Category Management Toolkit Decision Making
Decision Making Summary 2
What is Decision Making? Decision making is the application of a choice, or choices, among available options. This can be as simple as the decision of whether to act, or as complex as selecting a sequence among possibilities. People make decisions constantly based upon experience and information available. Good decision making is an essential skill for organisation and personal career success. The key is to make timely and well considered decisions and avoid making poor decisions which may risk failure and reduce confidence in leadership. When groups are trying to reach consensus and make a decision, it is important to make information available which will facilitate the decision and to give the group time to logically evaluate the option(s) presented. The following suite of tools / techniques will equip the facilitator in enabling groups to make decisions. Decision making enables participants to: Identify a preferred alternative or option through considered consensus Make a valued judgement based upon information available Prioritise solutions based upon logical and transparent evaluation.
Where does it fit in with Category Management? Options Evaluation and Selection
What is included in this guide? Forced Choice Importance weighting Point scoring evaluation Weighted voting
Which processes does the tool apply to? Strategic Sourcing, Demand Management, Supplier Relationship Management
Which other tools link to this guide? Options Evaluation Matrix Analysis Risk Analysis Data Analysis
Decision Making 3
Forced Choice The forced choice technique is a team decision making process in which previously identified options are compared against team-established criteria. Criteria may include implementation time, cost of change, feasibility, effectiveness, and so on. Options are systematically compared with all other options, and a tally mark is assigned to the option considered best. Total marks for each option determine ranking. Step-by-step procedure 1. The facilitator displays a list of previously recorded options for solutions or improvements. 2. Next, the facilitator asks participants if any of the options shown need clarification. Collating the results 3. The criteria or standard for evaluation of options against each other is discussed and • If two options receive the finalised. same number of evaluation 4. The team starts to compare each option marks (see this example, against all other options in descending options number 2-3), then order, for example, option 1 and option 2 as rank this tie as 2.5 for rank compared to stated criteria. Best option positions 2-3. receives a tally mark. This continues with options 1 and 3 etc. • Lowest rank is considered 5. When all options have been compared with the best option 1, then option 2 is compared with all subsequent options and the best options receive a mark. This process continues until all comparisons have been made. 6. The number of marks are totalled and the highest total is assigned rank 1. Rank 1 is the best option for managing change effectively, as shown in this example.
Example: How to manage change effectively - Date: xx Mar 06 Criteria: Length of time to complete, risk of failure and cost of programme
Evaluation
Rank
Option 1: Assign change champions from middle management who will implement change across divisions.
IIII
1
Option 2: Buy-in support from external consultancy to facilitate change.
II
2.5
Option 3: Identify project team to manage change programme internally and train accordingly.
II
2.5
Option 4: Do nothing. Divisional managers are responsible for implementing change across divisions.
I
4
Note: Option 1 (rank 1) would be the least risky and most cost effective option to achieve results.
4
Importance weighting An importance weighting matrix is useful in a decision-making process where a particular option must be chosen on the basis of importance to the problem-solving or improvementopportunity effort. A relative weight (percentage) is assigned to each characteristic as a multiplier to a product rating. The product with the highest weighted total is chosen as rank (1) importance. Step-by-step procedure 1. The facilitator lists all products or services to be considered in the decision-making process. 2. Next the technique or importance weighting is reviewed with the participants and key product or service-related characteristics identified. See example Videotape purchase decision. 3. Participants reach consensus on the distribution of importance weight factor for all characteristics. Note: Sum of weight factors must equal 1 (100%). 4. The participants rate all services or options using a scale of 1 to 5, 5 being most supportive. 5. Each service or option rating is multiplied by the weight factor and recorded as shown. This process continues until all products have been “weight” calculated as shown in the example. 6. Finally the calculated products are summed and ranked. Rank (1) is the selection made. 7. The matrix is dated and given to the Process lead.
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Example: Videotape Purchase Decision
Productivity
Resources
Teaming
Quality
0.25
0.10
0.15
0.10
0.20
0.20
4
3
4
4
4
5
1.00
.30
.60
.40
.80
1.00
2
5
3
2
4
2
.50
.50
.45
.20
.80
.40
5
5
2
1
4
1
1.25
.50
.30
.10
.80
.20
3
1
5
4
3
1
.75
.10
.75
.40
.60
.20
1
3
5
4
2
2
Customer Satisfaction
Communications
Key Support Area
Videotape choices
Managing Change
Managing Stress
Managing Conflict
Managing time
Managing projects
.25 Note: Rating Scale: 1-5, 5 is high
.30
.75
.40
.40
Weight Factor
4.10
1
2.85
3
3.15
2
2.80
4
2.50
5
.40
Weighted totals Weighted rankings
Point-Scoring Evaluation A point-scoring evaluation rates the importance, value, or preference of listed solutions, factors, or issues by the assignment of points to every alternative, not to exceed a teamset maximum of 100 or 1000 points of all listed alternatives. This rating system effectively supports a team’s consensus decision-making effort. Step-by-step procedure 1. The facilitator reviews the process of point-scoring with the team.
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2. A point-scoring matrix is drawn on a flip chart or whiteboard. All factors are discussed and recorded in the matrix. See example Company Total Quality Management (TQM) and Employee Involvement Events. 3. Next, the team decides on the maximum number of points to be distributed: 100 or 1000 points. In this example 100 points were distributed. 4. The facilitator now guides the participants through the evaluation of each listed alternative and arrives at a team rating of points to be assigned to reach the preferred alternative. 5. The point-scoring matrix is filled and all columns are added to show the highest total. This is the preferred alternative. In this example, 95 points reflect the team’s choice. 6. The matrix is checked for accuracy and dated.
Example: Company TQM and Employee Involvement Events Date: xx Mar 06
Learning Organisation Conference
Maximum points
Company TQM symposium
Company sharing rally
IPD Day lessons learned
Type of Event
Quality Improvement
15
20
20
20
25
Shared Learning
20
10
15
20
20
Training support
15
10
15
15
15
Teaming communications
15
15
15
15
15
Supports organisational objectives
20
10
20
25
25
TOTALS
85
65
85
95
100
Value to the Company
Weighted Voting The weighted voting technique quantifies a preference for a particular choice. Each team participant receives a number of votes for distribution across several choices in accordance with the participant’s personal choice. Votes are added for each choice to determine what choice the team is leaning toward.
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Step-by-step procedure 1. The facilitator records all choices to be voted on a flip chart. See Hints ad Tips example, Team Voting to Select a • Assign team members Brainstorming Tool. with approximately 2. A matrix is constructed listing the 50% more votes than participants’ names and choices as choices to be voted. shown in the example. 3. Each participant receives eight votes to be distributed across five choices. 4. The facilitator asks each participant for his or her vote distribution for each choice. 5. Votes are recorded until all votes have been distributed. 6. Lastly, the facilitator totals votes for each choice to display the team preferred choice. The flip chart is dated.
Example: Team Voting to Select a Brainstorming Tool Tools
Team members
Round Robin Brainstorming
Reverse Brainstorming
Crawfort Slip Method
Brainwriting Pool
Brainstorming
Result
John L
1
1
1
2
3
Tony M
2
0
2
0
4
Steven K
2
1
1
2
2
Gina I
3
1
1
2
1
Jim M
2
2
0
2
2
Dana K
3
0
0
2
3
Peter A
1
2
1
2
2
Vote Totals
14
7
6
12
17
Note: 7 team members x 8 votes = 56 votes total
Team voted for “Brainstorming”
CP0018/05/05
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