, you focus on the data available. Your decision is purely information based.
Red Hat: You look at the decision using intuition, gut reaction, and emotion.
Black Hat: You take decisions pessimistically, cautiously and defensively.
Yellow Hat: You take decisions positively. You have an optimistic view point.
Green Hat: This stands for creativity and helps in creative solutions.
Blue Hat: The Blue Hat stands for process control.
Starbursting: Starbursting is a form of brainstorming that focuses on generating questions rather than answers. It is more interactive. For example, a colleague suggests a new design of ice skating boot. One question you ask might be "Who is the customer?" Answer: "Skaters". But you need to go further than this to ensure that you target your promotions accurately: "What kind of skaters?" Answer: "Those who do a lot of jumping, who need extra support", and so on.
Stepladder Technique: The Stepladder Technique is a useful method for motivating individual participation in group decision. It encourages all members to contribute on an individual level before being influenced by anyone else. These results in a wider variety of ideas, it prevents people from "hiding" within the group.
Cost/Benefit Analysis: As the name suggest, here the decision is based purely by comparing the cost and the benefit. If the benefit is more, the decision is usually accepted.
The Delphi Technique: As opposed to face- to- face group discussions, Delphi Technique helps generate ideas anonymously. The experts answer questions in two or more rounds. Thereafter an anonymous summary of the experts from the previous round is provided. Thus, experts are encouraged to revise their earlier answers in light of the replies of other members of their panel. It is believed that during this process the range of the answers will decrease and the group will converge towards the "correct" answer.
The Vroom-Yetton-Jago Decision Model: The Vroom-Jago decision model is a rational model used by leaders to determine whether they should make a decision alone or involve a group, and to what extent the group should be involved. You may have to make an autocratic decision or participative decision or a combination of both. It helps to determine the best leadership style to adopt in a given situation.
KEY TO MAKING A GOOD DECISION:
- Be strong. Don't let fear stop you in anyway.
- If you make mistakes, do not let yourself down. Consider it as a good experience.
- Think positive. Positive attitude will definitely get you positive results.
- Be a visionary
- Always think from other's point of view. Put yourself in others' shoes while making decisions.