Effective Decision Making: Principles by Dr. Vora

 

Dr. Manu K. Vora, Ph.D., MBA, ASQ CQE & ASQ Fellow Adjunct Faculty, School of Continuing Studies, Northwestern University, Illinois provided the following slides from his November presentation at our section meeting.

Past Vice President, American Society for Quality (ASQ)
Chairman and President, Business Excellence, Inc.
P. O. Box 5585, Naperville, IL 60567-5585, USA
Tel: +1-630-548-5531, manuvora@b-einc.com; Website: http://www.b-einc.com

Presented at the ASQ Northeastern Illinois Section Meeting, Mundelein, IL, 11/21/2013

My Background

• 38 years of decision making experience managing customers, people, processes, and leadership areas using Baldrige and ISO models

• For-Profit Organizations (1976-present): • AT&T Bell Laboratories, Naperville, IL

• Cahaba Government Benefit Administrators, LLC, Birmingham, AL • Infogix, Inc. (UNITECH Systems, Inc.), Naperville, IL
• Institute of Gas Technology, Chicago, IL
• Lucent Technologies, Lisle, IL

• Omzest Group, Muscat, Sultanate of Oman
• Pinnacle Business Solutions, Inc., North Little Rock, AR • TriSpan Health Services, Inc., Jackson, MS

• Not-for-Profit Organizations (1988-present):
• American Society for Quality (ASQ), Milwaukee, WI

• Alumni Association, Illinois Institute of Technology, Chicago, IL
• Blind Foundation for India, Naperville, IL
• College of Business, Northern Illinois University, DeKalb, IL
• Indian Institute of Technology (IIT BHU) Global Alumni Association, NJ • Information Integrity Coalition, Naperville, IL

• National Management Institute, Cairo, Egypt
• School of Continuing Studies, Northwestern University, Evanston, IL

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Outline

 Quotes on Decision Making
 Professional Decision Making  Personal Decision Making
 Decision Making Exercise

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Quotes on Decision Making

•“If I had to sum up in a word what makes a good manager, I’d say ‘decisiveness.’ You can use the fanciest computers to gather the numbers, but in the end you have to set a timetable and act.” – Lee Iacocca

•“It is the moment of decision that your destiny is shaped”. – Anthony Robbins

•Greatness is not a function of circumstance. Greatness, it turns out, is largely a matter of conscious choice, and discipline. – Jim Collins

•Most discussions of decision making assume that only senior executives make decisions or that only senior executives’ decisions matter. This is a dangerous mistake. – Peter Drucker

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Professional Decision Making

Opportunities for Decisions:

• Hiring
• On-boarding (orientation – when & how)
• Initial training, ongoing training
• Initial assignment, ongoing assignments
• Performance feedback
• Coaching
• Mentoring
• Professional growth
• Promotions
• Terminations
• Capital projects
• Strategic planning
• Team formations
• Managing Suppliers
• Time management
• How to manage change – Improvement areas • To Do List

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Personal Decision Making

Opportunities for Decisions:

• Schooling (you, spouse, children)
• Jobs (you, spouse)
• Financial (where, when, and how to invest) • Shopping (Durable and non-durable goods) • Housing
• Automobile
• Appliances
• Clothing
• Church/Synagogue/Temples
• Sports to play/watch
• Vacations
• Hobbies
• Personal improvements
• Books to read
•Time management
• To Do List

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Decision Making Exercise

• Form groups (5 min discuss, 1 min/group readout – 10 min total)

Groups to discuss:
What % of you are Good Decision Makers?  What is your secret? – capture top 3 items

• Readout through Spokespersons from each group

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Decision Making Tool: Tree Diagram

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Decision Making Tool: Tree Diagram

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Videos
Group Decision Making

http://www.youtube.com/watch?v=rIfoIkJzlxU (3:34 min) Group Decision Making That Works

http://www.youtube.com/watch?v=0-AyHxtUAjk&NR=1 (4:08 min) What’s the Big Idea about Decision Making?

http://www.youtube.com/watch?v=-_DtS12S3MY (3:58 min)

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E

ffective Decision Making: Practices

Manu K. Vora, Ph.D., MBA, ASQ CQE & ASQ Fellow Adjunct Faculty, School of Continuing Studies, Northwestern University, Illinois

Past Vice President, American Society for Quality (ASQ)
Chairman and President, Business Excellence, Inc.
P. O. Box 5585, Naperville, IL 60567-5585, USA
Tel: +1-630-548-5531, manuvora@b-einc.com; Website: http://www.b-einc.com

Presented at the ASQ Fox Valley Section Meeting, Warrenville, IL, 11/05/2013

Outline

 Leadership and Decision Making Baldrige Model

 Decision Making Models  Group Exercise

 Decision Making In action Best Practices

 References

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Baldrige Criteria for Performance Excellence Framework: A Systems Perspective (2013-2014)

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Organizational Assessment

 Baldrige Award Organization Assessment (40 Q)  Category 1: Leadership (6Q)

  •   Category 2: Strategic Planning (5Q)
  •   Category 3: Customer and Market Focus (5Q)
  •   Category 4: Measurement, Analysis & Knowledge Management (5Q)
  •   Category 5: Workforce Focus (6Q)
  •   Category 6: Process Management (4Q)
  •   Category 7: Results (9Q)

    Ref: http://www.nist.gov/baldrige/publications/progress_leaders.cfm

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Leadership Competencies

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Decision Making Models

  • Decision making is a skill that is learned and it improves with practice.
  • One helpful method for learning to make better decisions is to examine basic decision-making models that outline the process of arriving at a conclusion.

    Scientific – Knowledge based (detective approach) Ethical – Doing the right thing (moral approach) Economical – Net gain (Cost-benefit approach) Political – Palatable to people (subjective approach) Experience – Past knowledge (familiarity approach) Habitual – Default based (passive approach)

    Source: “A Decisive Model”, Tim Laurent, Training & Conditioning, 12.7, October 2002.

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Decision Making Models Exercise

Group Exercise (5 min thinking, 5 min readout):

  • Review one of your recent Good decision/Group (50%)
  • Review one of your recent Bad decision/Group (50%)

    Reflect:

  • Which decision-making model you used?
  • Was it the best approach?

    Readout:

  • One volunteer for Good decisions – 1 per group
  • One volunteer for Bad decisions – 1 per group

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Nine Steps to Decision Making

  • When we have many options and pending decisions, life can oftentimes feel overwhelming. A decision is as easy, or as complicated, as we choose to be.
  • We need to take control, and decide to be decisive. When you are clear and sharp on your decision, other will not second guess you; instead they’ll back you up.
  • To develop the ability to be decisive is simply a mindset; a mental attitude that comes with practice and persistence.
  • Nine Steps to be decisive:
     Believe (you are decisive)
     Visualize (as quick and firm decision maker)
     “No Bad Decisions” (action beats inaction)
     Be Brave (don’t be afraid to make mistakes)
     Faith (listen to your instinct)
     Take a Step Back (expand possibilities)
     Set Time Limit (decide under tight deadlines)
     Persistent Practice (make fast decisions, often)
     Think Out Loud (clearly define question, write down options, and assumptions)

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Conquering a Culture of Indecision

  • The single greatest cause of corporate underperformance is the failure to execute (only 30% of strategic plans get implemented).
  • Such failures usually result from misfires in personal interactions.
  • More often than not, they’re typical of the way large and small decisions are made (or not made) throughout an organization.
  • The inability to take decisive action is rooted in a company’s culture
  • Leaders create this culture of indecisiveness, Dr. Ram Charan says—and they can break it by doing three things:
    • Must engender intellectual honesty in the connections between people.
    • Must see to it that the organization’s social operating mechanisms— the meetings, reviews, and other situations through which people in the corporation transact. business—have honest dialogue at their cores.
    • Must ensure that feedback and follow- through are used to reward high achievers, coach those who are struggling, and discourage those whose behaviors are blocking the organization’s progress.

      Source: On Making Smart Decisions, Pages 51-74, Harvard Business School Publishing, 2011.

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Who Makes the Decisions?

  • Every success, every mishap, every opportunity seized or missed stems from a decision someone made—or failed to make. Yet in many firms, decisions routinely stall inside the organization— hurting the entire company’s performance.
  • The culprit? Ambiguity over who’s accountable for which decisions.
  • How to clarify decision accountability?
  • Assign clear roles for the decisions that most affect your firm’s performance—such as which markets to enter, where to allocate capital, and how to drive product innovation. Think “RAPID”:

     R – Who should recommend a course of action on a key decision?
     A – Who must agree to a recommendation before it can move forward?
     P – Who will perform the actions needed to implement the decision?
     I – Whose input is needed to determine the proposal’s feasibility?
     D – Who decides—brings the decision to closure and commits the organization to

    implement it?

    When you clarify decision roles, you make the right choices—swiftly and effectively.

Source: On Making Smart Decisions, Pages 135-160, Harvard Business School Publishing, 2011.

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A Decision Diagnostic

CONSIDER THE LAST THREE MEANINGFUL decisions you’ve been involved in and ask

yourself the following questions (Reflect on this when you are back at your office): 1. Were the decisions right?
2. Were they made with appropriate speed?
3. Were they executed well?

4. Were the right people involved, in the right way?

5. Was it clear for each decision:
• whowouldrecommendasolution?
• whowouldprovideinput?
• who had the final say?
• whowouldberesponsibleforfollowingthrough?

6. Were the decision roles, process, and time frame respected?
7. Were the decisions based on appropriate facts?
8. To the extent that there were divergent facts or opinions, was it clear who had the D? 9. Were the decision makers at the appropriate level in the company?

10. Did the organization’s measures and incentives encourage the people involved to make the right decisions?

Source: On Making Smart Decisions, Page 158, Harvard Business School Publishing, 2011.

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Why Good Leaders Make Bad Decisions?

  • Leaders make decisions largely through unconscious processes that neuroscientists call pattern recognition and emotional tagging. These processes usually make for quick, effective decisions, but they can be distorted by self- interest, emotional attachments, or misleading memories.
  • Managers need to find systematic ways to recognize the sources of bias—what the authors call “red-flag conditions”—and then design safeguards that introduce more analysis, greater debate, or stronger governance.
  • Red-Flag Conditions:
     Presence of Inappropriate Self-Interest  Presence of Distorting Attachments

     Presence of Misleading Memories
    Source: On Making Smart Decisions, Pages 199-216, Harvard Business School Publishing, 2011.22

Stop Making Plans: Start Making Decisions

  • Most executives view traditional strategic planning as worthless. Why? The process contains serious flaws as follows:

     First, it’s conducted annually

     Second, it unfolds unit by unit (no synergy)

  • Frustrated by these constraints, executives routinely sidestep their company’s formal strategic planning process—making ad-hoc decisions based on scanty analysis and meager debate. Result? Decisions made incorrectly, too slowly, or not at all.

    Source: On Making Smart Decisions, Pages 217-242, Harvard Business School Publishing, 2011.

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Stop Making Plans: Start Making Decisions

  • How to improve the quality and quantity of your strategic decisions?
    •   Use continuous issues-focused strategic planning. Throughout the year, identify the issues you must resolve to enhance your company’s performance—particularly those spanning multiple business units.
    •   Debate one issue at a time until you’ve reached a decision. And add issues to your agenda as business realities change.
  • Your Reward? More rigorous debate and more significant strategic decisions each year— made precisely when they’re needed.

    Source: On Making Smart Decisions, Pages 217-242, Harvard Business School Publishing, 2011.

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Stop Making Plans: Start Making Decisions

Here are the average numbers of major strategic decisions reached per year in companies that take the following approaches to strategic planning:

 Annual review focused on business units – 2.5 decisions per year

 Annual review focused on issues – 3.5 decisions per year

 Continuous review focused on business units – 4.1 decisions per year

 Continuous review focused on issues – 6.1 decisions per year Source: Marakon Associates and the Economist Intelligence Unit

Source: On Making Smart Decisions, Pages 223, Harvard Business School Publishing, 2011.

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Time Management Matrix – Stephen Covey

Urgent Not Urgent

Important

Not Important

Q1 Crises Q2 Deadlines

Q3 Interruptions Q4 Some Meetings

Popular Activities

Prevention Relationship Building Planning
Recreation

Pleasant Activities Busy Work
Time Wasters Trivia

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Prioritizing – Decision Making

Do Delegate Delay Dump

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Summary

I. AMA:
 Ability determines what you are capable of doing  Motivation determines how you do it
 Attitude determines how well you do it

II. 3Hs:
 Heart – Emotions
 Head – Ideas and Logic  Hands – Implementation

III. Leadership (a Catalyst of Change):
Leadership is all about Influencing, Igniting, and Inspiring ordinary people to do extraordinary things.

IV. Leadership Ability: To translate vision into action and
actions into the next level of vision for decisive decision making.

V. Decisiveness comes with the Decision that you are Decisive. Decide Today!

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Video (Watch at Your Office)

Making Great Decisions

http://www.youtube.com/watch?v=uA0ZGe-OLK4 (59:20 min) (Google Tech Talks – David Henderson & Charles Hooper)

Watch at least first 20 min.

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References

“HBR’s 10 Must Reads on Making Smart Decisions”, (2011), Harvard Business Publishing, Boston, MA.

Useem et al., (2011), “How to Lead during a Crisis: Lessons from the Rescue of the Chilean Miners”, MIT SMR, Fall 2011.

Kotter J. P. (1996), Leading Change, Harvard Business School Press, Boston, MA. Lencioni, P. (2007), The Three Signs of a Miserable Job, Jossey-Bass, San Francisco, CA. Lencioni, P. (2006), Silos, politics and Turf Wars, Jossey-Bass, San Francisco, CA. Lencioni, P. (2004), Death by Meeting, Jossey-Bass, San Francisco, CA.
Lencioni, P. (2002), The Five Dysfunctions of a Team, Jossey-Bass, San Francisco, CA. Lencioni, P. (2000), The Four Obsessions of an Extraordinary Executive, Jossey-Bass, San

Francisco, CA.

Morgan, N. (2006), Running Meetings, Harvard Business School Press, Boston, MA.

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Thanks Questions?

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