Making Surveys, Making Decisions

In this article, Bill Ray, Apian President, discusses the decision-making environment that influenced his development of the DecisionPad software, how his experiences informed that development, and the sort of problems DecisionPad was originally created to address. Read Part I.

Bill Ray

I had only been working a few months with that troubled mid-sized company (previous posting) when it was acquired by a Fortune 100 company.  The acquiring company had a diversified offering but most of its profits came from one highly technical flagship product that was very tricky to produce.  Because of the downside risk of a mistake with that cash cow, the corporate culture was highly cautious and analytical.  To fill a strategic product hole this cautious corporate culture bought a Silicon Valley Wild West company in big trouble.  Fortunately they had deep pockets so the high bleeding rate was affordable though hardly acceptable.

One big decision they had to face was plant closures.  There was too much capacity in the acquired company already plus the buyer was bringing new capacity of its own online.  Plants were spread around the world, each with its own strengths and weaknesses.

Being analyticals our senior management meetings on the closure decision began with a large Lotus spreadsheet of financial analysis such as manufacturing costs, transportation costs, boarder-crossing costs, etc.  Over the year that I watched it the spreadsheet got bigger in a endless series of meetings that always seemed to start over at the beginning.  The spreadsheet was so big that the analyst was a beta user for the new Intel plug-in board products to add RAM to the PCs.

Each meeting would begin with the analyst explaining the spreadsheet, but would soon get off course with questions like “what is your assumption behind that costing”, “what about the quality problems at that plant”, “how about the stability of government policies in that country”, “how do we link development engineering efforts half a world away”, etc.  (Remember this was when a FAX machine was state-of-the-art in business communications.)

In other words the tough critical issues in the decision were soft ones, the assumptions, which were not easily turned into financial numbers that could be directly compared to manufacturing costs.  Even when the long-term result will be measured financially, converting all the a priori issues into finance numbers is difficult at best.  People were able to discuss these issues more clearly in subjective terms.

As soon as the discussion moved away from the spreadsheet we lost the superficially objective numerical framework and moved into the purely unstructured verbal.  We needed a framework that could handle the apples and oranges of the real decision criteria.

DecisionPad was motivated by the need to handle a mix of hard and soft information in a way that is satisfying to a wide range of decision participants.  There are fancier analytical methods that are theoretically better but are not useful in practice because they cannot be coupled to real people.  More on how DecisionPad deals with these issues in future articles.

The net result is clear: a framework like DecisionPad can help people converge as information accumulates in the matrix and notes.  Instead of each meeting backing up over old ground,  then scheduling the next meeting, each meeting builds on the last to move forward.

In this article, Bill Ray, Apian President, discusses the decision-making environment that influenced his development of the DecisionPad software, how his experiences informed that development, and the sort of problems DecisionPad was originally created to address. Read Part II.

Bill Ray

I joined Hewlett-Packard in 1969 just after my MBA.  In those days H-P hired us from school with limited experience, virtually all with engineering degrees, and we were promoted from within.  We went through the same management training classes including Kepner-Tregoe which promoted a particular philosophy of effective decision making.  That made H-P what the business schools call a “strong-culture organization”.  People approached business decisions in much the same way horizontally and vertically within the organization.

In 1985 I became VP engineering at a mid-sized Silicon Valley company that had pioneered and grown rapidly in the computer accessory business.  Like most high-growth firms they hired people from where ever they could be found and spread them out in numerous buildings where ever they could rent space.  All this growth – which industry analysts projected to keep right on going — attracted competitors at about the time a sudden technology shift cut the market growth to near zero.  That left everyone in the business with too much capacity and too many people, with prices falling to manufacturing cost or even dumped below true cost.

When the crisis came we needed smart decisions made quickly and implemented effectively.  The cash bleed rate was impressive.

Unfortunately the fast buildup meant some managers expected to reach decisions bottom-up and others top-down.  Worse yet, within that polarization people disagreed on how to analyze or talk about a decision.

The bottom-up managers would try to collect good information and have meetings to decide, but these meetings got bogged down for lack of a consensus on process.  The top-down managers would become frustrated and make arbitrary decisions that soon fell apart because all the relevant information and tradeoffs had not been properly taken into account.  And of course, because the organization was fragmented geographically, both kinds of managers were often mixed into the same decision as shrinking departments were consolidated.

If a decision did get made, often it was too little too late – one traumatic layoff was not deep or fast enough so it would be followed shortly by another.  And another.

Equally often the decision might fall apart in implementation for two reasons:  (1) it overlooked something important and thus did not work, or (2) it could not be communicated quickly and accurately in detail by the decision makers so it would be misunderstood or even sabotaged.  For example, measured by the overall business needs the wrong people might be laid off.

This would have been a perfect place for DecisionPad to provide structure, but DecisionPad was still two years in the future.  However these experiences set many of its design parameters:  to be accessible to a wide range of people without being trivialized, and to be “open” so it would be an effective communication tool during and after the decision.  I wanted to use the power of the emerging personal computers to package up a proven successful decision process in a way that non-specialists could use effectively.

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A recent BusinessWeek article talked about the Myths that Undermine Decision-Making. It was interesting to see where DecisionPad can be a solution to the myths.

Myth 1:  A single team makes the big decision when “reality is that decisions … are made in many forums, formal and informal”.

A complex decision is always a process not an event at any level in the organization.  Understanding of the issues (criteria in DecisionPad terminology) grows over time as various people contribute their expertise and requirements.  Normally this knowledge accumulates in a hodgepodge of notes, spreadsheets and memos by various authors that are difficult to integrate, leading to more meetings trying to make sense of them all.

By providing a consistent framework DecisionPad can help keep the process moving forward to a conclusion that includes the best of everyone’s contributions with notes as required.

DecisionPad’s sensitivity analysis can steer the discussions away from wasting time in unproductive debates once the participants see some issues cannot affect the outcome.

Myth 2: The executive team is a body of equals when “in reality some people and some functions carry much more weight than others“

When DecisionPad asks for weights on criteria it does so in terms of the decision itself, which puts the weight of inputs from department X in a less threatening light than saying department X has high or low internal status.  The former changes to fit each decision; the latter is politics.

For example, the cluster of criteria of concern to Human Resources in locating a new manufacturing facility plays a smaller role than a different cluster does in revising the whole firm’s management training program.  Everyone can relate to a difference in weights that are consistent with the decision logic for understandable, non-political reasons.

Otherwise it is easy for the decision process to become de-focused over internal issues, instead of staying focused on what will lead to a successful decision implementation.

The DecisionPad is usually set up to group criteria by functional area.  Weighting can be done within each grouping primarily by its experts while general management choses the weights between the functions.

DecisionPad encourages visibility of all the issues that are important to the decision.  Missing these because they get lost or unspoken for the status or personality reasons often lead to surprises that may cause implementation to come unraveled.  Costly in money, time and morale.

Myth 3: Team members should always adopt a CEO perspective

By getting all of the issues out on the table it is possible for people to contribute their expertise to the decision and advocate for their issues vigorously during the process, yet also be aware that there are other legitimate issues to be considered.  Focusing on their own area at this stage is not parochial because it is in context.  Everyone is being heard and recorded.

As the decision converges to a conclusion, there is no reason why the CEO perspective cannot be taken by everyone.  It need not be a myth in the end.  Having a documented decision where everyone was heard helps the people who participated explain to their peers and subordinates why it came out a particular way, building buy-in and reducing the risk of the decision being sabotaged.

Use DecisionPad to fix the process instead of trying to fix the people — quality management 101.

Our President, Bill Ray, used to work at a couple of Very Large and Important Technology Firms (who shall remain nameless when we’re discussing their political downsides).  He recalls his middle management days, full of endless meetings and few steps forward.  It’s so easy to get stuck in “analysis paralysis,” endlessly discussing points that may not matter to the final decision.

DecisionPad lets you tightly focus discussion on only the elements that matter.

DecisionPad Impact Arrows

Each arrow shows an item that affects the final outcome.  A fat arrow means it matters a lot.  A skinny arrow means it matters a little.  No arrow = a way to get people to MOVE ON!  If the item isn’t impacting the final rankings, there’s really no need to keep debating whether the process quality controls are good or excellent.

Learn More about DecisionPad:  http://apian.com/landing/groups.php

Sure, we all make decisions every day – most of them great choices!  But some decisions lend themselves to a bit more structure.  Either we use decision software to organize the decision and crunch a lot of data, or we might need it for documenting what we’ve decided.

For help with organizing, DecisionPad decision support software breaks the decision process down into 5 easy steps.  http://apian.com/landing/decision-process.php  It’s easy to list all your options, decide how to evaluate them, and then input information about each of your choices.  DecisionPad does all the crunching to save you having to do any calculations.  Best of all, DecisionPad eliminates unconscious bias.

I mean, I don’t know about you, but when a sales person makes a really great presentation and keeps me laughing, I can be persuaded by that!  Using DecisionPad lets me focus on the objective information and make sure I’m making my decision based on what’s most important to me.  Check out our 5 easy steps:  http://apian.com/landing/decision-process.php.