Decision Leadership SDG- Stanford University

Decision LeadershipGuiding Teams to High-Quality Decisions in

Challenging Organizational and Analytical Contexts

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© 2007 Strategic Decisions Group www.sdg.com

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Meet Today’s Speakers

Carl SpetzlerCEO, SDG

Program Director, SDRM Certificate Program

Lecturer in Economics, Stanford GraduateSchool of Business

Jennifer MeyerSenior Engagement Manager, Executive

Education Practice, SDG

Paul MarcaDeputy Director,

Stanford Center for ProfessionalDevelopment

Bruce JuddDir. of ExecutiveEducation, SDG

Adjunct Professor, Kellogg GraduateSchool of Mgmt.

Hannah WinterPartner, SDG

Associate Program Director, Stanford

Strategic Decision and Risk Management (SDRM) Certificate

Program

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When the stakes are high and organizational

alignment is difficult, you need decision leadership.

In general these situations are challenging organizationally, and they are analytically complex, uncertain, and dynamic.

High stakes

• A bad decision will have lasting negative consequences

• There is time to make a high-quality decision

Multiple parties

• Stakeholders

• Information providers

• Individuals who will ensure the decision “sticks”

Examples

• New business strategy

• New products or services

• Response to competition

• Management of a portfolio

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These challenging situations call for decision

leadership to ensure a timely and high-quality result.

Decision Task Leadership

Decision Leader

The decision leader plans and in many cases leads the tasks preceding the decision; in some cases the roles are combined.

Decision

Maker(s)

Gathering Information

Facilitating Meetings

Analyzing & Synthesizing

Planning and Managing

Communicating Results

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Poll 1

What role do you play most frequently in your organization's decision making?

• I am the decision maker or a member of a standing decision-making body.

• I solve problems and advocate my ideas to decision makers.

• I lead teams to support decision makers.

• I participate on teams that support decision makers.

Live Meeting Poll

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Effective decision leaders are committed to achieving

decision quality.

Decision leaders provide five essentials. They:

They start with the end in mind, and assure that it is achieved.

Decision Leader

1. See the destination – a high-quality decision

2. Diagnose a decision situation

3. Design an effective and efficient decision process

4. Lead the decision process

5. Assess the level of quality achieved

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Achieving quality in each of six elements produces

quality in the overall decision.

Elements ofDecisionQuality

Like a chain, overall quality is no stronger than the weakest link.This is the goal of the decision-making process.

Meaningful, Reliable

Information

ClearValues andTrade-offs

Logically Correct

Reasoning

Commitmentto Action

AppropriateFrame

Creative,Doable

Alternatives

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A “spider” diagram helps gauge decision quality.

DecisionQuality

AppropriateFrame

Creative,Doable

Alternatives


Information

Clear Values andTrade-offs

LogicallyCorrect

Reasoning

CommitmentTo Action

0% 100%

The 100% point is where additional effort costs more than it is worth.

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Effective decision leaders diagnose the situation in

order to determine the best decision process.







Decision Leader

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The decision leader asks the crucial questions: the

“What,” the “When,” and the “Who.”

• What is the decision?

– What is our purpose in deciding?

– Has a decision been “declared”?

– How important is the decision?

– What is the nature of the decision?

– What makes this decision difficult?

• By when does this decision need to be made?

• Who should be involved?

– Who decides?

– Who knows (who has the content that we need)?

– Who leads the decision process?

– Who should be involved to assure success in implementation?

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A diagnosis of the situation results in an initial frame.

Decision

Quality

AppropriateFrame

Creative,Doable

Alternatives


Information

Clear Values andTrade-offs

LogicallyCorrect

Reasoning

Commitment

To Action

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What makes diagnosis difficult? Each decision has its

own nature.

Content: Trustworthy inputs and insight

• Data overload or lack of data

• Constantly evolving value chains and business models

• Many alternatives or none

• Biases

• Access to expertise

Content Analytical

Org

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tio

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Analytical: The logic to get the right answer

• High uncertainty

• Complex dynamics and business cycles

• Many interdependent drivers

• Multiple, interrelated value measures

• Variability in risk attitudes

Organizational: Alignment and commitment to a direction

• Fundamentally different frames and beliefs

• Group dynamics

• Values, desires, and motivations

• Habits and personalities

• Organizational structure

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Who should be involved?

Input and ExecutionResources

ProjectTeam

Responsibility for Decision Quality

Decision Maker(s)

Provide facts and judgments necessary to understand the consequences of the decision and readiness for successful execution.

Gathers content information, facilitates dialogue, analyzes alternatives, and integrates results to achieve clarity of direction and commitment to action by the decision maker(s) and the implementers.

Assures that the decision recommendation meets DQ criteria.

Has authority to approve action.

Typically the decision leader directs the project team and shares DQ responsibility with decision makers.

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Effective decision leaders select an approach and

create the project plan: the “how” of achieving DQ.







Decision Leader

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Poll 2

How does your organization make most of its important decisions now?

• We use decision leaders to guide dialogue among decision makers and team members to a high quality decision.

• Our most important decisions are based on recommendations by strong advocates.

• Our decision-making processes are ad hoc.

• I don't know how we make our most important decisions.

Live Meeting Poll


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In complex decisions, we define separate roles for

decision makers and a project team.

Decision Board

Decision Board

Members: Decision-makers

Responsibilities: “Declare” decision, approve frame, provide values and trade-offs, and make decision

Selection criterion: A decision by this group will “stick”

Project Team

Project Team

Members: Analysts and subject-matter experts

Responsibilities: Develop frame and alternatives, assess information, evaluate alternatives, plan implementation

Selection criterion: Recognized by decision board as credible experts and analysts

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Systematic Dialogue among the Right

Participants

Create

AlternativesEvaluate

Assess

& Frame

Staged Process Driven with Deliverables

Decide

Creation of a Clear Choice

The tried-and-true SDG decision process is a good

place to start the process design.

Project Team

Decision Board

Declare &

Diagnose

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The approach, tools, deliverables, and schedule differ

greatly from one situation to another.

ContentAnalytic

al

Org

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Consumer ProductMarket Entry

Assess & Frame Evaluate DecideAlter-natives

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ContentAnalytic

al

Org

an

iza

tio

na

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Assess & Frame Evaluate DecideAlter-natives

Semiconductor

CapacityEvaluate

Alter-natives

Evaluate DecideAlter-natives

Assess& Frame

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ContentAnalytic

al

Org

an

iza

tio

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Alter-natives

Evaluate DecideAssess & FrameAlter-natives

Alter-natives

Evaluate Decide

Mobile

ProviderStrategy

Alter-natives

Evaluate DecideAssess& Frame

Semiconductor

CapacityEvaluate

Alter-natives


Assess& Frame

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DQ

I

V

R

C

F

A

However, all approaches, deliverables, and schedules

must drive to commitment to action that achieves DQ.

ContentAnalytic

al

Org

an

iza

tio

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l


Alter-natives

Evaluate DecideAssess & Frame

Alter-natives

Evaluate Decide

Mobile

ProviderStrategy

Alter-natives

Evaluate DecideAssess& Frame

Semiconductor

CapacityEvaluate

Alter-natives


Assess& Frame

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The decision and task leaders select from myriad

tools to achieve decision quality.

Content Intensive

• Brainstorming

• Market studies

• War gaming

• Experts

• Customer interviews

• Focus groups

• Pilots and prototypes

• Trial clinics

• Controlled launches

• Competitor review

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Content Intensive

• Brainstorming

• Market studies

• War gaming

• Experts


• Focus groups


• Trial clinics



Organization Intensive

• Surveys

• Team building

• Competency assessments

• Learning systems

• Experts

• Personality assessments

• Organizational design

• Personal coaching

• Needs mapping

• Incentives and rewards



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Content Intensive

• Brainstorming

• Market studies

• War gaming

• Experts


• Focus groups


• Trial clinics




• Surveys

• Team building



• Experts




• Needs mapping


Analysis Intensive

• Multiattribute scoring

• Scenarios

• Value/uncertainty maps

• Spreadsheet modeling

• Sensitivity analysis

• Probabilistic analysis

• Nonlinear optimization

• Risk profiling

• Options and gaming

• Dynamic systems

• Portfolio analysis



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The key is selecting appropriate tools for the nature

of the decision situation.

Content Intensive

• Brainstorming

• Market studies

• War gaming

• Experts


• Focus groups


• Trial clinics




• Surveys

• Team building



• Experts




• Needs mapping


Analysis Intensive

• Multiattribute scoring

• Scenarios






• Risk profiling


• Dynamic systems


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Example: A business portfolio problem…

Content Intensive

• Brainstorming

• Market studies

• War gaming

• Experts


• Focus groups


• Trial clinics




• Surveys

• Team building



• Experts




• Needs mapping


Analysis Intensive

• Multi-attribute scoring

• Scenarios






• Risk profiling


• Dynamic systems


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Effective decision leaders orchestrate and lead the

activities necessary to achieve DQ.







Decision Leader

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Decision Task Leadership

Decision

Maker(s)

Decision leadership applies up, down and across the

organization.

Decision Leader

There are often different decision leaders for different decisions across the organization.

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The decision leader often has overall project

leadership responsibilities.

For the decision maker(s), the leader:

• Knows the larger organizational context

• Keeps a finger on the pulse of the decision makers, maintaining open communication

• Monitors changes in the decision situation, and knows when to change course

• Synthesizes insights from the team’s work clearly and with incisiveness

Decision BoardProject Team

For the project team, the leader:

• Is recognized and respected by the project team members as the director of the effort

• Designs and oversees the team’s activities to build decision quality

• Monitors progress in the decision effort and knows when to change course

• Ensures quality of the team’s work products

• Manages resources and schedule

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Pacesetting: “This is challenging and exciting work. Here’s a clear set of tasks that will get us there.”

Commanding: “We have a crisis. Here’s what needs to happen.”

Visionary: “We have an important problem here.”

Democratic: “We need engagement of many different perspectives in this process.”

Declaring and diagnosing the decision

Assessing and framing the decision; Understanding values

Visionary: “We can reach alignment for this decision.”

Affiliative: “Our goals can support each other.”

Generating alternatives; Assessing information

Visionary: “We can think differently about this.”

Coaching: “Each team member and expert can help us move toward higher decision quality.”

Evaluating alternatives to understand value and risk

Reaching decisions;Building consensus

Democratic: “We all need to be aligned.”

Visionary: “With this decided, here’s what’s possible…”

Decision Stage Potential Leadership Styles*

Skillful leaders employ different leadership styles,

depending on the situation.

* Styles defined by Goleman, Boyatzis, and McKee in Primal Leadership: Learning to Lead with Emotional Intelligence (2002)

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The decision leader will often design, open, manage, and close each meeting.

An essential skill for decision leaders is facilitating

dialogue in decision meetings and workshops.

Decision Board

Decision Dialogues

Objective Leading dialogue that yields commitment to a high-quality decision

Project Team

Project Team Meetings

Objectives Designing and developing work products to build decision quality and foster alignment

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Declaring and diagnosing the decision

• One-on-one discussions and draft reviews• Kickoff presentation by decision makers• Team development or refinement of vision statement

Assessing and framing the decision; Understanding values

• Small group info review and summary of challenges• Issue raising with diverse perspectives in the group

Generating alternatives; Assessing information

• Individual idea generation and group brainstorming• Creative expansion, e.g., role plays, challenge reviews• Individual interviews using debiasing techniques

Evaluating alternatives to understand value and risk

• Interactive development of model structure• Poster session of evaluation results• Small group synthesis of key evaluation insights• Large group review and prioritization of refinements

Reaching decisions;Building consensus

• One-on-one preview of results and recommendations• Insight-focused dialogue and recording of agreements

Decision Stage Potential Meeting Designs

The decision leader designs the meeting to fit the

tasks and participants.

A good design will accommodate different personality types (e.g., introverts, extroverts, big thinkers, analytical types, etc.)

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• Expert in leading a decision-making process

• Guides the group through specific decision-related tasks

• Ensures quality of the work product from each meeting

– Manages meeting tasks to maximize quality contribution

– Challenges the team in the meeting if quality is lacking

– Tasks the team to improve quality as needed after the meeting

• Encourages and manages balanced and healthy discussion

• Keeps the group on task and on schedule; seeks group agreement on changes in task or schedule

• Adapts meeting process when it isn’t working

• Manages group interactions, but provides no technical content or judgment of quality

The decision leader manages meetings with neutral

facilitation and facilitative leadership.

Neutral Facilitation Facilitative Leadership

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So, in summary, decision leaders efficiently drive

organizations to high-quality decisions.

DQ

I

V

R

C

F

ADecision Leader






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Poll 4

How much would your organization benefit from improved decision leadership?

• Little Benefit - We already have a group of effective decision leaders.

• Some - Meetings and workshops would be more efficient and productive.

• Significant - Decisions would be transparent and higher quality.

• Monumental - This could be transformative for our organization.

Live Meeting Poll


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Stanford University and SDG have created education

programs focused on improving decision-making.

• Directed by Professor Ron Howard, Management Science and Engineering

• Developed in partnership between SCPD and Strategic Decisions Group

• Available online, on campus, and on-site

• Meets the career-long education needs of professionals, managers, and executives

Stanford Center for Professional Development (SCPD)

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Our program comprises education for strategic

decision-making at two levels.

• Certificate program in Strategic Decision and Risk Management

– For leaders and senior managers who want toimprove decision-making by their teams

– For those who support strategicdecision-making

– On-campus sessions in March, June,and September

– What past participants have said:

- "Stanford opened my mind to a

new way of thinking that made a

significant impact on me personally.”

–Xander Uyleman

- Watch an exclusive interview with Xander:

http://scpd.stanford.edu/scpd/about/ourStudents/xUyleman.htmhttp://scpd.stanford.edu/scpd/about/ourStudents/xUyleman.htm

• Two-day senior executive seminar

– For senior executives with significant decision responsibility

– November 13–14, 2008

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The certificate program offers 2.5-day courses

spanning the breadth of decision staff skills.

DADecision

Analysis

DQDecision

Quality

AdvancedDecisionAnalysis

Modelingfor Strategic

Insight

SDRMPracticum

StrategicInnovation

BehavioralChallenges in

Decision-Making

EnterpriseRisk

ManagementStrategic Portfolio

Decisions

DecisionLeadership

Strategic Decision and Risk Management (SDRM) Program Core course

New course

Elective

Advanced

Project

Management

Program

Converting

Strategy into

Action

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2008 On-Campus Calendar

2019181716

FridayThursdayWednesdayTuesdayMonday

June

Pricing

• $2,495 per course

• $2,245 per course – early registration (register by 5/11/07 for June)

• $2,195 per course – multiple courses

• $1,975 per course – multiple courses and early registration

Prices increase January 8, 2008

Advanced Decision Analysis

CORE ELECTIVE

2827262524

2120191817


March

Decision Quality in Organizations

Decision Leadership

Converting Strategy Into Action

Decision Analysis

Behavioral Challenges in Decision-Making

1918171615

12111098


September

Decision Analysis

Modeling for Strategic InsightStrategic Decision and Risk

Management Practicum

Decision Quality In Organizations

Strategic Innovation


Strategic Portfolio Decisions

Enterprise Risk Management


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To contact one of today’s speakers:

Q & AThank you for participating in today’s eBriefing, the winner of the iPod Shuffle is…

To learn more about the SDRM program:[email protected]

1-866-234-3380

Carl [email protected]

+1.650.475.4405

Jennifer [email protected]+1.650.475.4374

Paul [email protected]

+1.650.723.4008

Bruce [email protected]+1.650.475.4470

Hannah [email protected]+1.650.475.4455

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Upcoming On-Campus Courses

March 17 - 28, 2008

Stanford Strategic Decision

and Risk Management

Certificate Program

Register at: http://proed.stanford.edu/redir.asp?J1

To visit the SDRM home page: http://proed.stanford.edu/redir.asp?J3

For more information, please contact:Patty Harris, Customer Relationship ManagerToll Free +1 866 234 3380Outside the US +1 650 475 [email protected]://strategicdecisions.stanford.edu

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Decision Leadership SDG- Stanford University

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