The next step in determining the decision making strategies is to collect examples of decision from each expert. One method of collecting these data would be through observation of experts at work. This, however, would be extremely time consuming. Alternatively, get as many facts as possible about the decision within the limits of time imposed and the ability to process them. But virtually every decision is made in partial ignorance and lack of complete information, which affects the decision making process. As a result the methodology uses a VIS.
The experts at Ford interact with a visual simulation of the system in question. The simulation model stops at a decision point and reports the values of the attribute variables. The expert is then prompted to enter his/her decision to the model. The methodology suggests VIS for a number of reasons. First, it is less time consuming than observation, because the simulation runs much faster than real time. Another benefit is that, simulation run can be repeated exactly, enabling the system state to be interrogated further at a later date, if required.
The key to this step is to not remain stuck on obvious alternatives or what has worked in the past but to be open to new and better alternatives. How many alternatives should be identified? Ideally, all of them. Realistically, the decision maker should consider more than five in most cases, more than three at the barest minimum. This gets away from the trap of seeing “both sides of the situation” and limiting alternatives to two opposing choices; either this or that. A list of all the possible choices should be made, including the choice of doing nothing.
Only identifying available alternatives doesn’t solve the problem but creating alternatives that don’t yet exist, widens the image. As each alternative is evaluated, emphasis should be placed on the likely positive and negative cones for each. It is unusual to find one alternative that would completely resolve the problem and is heads and shoulders better than all others. Differences in the “value” of respective alternatives are typically small, relative and a function of the decision maker’s personal perceptions, biases and predispositions.
As the positive and negative cones are considered, ample care is required to differentiate between what is known for a fact and what is believed might be the case. The decision maker will only have all the facts in trivial cases. People always supplement what facts they have with assumptions and beliefs. This distinction between fact-based evaluation and non-fact -based evaluation is included to assist the decision maker in developing a “confidence score” for each alternative. The decision maker needs to determine not just what results each alternative could yield, but how probable it is that those results will be realized.
The more the evaluation is fact-based, the more confident he/she can be that the expected outcome will occur. While this might seem obvious, it is necessary to make the point that deciding on the best alternative is not the same as doing something. The action itself is the first real, tangible step in changing the situation. It is not enough to think about it or talk about it or even decide to do it. A decision only counts when it is implemented. As Alan Mullaly (CEO of FORD) said, “There are no more prizes for predicting rain. There are only prizes for building arks. ”
Every decision is intended to fix a problem. The final test of any decision is whether or not the problem was fixed. Did it go away? Did it change appreciably? Is it better now, or worse, or the same? What new problems did the solution create? Strategic decisions are the highest level. Here a decision concerns general direction, long term goals, philosophies and values. These decisions are the least structured and most imaginative; they are the most risky and of the most uncertain outcome, partly because they reach so far into the future and partly because they are of such importance.
For example, what methods to use to gain knowledge, whether to produce a low priced product and gain market share or produce a high priced product for a niche market would be a strategic decision. These are every day decisions, used to support tactical decisions. They are often made with little thought and are structured. Their impact is immediate, short term, short range and usually low cost. The consequences of a bad operational decision will be minimal, although a series of bad or sloppy operational decisions can cause harm.
Operational decisions can be preprogrammed, pre-made, or set out clearly in the policy manual. For example, if the tactical decision is to build a new factory, the operational decision would involve where to get the material from. Knowledge sharing is promoted as being a part of everyday work-life. Indeed, knowledge sharing can and is included in our performance reviews. One barrier we often run into, though, is when managers don’t consider Knowledge Management to be a priority. ” (Stan Kwiecien, best practice replication deployment manager for Ford Motor Company)
For an information system to be useful, it must be capable of organizing and presenting the information tailored to the context. The component of the information system concerned with internal information must be designed to elicit and obtain all relevant information that is generated, and to index and store it in an easily accessible form. It must be possible to retrieve information as needed, and present it appropriately. It is desirable to have the same computational tools for handling the internal and external information so that a uniform ‘interface’ is possible.
Implementing an information management policy that is robust and rigorous is essential, not only at the strategic, corporate levels, but operationally as well. In the case of strategic planning, the quality of the information gathered, the channels used to distribute that information laterally and vertically throughout the organization, and the interpretation of the information gathered, is vital. Without a sound foundation, the policy and its procedures, the information that is fed into the strategic planning process will be flawed.
This will, inevitably, be damaging to the chances of the chosen strategies being successful. Identifying Information Needs: This is usually done by discussing information needs with the strategic planning team. This is another crucial early stage in the use of information in the strategic planning process. The leader(s) and other members of the planning team must be clear about their information needs. Whilst at this stage it is not possible to identify all the specific details, it is essential to draw up a list of categories of information that will lead to sufficient information being gathered.
For example, one of the categories will be information on forecast changes in the external environment, another will be information on current and predicted competitor behavior, another may be information on potential manpower resources, and so on. For public sector organizations one of the categories will be predicted government actions, such as in the setting of financial targets or other performance indicators. The role of the planning team is to ensure that their needs are understood and satisfied.