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1-2 McGraw-Hill/Irwin Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved. Making Decisions and Solving Problems Creatively “Nothing is more difficult, and therefore more precious, than to be able to decide.” ~ Napoleon Bonaparte Chapter 14

14-3 Chapter Objectives Decide between competing options and interest. Make a decision before having all of the necessary information. Make a decision that won’t change. Evaluate potential options. Think creatively about alternatives.

14-4 What is Decision Making? Decision making: –Is a fact of life personally and in business. –Aids managers in identifying and selecting among potential opportunities. Good decision makers are effective at: –Processing information –Assessing risks –Making choices that result in positive outcomes Decision making is a process by which several possibilities are considered and prioritized, resulting in a clear choice of one option over others.

14-5 Why is Decision Making Important? It is crucial for employees at all levels to have the ability to react quickly to customer concerns, business issues, and changing market trends. Today more business decisions are being made in team environments. Technology is literally speeding up the pace of business. The vast amount of information available today makes decision making an essential skill.

14-6 The Decision Making Process

14-7 The Decision Making Process 1. Determine your objective, stating clearly and specifically what you want the end result to be. 2. Establish a course of action before attempting to make the decision. 3. Be creative and brainstorm as many potential alternatives or solutions as possible. 4. In-depth research on all of the options to move forward with your decision. 5. Determine which option would satisfy the needs of your organization. 6. Resolve to act on the option that best meets your overall needs. 7. Develop a plan and monitor the plan to see if it is following the direction you wanted.

14-8 What Kind of Decision Maker are You? If you are usually organized, analytical, and deliberate in making decisions, be somewhat creative and see what your intuition can contribute to your decision. If you are intuitive and tend to approach things in a roundabout way or make decisions hastily based on your past experience, take the time to develop and implement a plan in consultation with others who can keep you on track.

14-9 Collaborative Decision Making Consider you and the person(s) involved as one unit. Be open to new ways of looking at the situation. Sharpen your communication skills. Rely on your intuition. Have a “veto” rule. Collaborative decision making involves identifying both parties’ priorities and determining the option(s) available that meet both sets of needs.

14-10 Collaborative Decision Making (continued) Five principles of collaboration to help with the challenges associated with collaborative decision making: –Involve relevant stakeholders. –Build consensus phase by phase. –Design a process map. –Designate a process facilitator. –Harness the power of group memory.

14-11 Problem Solving Problem solving is a cyclical process composed of four steps: Plan, Do, Check, Act (PDCA) Problem solving is important because: –Organizational problems can significantly hamper an organization’s ability to operate and succeed long term. –Effective problem solving can significantly and positively impact an organization’s bottom line, as well as its long-term viability.

14-12 PDCA Cycle

14-13 Brainstorming Guidelines Articulate the theme or the question. Set a time limit. Record the ideas for everyone to see. Generate as many ideas as possible. Everyone should actively participate. All ideas are good ideas. Piggyback or build on ideas of others.

14-14 Variations on Brainstorming Round robin brainstorming –Group members participate in a structured order, for instance, starting with the person at the head of the table and moving clockwise. Nominal group technique –All team members write down their ideas, then ideas are shared and recorded. Post-It Note brainstorming –Brainstormed ideas are written on Post-It Notes to allow easy manipulation of ideas in problem- solving steps or techniques.

14-15 Affinitizing Steps 1.Arrange written ideas so that each one can be seen. 2.Silently group related ideas by moving notes into categories. 3.Discuss, clarify, and modify groups as necessary once the movement slows. 4.Brainstorm a title that encapsulates or expresses the theme for each group of notes.

14-16 Building Consensus through Multivoting 1.Begin with the brainstorming list. 2.Number each idea or category. 3.Divide the total number of ideas or categories by 3. 4.After members have selected and jotted down their top choices, have a recorder tabulate the results. 5.The idea or category with the highest number of votes wins.

14-17 Creativity Creativity is bringing into existence an idea that is new to you. Creativity and innovation are what ultimately make individuals and businesses successful. Creative problem solving provides a new perspective and increases the likelihood for generation of innovative, cost-effective ways to do business.

14-18 Increasing Creativity in Problem Solving Creative problem solving requires the use of both convergent and divergent thinking. –Convergent thinking is starting with a problem and working to move toward a solution. –Divergent thinking involves generating new ways to view a problem and seeking out novel alternatives to the problem. Four stages of creative problem solving: –Preparation –Incubation –Illumination –Verification

14-19 Methods for Generating Novel Ideas Part Changing Checkerboard Checklist Analogy Method

14-20 Idea Killers We tried it before It would cost too much That’s not my job That’s not how we do things here You may be right, but… That’ll never work You can’t do that here Our customers would never go for that It’s good enough If it ain’t broke, don’t fix it

14-21 Idea Growers How could we improve…? How can (that suggestion) build on (a previous idea)? What have we missed? Who else would be affected? What would happen if…? Who else has a suggestion? I don’t know much about that. How about you? How many ways could we…? May I ask a question?

14-22 Management Response to Ideas Use the P-P-C technique – Positives, Possibilities, and Concerns. Set aside space for an innovation chamber and post rules such as: –The innovation chamber is a criticism-free space. –All ideas are welcomed, discussed, and credited to the individual and the group. –All who enter must participate. –If no really deviant ideas emerge, then the session is less than successful.

14-23 Strategies for Increasing Individual Creativity Do creative exercises. Break some rules. Learn your language (or a new one). Keep an open mind. Keep a journal. Develop confidence in your senses. Expose yourself to new perspectives.

14-24 Summary The process by which you make decisions can significantly impact whether the decision is right for you and those affected by the decision. Complex and consequential decisions require a multistep decision process. Organizations that take a disciplined approach to problem solving are likely to succeed and prosper. Finding solutions to problems or inventing new products and processes requires creative employees and the right environment. Effective management can be greatly enhanced by your ability to make good decisions and solve problems creatively.