A632.1.4.RB_RuggerioSteven

Multistage Decision Making

It’s interesting; outside of large purchases, career changes, and significant relationship mêlées, the bulk of my decision-making was reflexive. Like blinking. Something needed done—give it a moment of though (if that) and then act. This current course, Decision-Making for Leaders has challenged me to mine my motivations. Nearing only the end of the first week and I feel like I’m embarking on a Lewis and Clark expedition into unknown territory. The old axiom is true: Nothing is as simple as it seems.

Hoch & Kunreuther (2001) identified dynamic programming as the process for solving multistage decision problems widely credited to a RAND employee—Richard Bellman—in the 1950s.  They said, “Dynamic programming exploits the idea that even though a decision problem may involve a large number of stages, one need not enumerate and take expectancies of all possible contingent future realizations to arrive at an optimal decision policy” (p. 42). 

My personal decision-making matrix filters all possibilities through what I refer to as the 3Fs: Faith, Family, and the Future. As a man of strong faith, important decisions are decided after a time of prayer and reflection. Once I’ve prayed, time is then allotted discussing possible options, requirements, and results with my wife. Lastly, I review the decision on its future impact on others in light of the legacy I leave behind. Hence my blog title, A Leader’s Legacy.

My decision process varies from Hoch and Kunreuther in its simplicity. While it is a personal model and lacks the depth and detail of the dynamic programming model, it has proved effective and yet has plenty of room for improvement. Implementing the models identified in the textbook Wharton on Decision Making will strengthen my ability to make decisions across a myriad of circumstances. For instance, Hoch & Kunreuther (2001) identify three specific principles that, when taken together, have led to high performance decision making (p. 50-51):

1.     Optimal answers are often obvious

2.     Task environments are forgiving of mistakes

3.     One can learn by trial and error

By being aware of the obvious answers and recognizing mistakes as essential parts of decision-making, I look forward to understanding how a heuristic approach can craft a more defined and structured plan toward all my decisions whether personal or professional.

            In his best-selling book Good to Great, Jim Collins said, “One of the dominant themes from our research is that breakthrough results come about by a series of good decisions, diligently executed and accumulated one on top of another” (p. 69). My goal toward decision-making is consistency. By establishing an effective framework and understanding all aspects and potential results of my decisions, both my and my follower’s abilities will improve.

            Finally, in response to the question, “How would you apply optimal dynamic decision analysis to predict future impact of today's decision?” At this point, it’s too early to tell. Before submitting my professional and personal decisions to dynamic programming or backward induction philosophies, my knowledge of available tools must increase. For the time being, I will continue to apply intuitive knowledge aligned with my 3F principles while exploring the available decision support models currently within reach.

Legacy thinks before it acts...

Steve

References:

Collins, J. (2001). Good to Great. New York, N.Y. HarperCollins Publishers, Inc.

Hoch, S. J., Kunreuther, H.C., & Gunther, R.E. (2001). Wharton on Making Decisions. New York, NY: John Wiley & Sons, Inc.