The Art of Decision Making – Part 1: The process

So what are decisions anyway?

Decisions take ambiguous information and make an outcome. Some see decisions as a set of finite cognitive steps, and some see it as part of a circle of deciding and learning. Both are true, and overall they share common ideas but with different level of detail. After all, the steps are just a framework that represents something that can happen in an instant.

My favourite is the 6 step model:

1. Define the problem

The simple example of defining the problem is when we are presented with two or more alternatives. For example, “Do we follow option X or option Y?” Or perhaps you have received a specific question like “Should we commit resources to this?” But this is rare and clinical – the real world is much more nuanced.

2. Identify alternatives

You’ve got your problem identified, and you immediately think of alternatives A, B and C. Are they enough alternatives? How can we identify more?

3. Evaluate alternatives

It is time to evaluate our listed alternatives. You probably have a gut feel already, but how can we do this more rigorously?

4. Decide

So we now have some well evaluated alternatives, and finally it is crunch time. Someone has to make a decision.

5. Implement

We have made our decision. Now what?  Surely everyone will just crack on with it. Or maybe not…

6. Follow-up and evaluate the results

Learn from the outcome, but keep an eye on it too.  Is it time to course correct?

The above 6 step model is pretty simple, and only an overview.  We will spend the next few sections on each of these. We’ll break it down, explore some tools, think about some of the people issues (dare we call it politics?), and try to propose some way forward when it is not so clear which way to go next..  Please feel free to comment below to add to the discussion

Read the introduction  or go forward to read part 2 on defining the problem

Steve is a Product Development Manager at Telstra Wholesale.  The views expressed in this post are his only and do not necessarily reflect the views of Telstra.

2 thoughts on “The Art of Decision Making – Part 1: The process

  1. It is a good summary, but only a tip of the iceberg.

    Good or bad, but we (humans) are not so rational in this process. I suggest to all who involved in decision making to explore ‘soft’ part of the process and get basic understanding how human brain works in decision making.
    There are number of cognitive biases that can significantly affect the decision process and lead to sub-optimal outcome. To name few:
    – Overconfidence;
    – Framing;
    – Anchoring;
    – Confirmatory bias;
    – Stereotypes

    It is also good to understand when you can and you can’t rely to your gut feeling.

    For those who interested to get better understanding of these topics, I suggest to check books “Brain Rules” (by John Medina) and “Predictably Irrational” by Dan Ariely. Dan Airiely also has a website and often post to LinkedIn

  2. Absolutely.

    This post in only the introduction – so is only the tip of the iceberg. The rest of the series breaks it down in more detail, including the cognitive biases you mention above. During the talk I touched on Ariely’s behavioural economics – but not in any detail.

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