Planning

A Repeatable Planning Process Based On Identifying Value

Intro

Through several decades of work with organizations in planning, if we’ve learned anything it’s to expect the unexpected. The CTO of a very large technology company told us that he wants the ability to put in all of his “objective data” and have a system that would spit out exactly the right answer of where to steer the company in the future. Wouldn’t we all like that.  Planning, and by extension decision making, involves uncertainty. By using current information it is at best a guess about what to do to enact a future state.  Many elements go into planning, but one thing is for sure, you cannot simply dump in a bunch of opinions and information and expect there to be a methodology that will give you the perfect course of future action each and every time. So it’s important to step back, frame the problem, and use analytics to stress-test your plan through scenarios, assumptions, engagement with multiple viewpoints, and funding.

In this section, we cover several facets of planning. The first is in planning and scenario development, and using scenarios and analytics to test changes in assumptions and potential future outcomes to converge on a course of action or investment in which you have the most confidence. The second covers group decision making and how to employ groups to gain as broad a set of perspectives as possible in an organized framework, and to move away from “advocacy-based” decision making which tends to be a series of one-off planning attempts with no ability to continuously improve the planning process. The third area of coverage is in decision making which is at the core of planning – this is in the DNA of Decision Lens as a company and our software.  Finally, we will walk through how to draw out differences and make trade-offs in order to prioritize and enable convergence on a plan with confidence.

Planning and Scenarios

Planning out Portfolio Scenarios

Planning, at its core, is about framing objectives, prioritizing those objectives, and using the priorities as a guidepost for developing a course of action. As Winston Churchill said “plans are of little importance, but planning is essential.” It is in this process of planning that we shed light on what it is that we need to accomplish by making tradeoffs and testing what the likely outcomes will be of a given set of tradeoffs and priorities. The ability to make the planning process flexible while maintaining ease of change is something that can only be accomplished with the new set of tools and analytics that we have at hand today. In planning, collaboration is important in order to gain as many differing viewpoints into the future state as possible, and to incorporate as broad a level of thinking so that every eventuality can be anticipated.

A plan should not be developed as a silver-bullet one-off answer.

Rather, planning itself is the development of multiple future scenarios and stress testing those scenarios so that you arrive at the most robust path forward. Scenarios provide you with the ability to converge on a plan through the evaluation of multiple potential future pathways.

Equally important in planning is the ability to quantify both the tangible as well as the intangible within one framework. Oftentimes it is very difficult to ascertain how to measure intangible factors such as “improves competitiveness” or “aligns with business unit strategy” or “supports mission”. A methodology like the Analytic Hierarchy Process which is adept at quantifying the intangible and lining it up alongside the tangible and measurable enables you to develop priorities and then create a common viewpoint across a plan by bringing together non-commensurate scales of measurement.

The following documents about planning are a resource for background and thinking about how to guide your organization into the future.

Group Decision Making and Structure

Since the dawn of time, group decision making has been a process of influence and advocacy. Without the benefit of a framework within which to synthesize the varying perspectives of a group into a common and unified whole, we have seen groups engage in what can become a highly politicized dance of puts and takes in order to come to a decision. Oftentimes our customers tell us that they would just like to know who was even involved in a decision and why it was made – there is no audit-ability or learnings from a purely organic process of conference-table debate and decision making.

Time and time again it has been shown that groups are much better at making decisions that will have a positive lasting outcome than are individuals. Mistakes are often made when only one or a very limited set of viewpoints is brought to bear in a decision. The challenge is that organizations who wish to employ group decision making struggle to find a structure that can enable the group debate process in a way that can be deployed and repeated.

Time and time again it has been shown that groups are much better at making decisions that will have a positive lasting outcome than are individuals

Beginning with a methodology such as the Analytic Hierarchy Process, we are able to bring a diverse set of viewpoints together as a group and to establish priorities with which to make decisions. This methodology, embodied in software, enables us to elevate and make group interaction more robust. We are able to clearly see areas of difference and disagreement, and ascertain what trade-offs were made to get to a unified position. We can then evaluate the outcomes and go back to the decision process in the future in order to improve it. We can also determine the extent to which we have firm logic guiding the group versus “garbage in, garbage out” with little consistency in the group decision process. These types of heuristics are very beneficial to the group decision making process.

The following research pieces discuss the importance of group decision making, and how our new approaches, methodologies, and analytics help to drive a better decision making process that involves collaboration, transparency, open debate, priority, and ultimately settling on a course of action.

 

How to make a decision

Every decision is by its nature a prediction about the future. Given that there is no absolute truth, the best that we can do is to quantify what are subjective inputs about our judgment and experience. Oftentimes we are told that an organization wants to make an “objective decision”. A methodology such as the Analytic Hierarchy Process can certainly help with this by first focusing people on the objectives and priorities rather than advocating for particular alternatives, whether they be projects or investments. But, ultimately, every decision, even if quantified, is a path based on blended subjectivity.

Every decision is by its nature a prediction about the future

“How to make a decision” is, therefore, not a secret about how to divine absolute truth or even to find the “correct answer”. It is a process of combining multiple and subjective viewpoints into a unified whole, and using those viewpoints and priorities to evaluate potential future courses of action. It involves trade-offs and converging on the prediction about the future through the use of scenarios. The more explicit those trade-offs are, and the more quantifiable that they can be, the better the opportunity to look at the decision itself from multiple viewpoints, change it, test it, and have the confidence in a final course of action.

The following pieces are resources gleaned from many different publications to elucidate how to frame a decision, how to quantify factors that are inherently intangible, and how to ultimately arrive at a decision with which you can confidently move forward.

Drawing out Differences and Making Trade-offs

A major challenge of what we call “advocacy-based” decision making is that there is no way to understand or evaluate the trade-offs that were made to arrive at a decision. This can best be illustrated through an example. We approached a leading NFL team several years ago to work with them on improving their draft. We asked them how they currently evaluated what players they wanted to go after in the draft for each position. They walked us into a conference room with cork boards on the walls and there were index cards posted for each position and below that were pinned up index cards with specific players names that they wanted to pursue. As their debate and research progressed, they would move those cards up or down to indicate priority. We asked them what they did with the cards after the draft was over, and the team told us that they just took down the cards and put them in a drawer until next season.

The immense loss of information in an approach like this is staggering, not to mention the intellectual capital that is wasted. By losing the relationship of the cards for each position, and never capturing what specific priorities and trade-offs for each position there were and why certain players were deemed more valuable in a given position over others, the team was losing millions of dollars of investment in their scouting organization, coaching organization, and ownership group. How is it possible to improve draft outcomes if the process by which you approach the draft is completely opaque and not repeatable?

Arriving at a plan involves trade-offs. We have methodologies now, such as the Analytic Hierarchy Process, to guide the process of trade-offs for each individual and for a group as a whole so that the decision arrived at can be evaluated, changed, tested, and so that we know what specific trade-offs were made and the importance or influence that those trade-offs contributed to in the final decision.

The following information is useful in understanding more clearly how trade-offs play a key role in planning, and how the ability to quantify those trade-offs is a necessary if not critical element to better decision making and better performance.

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