Wednesday, April 04, 2007

Success Tools - Decision Analysis Part 2

This is my second post on Kepner-Tregoe Decision Analysis. In my last post , I mentioned that alternatives could be ranked by how much they satisfied MUST requirements and WANT requirements. I described how each alternative could be given a quantitative score.

Presumably, the most satisfactory alternative would be the one with the highest composite score. However, the Kepner-Tregoe method doesn’t stop there

Assessing Adverse Consequences

Besides ranking advantages, Kepner aand Tregoe advocate a separate exercise for assessing adverse consequences. They contend that this process cannot be “folded in” to the ranking of best alternatives. They suggest that each alternative’s negative consequences also be comparatively scored, by multiplying the seriousness of the consequence by its probability. This process could easily “tip the scales” in favor of a different alternative than the highest-ranked alternative.

Controlling the Effects of the Final Decision

But the decision-making process does not stop with the choice of an alternative. Since any alternative may have negative consequences, Kepner and Tregoe recommend that, once an alternative has been selected, immediate action should be taken to prevent the worst consequence that has been anticipated, and also that warning and tracking systems be set up to monitor progress. This is a tricky process. It could label the decisionmaker as “paranoid”. There are also very few rewards given out for “potential problems prevented”. It sometimes feels like a no-win situation, and yet I feel that these last two steps, Consequence Assessment, and Monitoring Progress, create an essential margin of safety that speaks volumes for the merits of the Kepner-Tregoe process.

Once again, I strongly recommend “The Rational Manager” although it appears to be out of print.

Decision Analysis Part 1


No comments: