Quantitative Decisionmaking–Get a Better Deal

July 30, 2006

There are only a few people who enjoy the process of evaluating and buying a used car. One of them is the salesperson. The customers rarely have the same satisfaction—there is always this nagging doubt that there is some information missing or obscured that will lead to buying the wrong car at the wrong price. No wonder that internet sales of automobiles are growing rapidly. It is psychologically easier to be outwitted impersonally than by the person negotiating from the other side of the desk.

Buying a car is an example of a quantitative decision process. The steps are information, presentation, evaluation, and decision.

In the example of the car, the decision process requires information available about the condition and price of the vehicle, presentation of the information by the salesperson, evaluation of these facts by the buyer, and finally a clear decision on purchasing the car. There are many other examples of quantitative decisions at both home and on the job. For example, actions based on sales or marketing information, investment decisions, negotiations with contractors, property purchases all require quantitative decisions. Each example has the same steps.

The good news is that you can improve your chances of making a better decision and enjoying a more satisfying result. The four questions below can more effectively guide the decision process.

Four Guiding Questions:

Is ALL of the relevant information available?

The information presentation is fully shaped by someone else. Consequently, there may be either conscious or unconscious bias. It is possible that information has been selectively chosen. There may be good reasons to exclude it, but you, as the evaluator, must assert the opportunity to have access to it.

Does the information presented support the conclusions?

In other words, is there a cause and effect relationship between the information and product? In the case of a used car, an independent mechanics evaluation may be linked to the condition of the automobile. A salesman’s assertion that the car is in good condition may not necessarily be linked to the car’s condition. A mechanics log has a stronger relationship to the condition of the engine than the overall mileage.

When you examine the relationship between the information and the conclusion, it is surprising the amount of information that has no bearing on the decision. Disregard this superfluous information from the decision process.

What do you really need to know?

The best approach is to formulate your own answers to this question even before the meeting. Then, you have an idea of the type of information you consider essential and can compare it with the facts given at the meeting. This exercise gives far more control to the person making the decision. You have a basis to both evaluate the information and ask specific follow-up questions that really help to evaluate and supplement the presented information.

Are you riding the flow of the presentation rather than the content?

The quality of the presentation may be completely different from the quality of the content. However, the style or charisma of the presenter may be intoxicating so that the content evaluation does not happen. (Obviously many politicians and others can make a good living from this skill.) Your responsibility is different.

Find a way to put distance from the presentation itself—either by clearing your mind, leaving the physical space (this is particularly clear in the example of being in the small car sales office), or removing the time pressure element for an immediate decision. This distance separates the style from the content.

That’s it. 4 questions to keep in mind. Try them and see if you can improve your chances of a good outcome the next time a quantitative decision comes along.


The Boat Story

July 27, 2006


The Boat Story

There was a man in a small canoe out in the bay. The man was quite proud of his boat, which he had just refinished. The day began clear and bright, but rather unexpectedly, clouds quickly gathered and a dense fog rolled in. The man brought the canoe about and headed for shore. As he headed home, he could just make out the profile of another boat in the fog obscured distance. He kept that outline of a boat within his view and noticed that it was moving in his direction. This observation caused him some concern and when the boat was within earshot, he called out “Keep your distance so that we have plenty of room to pass.” However, the other boat continued to move closer and was now on a direct collision course. He called out again louder, “Keep your distance!” He was quite skilled with the oar, knew a number of strokes, and could maneuver the canoe quite adroitly. He changed course and paddled away from the other boat. However, as he changed direction, he was upset to see the other boat also change direction and again move directly toward him. The man could also see that it was a significantly larger than his canoe. He called out again “Watch out. Don’t hit my boat, it has been repainted.” None of this shouting had any effect. The larger boat continued to bear down on him. “Stay out of my way!” But it was of no use. Whenever he tried to change direction, the maneuver was matched by the on-coming boat. The boat dead reckoned at him until there was a loud crack from the crash. The man saw his new boat damaged by this senseless behavior of the other boat. His rage knew no bounds. “You idiot, look what you did to my boat!” He continued his rampage, screaming and getting quite worked up. Suddenly, the fog lifted. The man could see the larger boat clearly now. There was no one in it. The boat was a long abandoned shell.


Additional Stories

This is a link to a Collection of Zen Stories     (usefulzenwords.com)

Here are a couple of points to chew on:

Where did the man’s anger come from?

Where did it go?

Where is the responsibility for the accident?


Slacking off without consequences—Practical Risk Management

July 26, 2006

Just don’t do the task. Or more precisely, first consider not doing it. Then decide. Does anybody care? Does anybody even notice? Is there any value to the effort? Is there a time limit that affects others? The difficulties begin when people unilaterally ignore a task simply because it is unpleasant. That type of slacking off may have significant negative consequences, particularly at work. However, a few minutes of consideration may convince you that the benefits of ignoring a task really outweigh the consequences.

An example for today: At work, there are always reports to be written. Some seem to have value, but there are any number that seem to go nowhere. People recognize this and periodically have collaborative meetings to redefine the reports etc. But the reports creep back in, particularly when an insecure, micromanaging supervisor appears who seems to value having all the information available at the expense of delegation and setting direction. When such a supervisor moves on, the reports continue with a life of their own. The elimination of this type of work can be efficiently accomplished by application of the principles of Practical Risk Management.

Risk management is really a systematic way of looking at an operation, its uncertainties, the consequences of these uncertainties, and evaluating actions that can be taken to minimize the negative consequences. There have been elaborate methods worked out to apply these principles to complex systems in order to have them perform reliably. Consider for example, a commercial airplane. Components such as the engines and propulsion systems, fuel delivery, communications, pilot performance, and ground support systems must function as intended and interface with the others. Risk management techniques have been used during the design and testing to increase the reliably of the aircraft to the point where it is safer to take an airplane trip than an automobile.

The important point is that the same principles that have been used to increase the reliability of complex systems can be simplified and applied to allow you to slack off without consequences.

The risk management procedure at its simplest takes only a few minutes of thought and has only four steps:

1. Understand the facts of the task under consideration—these are the people, information, schedules etc. as well as the process to reach the stated outcome.

2.Make up ideas or scenarios of different actions that you could pursue that differ from the normal course. These scenario changes introduce uncertainty into the process and are called “risk events”

3. Logically follow out the likely consequences each idea. Remember that this is a mental exercise based on your perceptions. However, if you are dealing with a familiar situation and you have reasonable judgment, your assessment of the potential consequences will likely be in the ball park.

4. Select the most appropriate course of action. However, the actual consequence may be different from your analysis. These differences are generally not a big deal. Pay attention and monitor the actual results. Change your selected action as appropriate.

Let’s go back to the example of these reports that apparently go nowhere:

1. Fact:

Reports take resources, do not appear to have value.

2. Possible Actions

Ignore writing the report

Reduce the report substantially

Continue the status quo

Change the system

3. Briefly consider the likely consequences for each action

  • Ignore it individually—If no one really cares, there will be no consequences. If someone does care, how will it be brought to your attention? If it is likely to be a friendly reminder, you have paid a small price to learn this. If it is the loss of your job, well it just is not worth it.
  • Reduce it substantially—Gradually reduce the effort and content until someone notices, then make the adjustment permanent.
  • Continue the status quo—Potential consequence is that you will lose the edge on your initiative and skills
  • Change the system—Some people like to do this. Mostly they are bureaucrats. It’s a longer term approach.

4. Take the most appropriate action, monitor and modify if necessary based on the observed result.

So, there can be tasks not done and no consequences. The risk management principles can help you to decide which ones to let go. The evaluation takes only a few minutes to use. This method can be applied to a wide variety of tasks. I’ll pick this up at another time.

Actually, it’s really not slacking off, it’s just using you time and energy where it has better value.

Finding Things–like your flash drive

July 25, 2006

This drill has happened too many times. The family is lined up ready to leave for work and school, when the plaintive cry goes up “I can’t find the keys.” The whole operation shuts down. People scurry all over the place looking for them. The pressure of the delayed leaving builds and even when the keys are found, the residual tension takes a while to wear off. The equivalent situation at work is when the boss asks immediately for information and you can neither put your hand on the hard copy or the file. The worst, of course, is when you put your hand in your pocket to get your flash drive and it isn’t there.

The time for keeping track of things is past. It’s also too early for recrimination. The focus of the moment is to get your hands on the flash drive. Although we say it’s lost, it’s almost always misplaced. A big difference. The trick is to get it back in hand without aggravation.

The worst action is to search a location and overlook the item. If the item is overlooked once, it will be a while until you get back there because there are so many other places to look. Aggravation. This error happens frequently during the initial frantic moments of the search when stuff is just moved around. Even at the beginning, when you look in a location, search thoroughly so the chances of missing it are a minimum.

The next action, if the item does not turn up in the first two or three obvious places, is just to sit down for a minute or two. Take the time to recollect the time and conditions when you saw it. Don’t force for an answer and let the mind be intuitive and open. Something may come to mind such as a slight variation from your normal routine, leading to new ideas. Then get up and look in those places. Repeat as necessary.


Elephants, Blind Men, and the Vision of a Manager–Story

July 24, 2006

The story below, or one of its many variations, is told at many management meetings:

All of the men of the region that were born blind were gathered in one place and an elephant was brought out. Each man felt a different part of the elephant—the head, the feet, the ears, the trunk etc. When they were asked, what sort a thing is an elephant, each had his own response; the tail–a brush; the leg–a pillar, the ear– a winnowing basket and so on. An argument developed within the group and no agreement could be reached.


Additional Stories

This is a link to a Collection of Zen Stories     (usefulzenwords.com)

The management lesson that is often emphasized is that no one individual has a grasp of the entire picture. Each person has a piece that must be brought together to have an accurate understanding of the situation. The point that is stressed is the importance of working as a group and communicating effectively. The lesson is interesting and effective the first time. However, the repetition of message becomes a cliché and the interest is lost.

I recently came across this story again in a Buddhist Commentary. The original story and the commentary took the lesson in a different direction than the management consultants:

This story often appears in the Buddhist canon as a parable told by the Buddha. It was told in response to a question concerning scholars arguing about the nature of man and religion. The story follows the same scenario, and has a verse with these two lines describing the blind men:

For quarreling, each to his view they cling.
Such folks see only one side of a thing.

Two lines from the Commentary indicate a direction:

“If you want to do right, just avoid groping over the elephant: do not say perceptive awareness is it, yet do not say that it is not it.”

The blindness is one of obstructed perception. All of the folks are making the same error, even if their specific reports are different. Bringing all of the people together to fit the elephant together in simply leads to a composite, agreed by consensus, but that picture still contains the errors and distortions inherent in the faulty perception. Although, there may be agreement, it cannot reflect the actual situation if the perceptions are incorrect. Communication and working together are not the central issue. An appropriate, clear experience or understanding of the situation is the essential point.

A manager is often asked to put the pieces of a situation together, based on skill and experience. Managers can become adroit at figuring out the big picture. In fact, looking throughout the organization, it is obvious that individuals can succeed on this skill quite well. Yet, the picture is likely to incorporate errors of perception of groping the situation, favoring a known view and seeing, as the verse states, only one side of a thing. Based on this original intent of the parable, the responsibility of the manager is to bring the insight to the situation so that it is addressed fully and appropriately. The power of the parable is the challenge to the individual find a way to develop that level of understanding.

Is a clear understanding necessary to function in the management position. Absolutely not. Some organizations essentially built on deception can continue in that mode for some time, and clarity may not be welcomed. Thus, the challenge is directly to each individual to accept or decline as time and conditions dictate.

Chasing the Ball into the Street

July 23, 2006

There is no feeling so helpless, as seeing from a distance, a child chasing a ball that is headed for the street. Will that child remember to stop? It’s an acute fear of anyone who has children, and the fear never goes away, even when one’s own children have long grown up. We prepare for the situation, hoping that it is never tested

In this preparation with the child, there is an important point that is often overlooked. People react faster to instructions that tell them what to do compared to those which direct them what not to do. The mental processes to execute the two types of instructions are not the same. People are more likely to be able to execute the positive instruction successfully.

So the instruction: “Stop at the curb” is more effective than the more often used “Do not run into the street.” Training should emphasize this direction.

Emphasizing the instructions about what should be done, rather than what should be avoided is a more effective strategy to get the desired result in many activities. It is worth the effort to give some thought to ensure that the instructions are phrased in the most appropriate manner.

One other point about the ball. The immediate safe response is the most important aspect, but the longer term considerations can also be addressed. A child may believe that if the ball is crushed in the street, he will be without it. Reduce the long term consequences of this perspective. Make it clear that if the ball does go in the street and is crushed by a car, the adults will put aside the important things they are doing and immediately go to the store to replace it. Then do it. If the time comes and the ball has to be replaced, it is a very satisfying trip. There are plenty of other opportunities, with much less at stake, to teach about the consequences of their actions.


To send this post to a parent with a small child, copy and send the link:


Another Lousy Presentation at Work

July 22, 2006

What is it that makes intelligent people sabotage their work by organizing and delivering presentations that are well below their native ability? I’m not even thinking about the quality of the PowerPoint slides; we’ll leave that for another time. Things like rushing around in front of the audience at the last minute because the copier didn’t work or the projector did not interface with the computer. Sometimes it’s not giving the audience enough perspective or spending too much time on the background. Or apologizing for busy slides, instead of fixing them. Then, there is running over the scheduled time so that those in the audience lose their interest as well as any good will toward the speaker. After having suffered through a few too many of such presentations, I’ve put together this list of a few straightforward things to keep in mind.
Show up Early
You know when the meeting begins. Be prepared and test the equipment. This preparation gives a better impression than rushing in at the last minute because you need to be seen as “busy”.

Practice at least once.
The most needed revisions quickly become obvious.

Know and respect your audience.

Think about what the audience needs to learn from the presentation, what they are likely to know, and what presentation style is the most appropriate. If you believe what you are telling them, make sure the audience knows it.

Use the first rule of rhetoric: “Render the audience docile.”
Docile, in its formal definitions, means “easily taught” or “ready to learn”. Using first rule of rhetoric is to give the provide evidence or reasons for the audience to listen and take you seriously. The reason will be specific to the talk. As examples, the evidence may be to establish your credentials or show the significance of the topic.

Don’t apologize for the slides and handouts.
Fix it if you can. If you can’t, no need to call attention to the deficiencies.

Finish early.
It is appreciated by the audience and makes the presentation more favorably remembered.

This article dealt with performance of the individual. A related post Presenting Quantitative Information Well–Lessons from Playwrights focuses on the methods to sharpen the presentation of the content