Decision Analysis
A rational approach to personal & professional decision making
Who is Decision Analysis for?
“Making decisions is the most important job of any executive. It’s also the toughest and the riskiest. Bad decisions can damage a business and a career, sometimes irreparably. So where do bad decisions come from? In many cases, they can be traced back to the way the decisions were made—the alternatives were not clearly defined, the right information was not collected, the costs and benefits were not accurately weighed. But sometimes the fault lies not in the decision making process but rather in the mind of the decision maker. The way the human brain works can sabotage our decisions“
The Hidden Traps in Decision Making: John S Hammond, Ralph S. Keeney & Howard Riaffa Harvard Business Review Jan 2006
We could add that all of the above also applies to the major personal decisions we make over our lifetime: our choice in studies, our choices regarding career opportunities, major purchases, vacation destinations, maybe even our choice in partners (even it is very rare that we have to choose between several potential alternative partners at the same time… :-) )
If you are not yet convinced by unhappy personal experience that the sort of intuitive decision making that we mostly rely on is deeply flawed, you would be well advised to read Daniel Kahneman’s ground breaking book “Thinking Fast & Slow” as the work that is summarized in this book largely explains the phrase:
“But sometimes the fault lies not in the decision making process but rather in the mind of the decision maker. The way the human brain works can sabotage our decisions“
in the above quote.
Since all of us are called to make major decisions during the course of our lives, both personal and professional, and since we are hugely vulnerable to what Daniel Kahneman refers to as “System 1” thinking and the cognitive biases that characterise it, our Decision Analysis methodology will be very useful to pretty well anyone who has to make important decisions, whether professional or personal.
What will you learn?
After an introduction to some of the key issues in decision making : System 1 & System 2 thinking, Heuristics and Cognitive biases, you will learn how to go through all of the steps of a broadly applicable, highly practical Decision Analysis Process
The process proposed includes the following steps:
Course Content
One interactive online training module:
One “homework” exercise + corrected solution
Based on a far more complex case study than the one used in the interactive Decision Analysis module (choosing between different candidates for a key job position), this exercise is a further opportunity to gain practical experience going through all the steps of the process proposed.
Excel based Decision Analysis templates: Standard Decision Analysis & Clustered Decision Analysis
Two ready to use Excel templates that will greatly facilitate the execution of your own Risk Analyses, starting with the "Homework exercise " provided
Additional Reading:
HBR's 10 Must Reads on Making Smart Decisions: a collection of 10 articles from the Harvard Business Review, starting with the one cited above, covering a large range of the most frequently encountered decision making pitfalls.
CoThink Academy
Decision Analysis Theory & Practise Module
Decision Analysis Worksheet
Case Study: Purchase of a family car
Solution DA: Purchase of a family car
Decision Analysis: Hints & Tips
Clustered Decision Analysis Worksheet
Read before starting
Case study: Choosing the interim head of the technical department
Decision Analysis solution: Choosing the interim head of the technical department
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