Elaborated 'IDEA' Decision Methodology

Issues
Constructive and collective brainstorming is an ideal way to focus the minds of the decision-making participants, to benefit from their creativity and experience and - importantly - to provide them with the opportunity to take ownership of the decision by means of active and meaningful participation. This phase relates not only to the identification of decision options, which sometimes become quite clear early (e.g. do we invest or not) but to the clear definition of the criteria by which the successful option will ultimately be selected. For the core issue about which most disputes revolve are these criteria and the perceived value they hold for their proponents (see the Evaluation phase later).

The general context in which the decision is being made and that in which its implementation is likely to occur are of paramount importance. The way in which the first is likely to evolve into the second is a difficult trajectory to predict and yet holds the key to successful decision-making. Issues here involve the nature of current priorities, policies, politics, sensitivities, customs, culture, conventions, assumptions among numerous other characteristics of the general environment - and how these might alter during the period of interest. This is sometimes called an 'Environmental Scan'.

Decision Construction
Some decisions involve a simple set of criteria while others are characterised by greater complexity. Complexity involves not the number of criteria (size and simplicity are different entities) - it is how they are structured. Some criteria may require further breakdown into sub-criteria. For example, we have list 'profitability' as a criterion, but it might be important to distinguish between 'short term' and 'long term' profitability which can be considered as distinct attributes. It may also become important as to whether the profit is to derive from local or off-shore sources.

In this sense, the 'profitability' criterion becomes the 'parent' for two 'child' sub-criteria (term and location) and these need to be absorbed into our thinking. In turn, these sub-criteria could themselves warrant further decomposition. For example, it might be important to distinguish between European and US off-shore sources. Decisions which are important require this level of analysis.

We are therefore bound to understand the structure of the decision which takes on a clearly hierarchical or tree-like form. A diagrammatic representation of this is shown below.

Evaluation
By their very nature, the determination of values is a subjective exercise. However, the aim is to 'objectify' the evaluation, that is, to have it performed as objectively as possible. This can be achieved by canvassing values in a manner that provides some common standard against which they are measured. The are several ways in which this can be done. These include questionnaires, pair-wise comparisons and ordinary rating on some accepted scale (percentages say) within the context of a focus group discussion. In the end, it is important that these criteria are rated rather than ranked.

A rating provides for some score whose relative values show the degree of separation that exists between criteria preferences within the mind of the decision-maker. In contrast, a ranking simply orders one's preferences - a far weaker method of evaluation and one that does not serve decision making purposes adequately.

It will also be necessary to evaluate the relative merit of decision options, i.e. those alternative strategies of actions among which a selection will be made. These judgements are made against the lowest level criteria in the hierarchy and are made in exactly the same way as were the criteria. This uniformity represents a real strength of the method. Once the relative preferences between criteria have been evaluated, and the various options prioritised against parent criteria, we are in a position to determine the preferences of these options against the decision itself - our ultimate aim. This involves some simple calculations which are best described as a series of weighed averages. These are done at each level of the hierarchy, starting from the base and working upwards. They can be performed by hand, by means of a calculator, a spreadsheet or a specially designed software application which provides database capability enabling the details of the entire decision and the process used in reaching it can be documented (see 'Safekeeping' below). Weighted averages simply transfer what is known (option preferences against the lowest set of criteria in the hiearachy) to what is desired (option preferences for the highest set, i.e. the decision itself). To see an example of a real calculation, click here

Action
Project objectives must be kept aligned with the original decision objectives. A project definition or charter document must originate with the decision team to maintain continuity and alignment.

Documentation
When the calculations have been done, the entire decision, including options, criteria, their stated and calculated preferences, notes of explanation, documentation relating to scope, risk, constraints and context must be saved and maintained for future reference. This is vital for two reasons:

1. The decision team must have the capability to revisit these details when they are considering a future decision so that the benefit of experience can be exploited fully.

2. The process by which the decision was reached should be available for later scrutinty in a clear and concise format. A database applicaton such as Numerix' "Decision Management System" is ideal for such purposes.