5.1.7 Summary of key points

The goal of this module on decision-making is to help decision-makers choose and document the best alternative in a clear and logical way. The decision-making methods described in this module are promptly applicable to a wide range of decisions, from simple ones, as picking a restaurant for a special meal, to those that are made complex by interdepartmental or intercompany interfaces. Expert facilitation can help assure that all the steps are properly performed and documented. Feedback from the decision-maker(s) is vital to the process.
The key to developing an adequate problem statement is to ask enough questions about the problem to ensure that the final report will clearly answer the questions of reviewers and stakeholders. Requirements spell out what the solution to the problem must do. Goals are useful in identifying superior alternatives. The decision team evaluates the requirements and goals and suggests alternatives that will meet the requirements and satisfy as many goals as possible. The best alternative will be the one that most nearly achieves the goals. Criteria must be developed to discriminate among alternatives in a meaningful way. The decision-maker’s approval is crucial before the criteria are used to evaluate the alternatives. Alternatives can be evaluated with quantitative methods, qualitative methods, or any combination.
The evaluation methods introduced here are adaptable to many situations, as determined by the complexity of the problem, needs of the customer, experience of the decision team /analysts/ facilitators, and the time and resources available. The decision-making method selection needs to be based on the complexity of the problem and the experience of the team. A final solution should fulfil the desired state, meet requirements, and best achieve the goals within the values of the decision makers.
Once the preferred alternative has been validated, the decisionmaker can present it as a suggestion to the company management. A final written report must offer a description of the decision process, assumptions, methods, and conclusions recommending the final solution.
As the task of this introductory text (based mainly on literature1) does not allow us to deal in detail with some more sophisticated, yet very useful tools and methods, we provide references to additional resources, where the interested reader can find further descriprion of methods together with examples of their applications. At the very end of this unit we would like to underline the importance of risk management2, sensitivity analysis3 and scenario planning4.

In this module, we tried to explain the basics of structured decision-making. We hope you understand that even the most sophisticated mathematical methods are influenced by approach to risk, ability to reliably estímate the behaviour of markets, competitors and other factors, but always depend also on experience. Especially in the field of innovation, there is a high level of risk. Unfotunatelly, you can not completely avoid failures if you try something new. However, you should learn from your successes and failures, as well as from successes and failures of your colleagues, competitors, etc.
For more detailed information on decision-making, please take a look at the Bibliography and Web sites sections at the end of this issue. If necessary, ask experienced colleagues and friends for help, or invite external consultants .

1Baker D. et al., Guidebook to Decision-Making Methods McClave J.T.,
  Benson P.G.: Statistics for Business and Economics
2Wikipedia articles on Risk management, Risk assessment, Risk matrix;
  DoE Risk Management Guide – see Further reading
3Wikipedia article on Sensitivity analysis – see Further reading
4 Wikipedia article on Scenario planning – see Further reading