There are two major types of decisions that you will face. We will call the first ‘tactical' – the type that relies heavily on logic and analysis. These simple, straight forward decisions are based on mechanic and rules, requiring good technical knowledge. Here, ‘good' tactical decisions equals success, as there is a strong relationship between the best decision and the quality of the outcome. An example of this is a game of chess. The best move will lead to checkmate, regardless of the defense.

The second type is what we call a ‘value' decision. Things are a lot less certain here, without the rules and mechanics to guide you. Careful consideration of risk is needed, and this will lead to questioning the level of security we need and, how worthwhile the overall objective is. Our decision-making becomes more of a juggling act, testing what is important as we try to bring about desired outcomes in an unpredictable environment.

Real world decisions are usually a mix of these. Our thinking might initially be tactical, but it wont' be long before questions of value and preference come into the picture. And very often, we have more than one person in the decision making process. This could mean that we end up with a confusing number of values and preferences. One of our challenges would be to boil down these and arrive at a decision which reflects fairly and clearly the diversity of views and concerns held.

What we need then is a way of capturing these evaluations and using the information to arrive at better quality decisions. This provides not only a guide for our decisions, but also a way to track our values as they change.

The two types of decisions will require different approaches. While the first is technically oriented, and only requires consultation with those who have the appropriate expertise, the second is in many ways more challenging. It requires not only consultation, but team work an understanding of corporate values and the ability to round these all together in a way that is accurate and accessible.

Enter AHP

It turns out that the Analytic Hierarchy Process (AHP) delivers just this. It provides a way of bringing out the values of those involved with the decision, and allows them to be applied, in accordance with the relative importance we attach to them.

The method provides a guide, showing us very clearly how the various opinions have shaped the final outcome, which would leave no room for anyone to cry foul.

When AHP is combined with a decision database, we have a fully functional decision-making asset, one which promotes record keeping, and decision justification. This is precisely what is needed in an increasingly litigious corporate culture.

We at Numerix have such an AHP database. It stores broad contextual information such as issues, strategies, solutions, opinions and outcomes for all the decisions made within an organisation, giving you a history-based guide for future decisions. It also keeps track of decision options, criteria and objectives and indicates a recommendation from the provided options.