1 PROBLEM SOLVING AND DECISION- MAKING

2 Running a Stoplight: $75 fine. 10% federal income tax rate. 8% Idaho income tax rate. Employee share of FICA at 7.65% Need $94 pretax earnings to pay a $75 fine. If you figure one minute of your time is worth $94, that extrapolates to $5,640 an hour. At a median wage of $14.43 in Idaho, you would have to work 6.5 hrs. to pay this fine. Additionally, you might receive an increase in your automobile insurance premium or have your drivers license revoked.

3 Focus Point #1: Small decisions become big decisions through frequency. Don’t get into the mindset that it is a small, inconsequential decision. Repeated enough times, the probabilities will catch up with you, and a small decision will become the biggest decision of your life.

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5 Focus Point #2: Decisions involve consequences. Ask yourself what are the consequences to your decision? Understanding the consequences helps us put decisions into perspective. Spend more time arriving at the right decision and less time correcting wrong decisions.

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7 Focus Point #3: Think preventive, not reactionary! Reactionary decisions often involve: A great deal of time. A great deal of time. Large sums of money. Large sums of money. Heartache. Heartache. This is known as “Management by catastrophe” It becomes similar to a dog chasing its tail!

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9 Systematic or Six Step Process to Decision- making: (4) An organized evaluation of a decision situation considering and reviewing the critical information needed to make good decisions.

10 Step #1, Identify the problem. Separate the problem from the symptoms: What is the consequence of doing nothing? What is the consequence of doing nothing? What is not the problem? What is not the problem? What do we want to preserve, achieve, or avoid? What do we want to preserve, achieve, or avoid? Is something wrong that needs corrected? Is something wrong that needs corrected? Is something threatening that needs prevented? Is something threatening that needs prevented? Is something inviting that needs accepted? Is something inviting that needs accepted? Is something missing that needs provided? Is something missing that needs provided?

11 Step #2, Determine alternative courses of action: Using practical, feasible, cost effective research.

12 Step #3, Analyze all pertinent alternatives: Establish comparative standards. Designate priorities – what needs to be absolutely satisfied. Apply the Law of Diminishing Returns.

13 Step #4, Select the best alternative: Strike a balance between feelings & logic. Know your values. Assess your goals, resources, strengths, and weaknesses. It is normally your resources and strengths that get you through a bad decision. It is normally your resources and strengths that get you through a bad decision. It is normally your weaknesses that lead to a bad decision. It is normally your weaknesses that lead to a bad decision. Troubleshoot your decision; anticipate problems and their impact.

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15 Step #5, Implement the decision! Quickly and efficiently. On January 27, 1986, the right decision was made but was not implemented. What was that decision?

16 Step #6, Follow up the decision: Measure your success. Use the results as feedback.

17 Why do systematic approaches fail? Because enlightened ??????? humans tend to fail (not follow) the system!

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19 John D. Arnold: Owner of a business called “Executrak.” Has written nine narrative (not math analytical) books on decision-making. Books are published by the American Management Association (Amacom Press) Arnold’s books are commonly found in the psychology section. 1972, “Make Up Your Mind” (1) 1978, “The Art of Decision Making” 1995, “The Complete Problem Solver”

20 John D. Arnold’s Philosophies: ??????????????????????????????????????????????????????????????????????

21 Matrix Process: Create a list of desirable objectives. Edit the list. Prioritize the list. Move the prioritized list to the matrix. The top desirable objective must get a value of 100. Every criteria must receive a value lower than the one above it and higher than the one below it. List all alternatives horizontally across the matrix. The top alternative that meets the desirable objective must get a value of 100.

22 Matrix Process Continued: Multiply the column value times the objective value for a column score. Select the next best alternative until all the alternatives have been ranked against the criteria. Total the matrix.

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24 In Conclusion: “If you always sit where you always sat, you will always see what you always saw, and you will always get what you always got.” Laura Lipton