- What is Decision Quality?
- Why should I care about decision quality? I make good decisions?
- Who should participate in a decision quality project?
- Why use a decision process?
- What is the Decision Quality process?
- How do you know a decision is “good”?
- What’s the difference between Decision Quality and Six Sigma?
- When do you use “Decision Quality”?
- What is a “decision compression session?”
- What are the results I can expect using decision quality?
What is Decision Quality?
Decision Quality is a framework, process, tool set, and set of principles for making high quality decisions. In other words, decision quality is both something we do, and something we want.
Decision Quality’s roots are in the discipline of decision analysis developed at the Stanford School of Engineering and at the Harvard Business School. Because of the academic orientation and historic focus on quantitative analysis, the big users have typically been leading companies in pharmaceuticals, oil and gas, utilities, chemicals, automotive, telecom, various governmental agencies, and to a lesser extent financial services.
Typically these organizations have used decision analysis to make resource allocation decisions, capital decisions, portfolio decisions—really any type of decision that could be mathematically modeled and tied back to some sort of quantifiable set of values.
Our firm, DQI, LLC was founded for the purpose of making decision quality—our version of decision analysis—available to a much broader group of users. Our focus is helping organizations apply proven decision models, methods, and tools to the types of decisions typically and daily faced by line and staff leaders, managers, and individual contributors. Where appropriate, we use the heavy analytics of mainstream decision analysis. More characteristically, we help our clients apply a no less rigorous but much less mathematical approach to identifying decision situations, managing decision processes, and ultimately making and choices implementing.
Why should I care about decision quality? I make good decisions.
Paul C. Nutt, Professor of Management Sciences at Ohio State, a leading authority on decision making says that “half of all decisions in business fail.” Juxtapose this to the fact that most people in business think they make good decisions.
This polarity showed up in research done with DQI clients. Client executives and managers, almost to a person, think that while they make good decisions, the company doesn’t, which is fascinating if you think about it. So if everyone makes good decisions, one is left to wonder, who is making all the bad decisions?
Who should participate in a decision quality project?
The target audience for Decision Quality is the executives and managers who are responsible for, both making and causing to be made, high quality decisions. If you are looking to develop and implement a distributed decision making process that is understood by all parties, is simple to use, provides clarity of roles, makes efficient use of resources and maximizes the probability of decisions that lead to successful outcomes, then Decision Quality is highly appropriate.
Why use a decision process?
Why use a decision process? It is our nature to do what we know how to do. Without a process, we are likely to drag decisions into our comfort zone and handle them the way we have in the past. Instead of making decisions, we’re really just doing a more elaborate version of “stimulus/response.” Although this sometimes works, it is problematic when you assume a leadership role and begin taking on more open ended assignments and decisions.
What is the Decision Quality process?
The process is also called the “decision dialog process.” It is based on a philosophy of making the decision process visible to owners and workers. It focuses the conversation among the decision makers, the stakeholders, and the people working the decision. It builds quality and commitment step by step through a series of meetings - each with a specific purpose and set of deliverables. The meetings can take place over a period of time, or over the course of a single decision making session.
There are two sets of actors in a decision dialog. The first is the decision
owner. This could be a single individual or a large group, which typically
includes decision owners, stakeholders with a vote, and selected others that
enable the group to collectively make the decision and build a foundation
for implementation success. We’ll discuss all these roles later in this
chapter.
The second actor is the person or people doing the actual work on the decision. As a group, decision teams typically include a project leader and cross functional team of people that collectively can bring quality to the decision. Decision workers typically are charged with doing work in the alternatives, information, and evaluation phases.
The Decision Dialog Process coordinates the conversations among all participants with the goal of a shared understanding of the best course of action.
Here are the basic principles of decision dialog. manifesto
How do you know a decision is “good”?
The obvious answer is by the quality of the outcomes. Did you get the result you were looking for?
The problem with that is that very often, the results of a decision don’t show up for a long time. In that case, the only way to judge the quality of a decision is by examining the quality of the work done to arrive at the recommendation; and then look at the quality of the execution. That’s where Decision Quality comes in.
If you work the decision using the Decision Quality framework, process, and tools, and you commit the right resources to implementing the decision, you can say with confidence that you made a high quality decision.
It’s still possible that something unforeseen could cause the outcome to differ from what you planned (good decision/bad outcome). That could happen anyway. Using the Decision Quality framework and approach tends to minimize the chance of bad outcomes, and provides a clear trail of quality thinking that you can analyze in the event that you get an unexpected result.
What’s the difference between Decision Quality and Six Sigma?
Six Sigma is a structured, disciplined problem solving approach for improving business processes. The goal of six sigma is to reduce the “defects” in the process to less than six sigma—i.e. virtually zero. Six sigma was designed to improve the efficiency of repeated processes where the ideal is to reduce all variation and everything is essentially done according to the process manual. Stated another way, six sigma is about management and running efficiently on the roads that have already been chosen.
Decision Quality is a structured, disciplined problem solving approach for making decisions. The goal of Decision Quality is clarity of action. Decision Quality was designed to improve the organizational dialogue around unique decisions where following what is written in a manual does not capture the richness of the situation. Stated another way, Decision Quality is about leadership and choosing your road.
Some examples may help. Six Sigma would be great for streamlining the customer on-boarding process. Decision Quality would be great for determining which customers you want to target. Six Sigma would be great for improving the problem resolution process. Decision Quality would be great for determining whether the problem resolution process needs an overhaul, additional resources, or whether the focus should instead be on preventing customer problems in the first place.
Both Six Sigma and Decision Quality are “tool neutral.” They prescribe an overall framework, process, and set of quality standards. Any way you choose to achieve these goals is just fine.
When do you use “Decision Quality”?
The Decision Quality process is scalable. It can be applied to small decisions that take just a few minutes or large decisions that require many meetings over an extended period of time.
The logical application for decision quality is any decision that has some degree of organizational or technical complexity. Here are some examples of when to use Decision Quality.
If the decision you’re being asked to make seems poorly thought through: the problem isn’t clear, the alternatives seem unattractive, the values inappropriate, and so on.
If there are multiple stakeholders who need visibility, a voice, or a vote.
If there are significant informational needs: lots of information going into the decision, lots of information needs to be gathered, lots of analysis is required before a choice can be made.
If the decision involves multiple groups or lines of business.
If you find yourself in a decision situation and everyone associated with it is confused, arguing about what the real issue is, or you’re not making progress moving the decision forward.
If you’ve never had to make this type of decision before.
Any decision involving a work team.
Any decision that appears to require multiple meetings and sign-offs.
The principles of Decision Quality can be used in any decision situation. Even in small decision situations it is often valuable to ask yourself “is this the right frame?” “Can I turn this problem into an opportunity?” The goal is clarity of action. Simply asking the right question can sometimes achieve clarity.
What is a “decision compression session?”
A decision compression session (or DCS) is a method for shortening or compressing the time it takes to work a decision to a logical conclusion: a) a final decision, or; b) a limited set of well described recommendations.
A decision compression session is typically run as a face-to-face meeting attended by all the people who need to be there so that the objective can be reached. The idea is to “bring the smart people to the problem.” Get the people, the information, and the problem together in a room for an extended period of time, and work the problem until it’s done.
Next steps after a decision compression session are usually a presentation to a decision maker, a study, a pilot, or the creation of a project plan that leads to a rollout and implementation.
What are the results I can expect using Decision Quality?
Over the very short term, we’re finding that the common vocabulary and framework makes talking about and organizing decisions significantly easier. Work teams are better able to raise conflict early in the process where it can be constructively harnessed to generate sharper decision frames. Users find that decision processes work more smoothly and more rapidly. There is a diminishment in misunderstanding and a reduction in rework because of poor decision processes.
Over the medium term, we expect to see more decisions being worked in a quality way.
Over the long term, we expect to see more people making bigger and better decisions, closer to the action, resulting in better use of limited resources, better client outcomes, and better financial performance.
To learn more about our approach to helping you embed high quality decision making through development of leadership and management infrastructure, process, models and tools, training and coaching, contact us.
