Decision Making

How to make efficient decisions

and what kind of techniques you
can use as a solution
Why it takes time to decide
Bad previous experiences
Scared of coincidences

Not know which decision should do first

Not allowed to decide
Other, after happening
not visible for me

Unsecure about others

New thing for the one who decides

Too many options

Analyzing too much Need to prioritize

There’s no clue where to relate

Many functions affected
Don’t see the result
How could decide better?
Support from others Roles are clear
Experience
Visible facts
See responsibilities

Confidence through success

See coincidences while making decision

Causal effects are seen

Classification for different decisions

Knowledge
Predefined process
Priority is seen

Easy to analyze during process

 Better decisions, faster decisions?
Usual problem in Europe isn’t that people are not able to decide,
but they need to spend too much time in analyzing

Asia for instance decisions may not take long time,

but approval/final decision is higher level

North America both of these can be fast but they often

lack the quality or final decision wasn’t the final

Developing countries may have

More education means more all of these problems
analyzing, spending time

Less education means more

relying to others, group

The key is to reduce time, add responsibility and visibility inside the process
Manager’s decisions
Decision making is a process
Find a mentor to go through
problems and options

Have an exit plan

Don’t use people as an excuse

Don’t be blue-eyed, think
always the best of others

Practice what you preach

Take time, but not too much

You need to decide
Leaving is hard
Analyze the problem,
describe the options
 Barack Obama’s decisions
When Barack Obama had to make big decisions during his time as president, he would
assemble a team to confer with him in the White House Situation Room. From there, he
used a set of specific guidelines to help him make a decision…

1. Listen to the people who will be most affected by the change

2. Realize there's no right answer — it's about weighing the odds
3. Seek out the naysayers (argue all sides)
4. Get outside the 'bubble' of people who are 'supposed' to advise you
5. Test your B.S. detector
6. Insist that people deliver bad news quickly and are not punished for honest mistakes

"Toughest decision was early in my presidency when I ordered 30,000 more troops into
Afghanistan,“ mr. Obama has said, "I think it was the right decision because the Taliban at
that point had gotten a lot of momentum before I'd gotten into office, partly because we
hadn't been paying attention as much as we needed to Afghanistan“.

https://www.businessinsider.com/obama-describes-situation-room-gives-advice-
for-making-hard-decisions-2018-5
https://www.ndtv.com/world-news/outgoing-us-president-barack-obama-opens-
up-about-his-toughest-decision-1646525
 Elon Musk’s decisions
'It's really helpful for figuring out the tricky things,‘ says Elon Musk…

1. Ask a question
2. Gather as much evidence as possible about it
3. Develop axioms based on the evidence, and try to assign a probability of truth to each
one
4. Draw a conclusion based on cogency in order to determine;Are these axioms correct,
are they relevant, do they necessarily lead to this conclusion, and with what probability
5. Attempt to disprove the conclusion; Seek refutation from others to further help break
your conclusion
6. If nobody can invalidate your conclusion, then you're probably right, but you're not
certainly right

Musk, who had $200 million in cash at one point, invested "his last cent in his businesses"
and said in a 2010 divorce proceeding, "About four months ago, I ran out of cash." Musk
told the New York Times' DealBook at that time, "I could have either done a rushed private
stock sale or borrowed money from friends."
https://www.inc.com/business-insider/how-elon-musk-makes-decisions-rolling-
stone.html
https://finance.yahoo.com/news/crucial-money-decision-elon-musk-
123000856.html
 Dalai Lama’s decisions
What we can learn from Dalai Lama?

1. Making the right decisions in difficult situation it is necessary to analyze it without

emotion and fear, without prejudice, to consult with sincere friends, and then make
a choice and do not regret it
2. Maximize their mental abilities and analyze again and again
3. Don’t accept emotions affect: strong emotions impede our ability to think
4. Decision needs to look at things soberly
5. Consult with each other with a few friends, sincere friends
6. Make the decision and not to feel regret

In a speech posted on the internet and delivered in the northern Indian hill town of
Dharamasala, the Tibetan Buddhist spiritual leader said he would ask the Tibetan
parliament in exile to make the necessary constitutional changes to relieve him of his
"formal authority" as head of the Tibetan community outside China.
Giving up of political doesn’t mean that his power got lost, it can be even bigger.

https://rusreality.com/2018/05/15/the-dalai-lama-told-how-to-make-a-
difficult-decision/
https://www.theguardian.com/world/2011/mar/10/dalai-lama-retires-from-
political-life-tibet
 Difficult business decisions 1/3
Difficult Employees

"Our company has grown from one to 15 team members in less than three years. After our
first year, we were billing big, had momentum in the market, and our company was quickly
becoming recognized as one that drives results. But as we grew to over 10 employees, our
team dynamic changed. Cliques started to form and personality conflicts were inhibiting
peoples' effectiveness, resulting in managers allocating a significant amount of time toward
resolution."

"Initially, I thought these were the normal growing pains of any small business. But when I
had a closer look, the problems were centered on one individual who was not only a friend
but also happened to be a tremendous revenue driver for us. The decision to cut ties, though
straightforward, was very difficult to come to terms with. That said, our team is happy again
and empowered by one another, poised to grow in 2015."

Erik Simins, EO Toronto

President, MAGNUS Personnel Corporation

Source: https://www.inc.com/entrepreneurs-organization/3-critical-
decisions-entrepreneurs-everywhere-may-face.html
 Difficult business decisions 2/3
Unprofessional Clients

"We learned the hard way that there are some businesses which respect the work they
engage agencies for, and others which consider the relationship similar to a master and
servant's. Several years ago, one of our clients represented a large portion of our revenue
and in our haste to offset this imbalance, we began working with a company of the master
and servant mindset."

"Initially, we were all in the honeymoon phase and didn't have any issues, but after a year,
we realized our client counterparts were unprofessional and verbally abusive to our staff. As
much as we needed the revenue and wanted this high-profile client on our roster, we
decided that integrity and respect is more important than money. We ended the
relationship amicably, and despite the drop in revenue, it was the best move we could have
made."

Lauren Boyer, EO New York

CEO, Underscore Marketing

Source: https://www.inc.com/entrepreneurs-organization/3-critical-
decisions-entrepreneurs-everywhere-may-face.html
 Difficult business decisions 3/3
Expansion

"Recently, I was presented with the opportunity to expand our service offerings beyond
healthcare IT, a critical decision because it would change the entire face of our company.
Our messaging, branding, sales strategy, staff, and culture would need to think bigger, see
bigger, and essentially become bigger.

"Expanding meant we'd become a global competitor in the applications space. Exciting?
Yes! Difficult? Absolutely. Since making this decision one month ago though, we have
increased our revenue by a quarter of a million dollars. I have also added two new members
to our team and they have fit right into our culture. We're excited about what the future
holds, across multiple areas in this industry."

April Cleek, EO Atlanta

President and CEO, EHR Concepts

Source: https://www.inc.com/entrepreneurs-organization/3-critical-
decisions-entrepreneurs-everywhere-may-face.html
Efficient decisions
• Simple decisions
▫ Recognize situations which come many times
▫ Classify them to know value of decision, less
valuable means not spend too much time
▫ Some simple decisions may have clausal effect and
they need system support

• What kind of decisions are simple?

▫ Workflow in behind (approval/check)
▫ Your every day tasking
▫ Decisions which need to be done, but are not
necessarily high impact
Efficient decisions
• More advanced decisions
▫ There can be more than one person involved to
make decision
▫ Beforehand setup impact and value
▫ More than one business functions or processed
involved
▫ Need analysis or reporting to support in making
decisions

• What kind of decisions are more advanced?

▫ Quotations, supply chain, stock level, hiring
▫ They take longer time to make
Efficient decisions
• Complex decisions
▫ These are new, even they are at the end simple
sometimes (not know how complex first)
▫ Must have a meeting or group of people involved
▫ Need more than one kind of expertise
▫ Always more than one business functions or
process involved

• What kind of decisions are complex?

▫ May need change in existing, compare options
▫ It’s not easy to say who should be involved or
make the final decision, what systems are needed
Machine learning
• Potential to use machine learning in any sort of
decisions is valuable
▫ Simple decisions, not to make them by any
individual but system
▫ More advanced decisions, to recognize and classify
and later having them as simple (and after
individual checks not need to decide by
individuals later o)
▫ Complex decisions, support in making analysis,
comparisons, use big data and other sources to
work for decision maker
Machine learning
• Machine learning is only a tool
▫ Pre-defined rules, data sets
▫ Algorithms, combinations and suggestions

• Setup by open source, but taught by a human-

being
▫ Decision makers can give input
▫ Classification rules and individuals can give rating
how valuable each decisions is
▫ If you forget the human part, the value will be less
later
Block chain
• Block chain is useful for tracking
▫ Complete track record which is not possible to
change by individual persons
▫ For many cases visibility and changes are more
than valuable
▫ Can be used to later analyze, learn what cases
decisions were valued wrong and should be
changed

• What each block can be used for?

▫ Single decisions, single block
▫ Later on system is learning based on blocks
Block chain
• Block chain is not only track record
▫ To evaluate and learn system must know how each
block is connected to another
▫ If you have for example 10 similar blocks, system
will then evaluate in between each block how
decisions can be faster and which one had better
results

• What block chain can’t be used for?

▫ To copy decisions, that’s done by other part of
system, machine learning
▫ To open blocks (they always keep unchanged)
Records, no block chain
• Some cases block chain is not needed
▫ More economic is to have centralized system with
records kept in order
▫ Still can see receipts/tokens that something has
happened in this particular record

• What could be done?

▫ For example Kupernetes have API that can store
data, get it back when went done and this API is
accessible by each applications
▫ Traditional transaction system like ERP are good
as well, just create complete visibility for users
Instincts
• Each individual has skillsets and instincts
▫ Your potential to make good decisions is based on
your skillsets, your learning and education
▫ Your capability to predict without complex
analysis is your instincts
▫ Instincts help you to know how to make correct
decisions, especially relate people and processes,
business functions

• What are instincts?

▫ Internal feeling, ability to see something tacit, not
visible tangible, explicit assets
Instincts
• Can systems have or build instincts?
▫ Not exactly, but they can learn from rules and
people
▫ Predictions are made by pre-defined rules,
comparing and evaluating outcomes

• Which instincts are most trustworthy?

▫ We all have different evaluations, it’s better to
make rulesets by a group
▫ After first rulesets are made, they need to be
evaluated time to time and teach more for the
system, like strategy or connections
Terminology
• GDSS = Group Decision Support System
▫ Typically environment where each person can
ideate and share with others
▫ After comprehensive analysis and discussion a
group can make final decisions
▫ Used for example in new product design and
strategy workshops
▫ Pretty old approach and may not work in the
future when more decisions are made faster and
each individual need to decide
Terminology
• IDSS = Interoperability Decision Support
System
▫ More military approach where each system and
team need to work together
▫ Collecting separate analysis in order to make
better decisions
▫ Highly dependent on system design, collaboration
and each part working efficiently
▫ Operators are able to make decisions by pre-
defined rules
Simple decision
• Typically no analysis or further investigation is
needed in this decision
▫ It can be modelled be pre-defined rules
▫ Any decision maker can easily find previous
decisions to follow the same

Input Output

Step 1: Step 2: Step 3:

record options decide
More advanced decision
• This decision may need advanced analysis, but
can still be made by one person
▫ Sophisticated techniques to support decision
maker may exist
▫ System can also allow or block decision

Input Output

Step 1: Step 2: Step 3: Step 4: Step 5:

record analysis options evaluate decide
Complex decision
• This type of decisions are new, unique but can
later be part of system supported analysis
▫ Since no previous, same decision analysis is
needed and can use similar type, non-unique
▫ Also some cases decision takes longer, needs
workshop or other group methodology

Input

Step 1: Step 2: Step 3: Step 4: Step 5: Step 6: Step 7:

record analysis workshop options prototype evaluate decide

Output
 Terminology
This is more Did I decide
GDSS IDSS
complex this before

Long Classify Collect Ad

time Decision maker hoc
in the center
Multiply Suggest

Can I
Machine learning: compare Tracking decisions:
analytical and other system each decision is
I will follow
gather a lot of data but can be completely tracked and
rule sets
used only after they are useful for later decisions,
evaluated by group Share with not necessarily block
others chain but central system
First analysis (classification)
• SWOT analysis
▫ Pre-defined rules
▫ Recognize risks
▫ Based on analysis take into careful processing or
to decide no need careful processing (instant
decision)

• Growth-share matrix
▫ Classify to groups by importance
▫ Use classification in decision to take into more
detail processing or group decision
SWOT analysis Recognize strength from
previous decision to reduce
time spent

Weakness Strength

Threat Opportunity

Recognize threats based on

classification before
Also learn from previous decisions
SWOT analysis Recognize previous weak points
and take into careful group decision to
learn for later

Weakness Strength

Threat Opportunity

See high value and take into

careful group decision
SWOT analysis example:
develop new product (or product line)

Weaknesses: Strengths:
1. Impact other processes 1. In line with strategy
2. High development cost 2. Basic solution available
3. Many people needed 3. Current workload low

Threats: Opportunities:
1. Customers will not adapt 1. Future cash flow high
2. Rivals/competitors faster 2. Gain new knowledge
3. Legislation changes 3. Position in market better
 Future affection - Functions matrix
How much decision affects to future

Stars Wild child

Cash cow Dogs

What’s the affect for functions/business process (all total)

 Future affection - Functions matrix
How much decision affects to future

Business process change New system go-live day

dramatically
Remove high level
Hire new person position/person

Add additional step in business

Improvement for product
processes (check/approval)
Fine tune existing process
Kill existing product

What’s the affect for functions/business process (all total)

 Cashflow - Decision matrix
How much cash flow

Stars Wild child

Cash cow Dogs

How many decisions in total to achieve result

 Cashflow - Decision matrix

Participate in new
How much cash flow

Negotiate project expansion project/program RFP

Kill project/program Start new project

Change already approved

Delay delivery
training day
Replace item in order
Product improvement (bulk)

How many decisions in total to achieve result

Second analysis (collection)
• Design thinking
▫ Only certain parts apply: first empathize and
second define problem, later phases not applicable
▫ First problem definition, what the initial
classification; second learn from user analysis and
problem solving

• Value stream mapping

▫ To recognize unnecessary decision processes
▫ Many decisions no need to spend a lot of time, this
kind of classification helps to reduce processing
▫ When user knows/gets alert it will easy them
Design thinking
• Case 1: Empathize

Input Output

• In the beginning you only get simple input and

after going it through the initial problem
description is created

• Empathize will only collect, not structure

Design thinking
• Case 2: Define problem
Output 1

Input
Output 2 Output 3

• After completion this phase there are more

options to make a resolution
• Using advanced techniques to help decision
maker
• Different support system or different people may
involve in decision making process
Design thinking
• Also other phases include decisions, but we don’t
include them into analysis of collection

• Design thinking prototyping may be a good way

to make final decisions of product or system but
it will not be suitable for analysis purposes

• As a way to do things design thinking useful

since when you know you follow the process, it
will make your decisions later automatically
easier (you know how to collect data)
Value stream mapping
• Recognize unnecessary processes

Decision 1

Decision 2

Decision 3
 Value stream mapping
• Recognize unnecessary processes
Gate analysis

Decision 1

Approvals
Decision 2

Review Changes

Decision 3
Value stream mapping
• Recognize decisions made without purpose

Output 1
Decision 1

Decision 2
Output 3

Output 2 Decision 3

Decision 4

Output 4
Value stream mapping
• Recognize decisions made without purpose

Common
rules setup
Decision 1

Decision 2
Delay due to
management
Additional Decision 3
approval step

Decision 4

Process
improvement
Multiply
• This technique is more as copying same problem
definition to new cases
▫ You use brainstorming
▫ Workshop
▫ Post-it on the wall or on-line system

• This can be also machine or system supported

▫ Sometimes in a workflow (use template)
▫ Follow same process
▫ Easy to learn for a user
Suggest
• This can be a roleplay
▫ Others try to make new ideas, but one is acting
outsider, suggesting options

• Typical case is there are solutions or ideas

available, but people can’t see

• Especially if machine or system supported easy

to use pre-defined rules and workflow
▫ Group learning is one option (collection)
▫ Additionally big data or other