Deciding the Course of Action The Kepner-Tregoe Approach Paul Morris CIS144

Situation Analysis (Where are we?) Problem Analysis Past What is the fault? Decision Analysis Present How to correct the fault? Potential Problem Analysis Future How to prevent future faults? Learn Cause Make Decision Plan Success

“You think you have problems” Timing How urgent is the problem? Is a deadline involved? What will happen if nothing is done for a while?

“You think you have problems” Trend What is the problem potential for growth?

“You think you have problems” Impact How serious is the problem What are the effects on the people, the product, the organization, and its policies? “Trouble at the Bakery”

“You know it’s a really bad day when…

“You think you have problems” “First Day on the Job…Trial by Fire” problem

Pareto Analysis and Diagram This method shows the relative importance of each individual problem to the other problems in the situation. This analysis draws its name from the Pareto Principle (80% of the trouble comes from 20% of the problems) Vital few concerns vs. the trivial many

Toasty O’s Product Problem A. Inferior printing on boxes (smeared/blurred) 10,000 B. Overfilling boxes (too much weight) 30,000 C. Boxes damaged during shipping 2,000 D. Inner wrapper not sealed (stale) 25,000 E. No prize in box 50,000

Toasty O’s Boxes Analysis

Toasty O’s Product Problem A. Inferior printing on boxes (smeared/blurred) $100 B. Overfilling boxes (too much weight) $6,000 C. Boxes damaged during shipping $7,000 D. Inner wrapper not sealed (stale) $87,500 E. No prize in box $17,500

Boxes vs. Lost Revenue

K.T. Problem Analysis and Troubleshooting The basic premise of KT PA is that there is always something that distinguishes what the problem IS from what it IS NOT. Fear of Flying Problem

Decision Analysis Prepare a decision statement with both an action and a result component Establish strategic requirements (Musts), operational objectives (Wants), and restraints (Limits) Rank objectives and assign relative weights Generate alternatives

Decision Analysis Assign a relative score for each alternative on an objective-by-objective basis Calculate weighted score for each alternative and identify top two or three List adverse consequences for each top alternative and evaluate probability and severity Make a final single choice

Example of Decision Analysis Our company is looking for a new site for construction of a branch office. We have determined our MUSTs and several other factors to consider Two sites have been brought to our attention.

General Factors for Our Example Weight 1 Developable >= 25acres “Must” 2 Favorable physical site attrib. 6 3 Competitive location costs 7 4 Access to quality/trainable workforce 8 5 Quality transportation access 10 Capacity & flexibility of utility services Regional air quality designations

Comparative Analysis Site A Site B Factor Wt. Facts Score Wt. Score Favorable phy. site 6 Great size & config 10 60 Poor config & soil 4 24 Competitive costs 7 Low Land dev. $ 8 56 High Land dev. $ 42 Access to qual. workforce Dense Pop; many compare ind. 9 72 Adeq. Pop; high unemplyment 64 Quality trans. access 30 miles to I-5 with good access 70 Right on Freeway; good access 90 Utility services 5 All systems meet req. 35 40 Air Quality Near non-attainment 32 80 miles to non-attainment Total 325 324