Structured
Decision-making
Outlines the benefits of a consistent and repeatable decision-making process and the techniques for implementing one
Section 1
Decision-making
In This Section
1. What Is Group Decision-making?
2. The Problem of Team Decisions
3. What Is Structured Decision-making?
4. How Does Structure Help?
5. Is Adding Structure Efficient?
6. Elements of Structure
What Is Group Decision-making?
Group decision-making is a process where a number of people work together to choose among competing alternatives.
Decision-making is a large topic. There are many styles of participation, techniques of analysis, and processes for resolving and implementing. This chapter will cover some of the more common issues and approaches teams face.
The Problem of Team Decisions
Team decision-making is complex, expensive and prone to failure. Let's break that down.
Complexity
There are a number of ways team decision-making is complicated by organizational factors. They include:
• Often decisions are only resolved after escalating through layers of decision-making, each with its own style, rules and set of facts considered
• Teams have constraints due to geographic, time, language or other differences between the participants
• Teams may not be able to include management in decision- making, creating a greater risk of management's full commit- ment to the resolution being delayed, considered under different facts or withdrawn. The result may be that members have also have weak commitment.
As well as these organizational challenges, teams have them same difficulties any group has in making decisions. Those diffi- culties include:
• Managing stages of activity, including fact finding, collecting alternatives, etc.
• Picking techniques of analysis
• Determining members' involvement
• Implicitly or explicitly picking rules for how decision-making progresses
• Prioritizing decisions
Expensive
Decision-making is always an expensive process. Even when the resolution is low-risk, the process requires time and atten- tion from team members.
Members' time can be valued in dollars. It is difficult to assign a cost to attention paid to decision-making but you can assume it is high because there are only a limited number of things a per- son can give attention to in a day.
As a simple example, say a team has 10 members. The team averages five decisions per week involving all members. Each decision averages one hour, including all analysis, every email, time in face-to-face discussion, etc. That is 10 hours per deci- sion. And let's set the internal average all-in cost of a team member hour at $55.
Given those parameters, every 12 months the team spends $137,500 making decisions. That expenditure is on the process itself, not the value of the resolutions.
One way of looking at it, in this example, is that the team may be dedicating the cost of its highest paid member solely to decision-making.
Failure-prone
Decision-making fails in many ways. Failures may prevent a resolution, or the implementation may fail, or the failure be an impact to the decision-making process more than to an individual decision.
Some examples of failure include:
• Errors in problem identification
• Missed or specious options
• Errors in analysis
• Poor participation of team members
• Low commitment to the resolution
• The process results in team-impairing conflict
• Errors in implementation or no implementation
• Triggering scope creep or scope reduction
Returning to the 10 person example team just outlined, let's now add the cost of failures. Say 20% of decisions do not reach implementation, require re-deciding or lengthening the time re- quired for a related decision. Set the value of those process fail- ures to the cost of the decision so that the process cost doubles.
Now the team spends $165,000 per year on process. That is be- fore considering the cost of the ultimate success or failure of the decisions.
One way to look at this result is that the team may have dedi- cated the cost of its two lowest paid members solely to the decision-making process.
What Is Structured Decision-making?
Structured decision-making is a general term for decision- making processes that:
• Follow consistent and repeatable patterns of analysis
• Have transparent group deliberations in order to reach a better decisions with greater commitment
• Is structured with the intent of successful implementations
Structured decision-making is often implemented using technical analysis methods from decision science. However, it also de- scribes practices that are closer to negotiation and policy re- view. The specific approach to structured decision-making is de- pendent on the situation and subject matter.
We will look at how structured decision-making can help teams making many low risk to moderately risky decisions in a typical business context.
Teams making high risk decisions will typically have more specific needs.
How Does Structure Help?
A well-structured process attempts to maximize qualities that lead to stronger decisions. Those qualities include:
• Repeatable steps
• Consistency in consideration
• Transparency of analysis
• Fuller participation
• Having a clear goal-oriented context
• Well demarcated ownership and participation
The benefits of these qualities are that the ways decisions fail we listed before are minimized, and that decisions are made more quickly.
Structure delivers benefits first and foremost by lessening foot- dragging, conflict and bias. It achieves that by clearly signaling that the process is fair, practical and appropriate.
The signals structure sends include:
• That participants opinions and facts will be fully considered without bias due to who they came from
• That the process for identifying alternatives and supporting facts is predictable and consistent for all inputs
• That the style of decision-making, for example by consensus or by decision owner, is clear up front
• That time is allocated consistently among decisions regard- less of outcomes
• That the basis for a decision, its criteria, will be specified clearly
Is Adding Structure Efficient?
In part, that depends on the types of decision and cohesion of the group. However, in most cases the answer is a clear yes.
The caveat is that a team must carefully and explicitly select those elements of structure that are most practical for them.
Teams must balance:
• More up-front work, and
• Less opportunity to take shortcuts against the longer term efficiency of:
• More robust decisions
• Higher value outcomes, and
• Less distraction and divisiveness
Elements of Structure
This chapter will look at some of the major elements of a struc- tured process in a section on each. The elements covered are:
• Grouping
• Roles
• Criteria
• Ranking
• Cause and effect
• Implementation
Section 2
Grouping
Decisions
In This Section
1. Why Is Grouping Important?
2. Common Ways Of Grouping
Why Is Grouping Important?
Grouping decisions is important for expectations setting. Specifically, grouping:
• Makes it easier to understand and prioritize the variety of decisions teams typically face
• Clearly signals how types of decisions will be made and which decisions are of which type
In addition, as with other types of work, grouping makes tracking and reporting easier.
Common Ways Of Grouping
There is a large number of practical grouping axes. For the pur- poses of expectations setting and consistency, some of the
main ones are:
• By individual responsible for the process
• By individual tasked with the final resolution
• By decision-making style; consensus, majority, leader- decides, etc.
• By cause and effect
• By techniques to be used; e.g. voting, criteria analysis, etc.
• By deadline or subject
Many aspects of decision-making process are themselves decisions. Teams need to address these issues early in their lives.
Grouping is one of these process decisions. For a consistent and efficient process teams need to clearly say how decisions will be grouped. Otherwise, determining the type of a decision may itself become a deliberative process.
Section 3
Decision Roles
In This Section
1. Why Are Decision Roles Important?
2. What Roles?
3. Team Roles Vs. Decision Roles
4. Extending the Model
Why Are Decision Roles Important? Decision roles indicate the relationship of individual team members to the process steps for a given decision.
What Roles?
There are five main sources of roles in a decision-making process. They are:
• The person asking for a decision
• The person who is responsible for a decision being made
• If the decision is one within a group, the person who is responsible for all of the grouped decisions
• If the decision's cause is identified, those roles that are aligned with that work
• For a complex decision, the assignees to activities or tasks within the decision-making process
The first three roles are straightforward. The fourth and fifth sources of roles are more nuanced.
Team Roles Vs. Decision Roles
The forth bullet speaks to team roles. When a decision is identified, it always has a cause. The work items that cause the deci- sion are typically assigned to a role or to individuals who have roles. Those roles are key stakeholders in that decision, as well being the participants.
For example, in deciding which ERP system a company should use, one of the roles involved in the decision may be the Ac- countant Subject Matter Expert role. Picking an ERP system is typically a high risk, long duration decision. Our Accounting Subject Matter Expert's main concern may be advising on the configuration of the ERP system that is chosen. But their input to the system selection may be critical. Being clear about their role in the selection will make sure their opinion carries sufficient weight.
The fifth bullet above describes decision roles. A high risk, long duration decision-making process often requires a division of labor. Roles help to manage divvying up the work, including the work of finding information and settling on a resolution.
Decision-specific roles may not be closely related to team roles outside a given decision.
For example, in the ERP choice decision just described, decision roles are likely to be needed. On such role might be a