Task 4: Methodologies and tools for solving complex problems: soft systems, dialogue mapping, IBIS, satisficing

Whereas traditional/simple problems can be solved with knowledge from one discipline, occur within one societal sector, and involve only one actor, complex problems occur

across multiple scientific disciplines and societal sectors, involve multiple actors and stake-

holders, and can be seen as a web of problems. Complex problems are inherently “wicked”. 

This means that the problem is difficult or impossible to solve because of four main reasons: incomplete or contradictory knowledge, the number of people and opinions involved, large economic burden, and the interconnected nature of these problems with other problems.

Solving complex problems involves making tough decisions and decision makers face

ambiguity,uncertainty, and conflict. They can no longer follow a single claim about the

nature of the problem at hand and its solution, but instead have to consider several problem

perspectives, and search for solutions accordingly.

The decision makers therefore can use different methodologies and tools to solve these complex problems:

• Dialogue mapping:- This is used in a group meeting to create a shared map of the conversation. The tool captures the key questions, ideas, and arguments, recording them in a network like map for everyone in the meeting to see.

• Satisficing:- This is a decision making strategy or cognitive heuristic that entails searching through the available alternatives until an acceptability threshold is met. It aims for a satisfactory or adequate result, rather than the optimal solution.

• MindMiester:- An online mind mapping software that allows its users to visualize their thinking. It allows for real-time brainstorming sessions between an unlimited number of users. 

I will consider one of the group work project we did of implementing an EHR software in a doctor's practice, using compendium dialogue mapping. 

As shown above we had three approaches of installing the EHR software:

• Do it ourselves
• Hire consultants
• Co-develop, i.e. using a mix of both internal and external staff

Through the discussion we were able to list all the pros and cons of each approach and we finally chose the one with more pros - Co-develop. 

Advantages of dialogue mapping

• The software can be used offline
• The contributions of each participants are acknowledged in the map, and it can be seen how they relate to others. 
• The group is able to see where the discussion is coming from and where it is heading to and thus able to correct if an error occurs.
• The map is visual and creates a collaborative mode and increases a shared understanding of the problem.
• Since the map captures the thinking process of the group, it is easier to update who was not in the meeting by simply viewing the map. 

Lessons learnt

One idea led to another idea.

The information was captured in real-time and enabled every member of the group to stay on the same page.

using the software made the group meeting more organized and interesting as everyone felt part of it.

References:

http://eight2late.wordpress.com/category/dialogue-mapping/

http://cognexus.org/dmforwp2.pdf
http://pictureitsolved.com/resources/practices/dialogue-mapping/
file:///C:/Users/tmuiruri/Downloads/Common%20Ground,%20Complex%20Problems%20and%20Decision%20Making.pdf

Comments on others
Gloria Siluka

Task 5: Contemporary technology responses - Personal Decision Making tools

Confidence is very crucial in leadership, but overconfidence is suicidal. People overestimate how much control they have and the speed with which they can get work done. They tend to be overconfident in judging their levels of success. Some also believe themselves to be better than others, which can undermine good character e.g. a driver believing he/she is a better driver than other drivers. That is overconfidence.  It causes people to overestimate their knowledge, underestimate risks, and exaggerate their ability to control events. Tony Robbins (an American life coach and motivational speaker) argues that most people overestimate what they can achieve in a year and underestimate what they can achieve in a decade.

The following example to demonstrates overconfidence trap as explained by Ken Blanchard -

Competence starts low and as long as you stick on the task, it grows over time. On the other hard, commitment follows four stages:-

First, when you begin a task, overconfidence is at work, and the commitment is high. This is the Enthusiastic stage.

Once Reality kicks in, and you realize that the task is not easy after all your commitment drops sharply. This is the disillusioned learner, and here is the trap. You are at risk of almost giving up and thinking of trying something else.

But as long as you gain sufficient momentum, you will get through stage two and rich success in stages three and four. The trick here is being aware of overconfidence effect and how it can trap you in stage two.

Interesting things about overconfidence

Knowledge and overconfidence

Having accurate knowledge is essential for making good decisions as it affects information search, information processing and decision making. However, knowledge is the main influencing factor of overconfidence as described below using the three types of knowledge.

• Experience knowledge: - Individuals with high level of experience overestimate the relevance of their past experience in transferring it to completely different situations. 

• Objective knowledge:-  People who are objectively unskilled significantly overestimate their own performance as better than average, although their actual performance is worse than average. Also, objectively competent people underestimate their own performance in comparison to the peer group rating their performance as below average, although their actual performance is above average. 

• Subjective knowledge:- This is the people's self assessment of their own knowledge. People suffer from illusion of control where they have excessive confidence in their control over outcomes of chance-driven tasks e.g. lottery. If people expect certain outcomes and these outcomes do occur, the participants are prone to assign the outcome to their skill rather than luck. 

Meta-knowledge and overconfidence

Meta-knowledge is an appreciation of what we know and what we do not know, the shape and limits of our primary or current knowledge. It helps in knowing what and when to do something. Better meta-knowledge is positively associated with high levels of performance as we can sensibly ask for more or better information. People need to assess their capabilities to appreciate what they can and can not do. Whether you know a lot or a little about a subject, you are still responsible for knowing how much you don't know. 

People display overconfidence in their knowledge, by overestimating how much they know and can do. To size up and factor in uncertainty into our judgments is crucial to successful decision making. People with meta-knowledge should be able predict uncertainty within reasonable ranges depending on the issues and risks involved. 

Effects of over-confidence

Overconfident executives are more likely to commit financial fraud because they make unrealistic promises and fraud seems the only way to deliver those promises.

Overconfident people mostly do not want to involve or consult others in the decision making.

Overconfident managers tend to generate optimistic performance estimates and therefore make risky decisions. 

Overconfident decision makers tend to be less concessionary in the decisions they make. They have a greater challenge in revisiting their prior decision when the competitive environment changes. 

Overconfident people tend not to recognize inaccurate perception of risk during the decision making process and thus the need to be irrational and to attain more knowledge prior to decision making. 

When we are overconfident, we do not try to improve our understanding. We do not check the facts and try to learn more.

How to reduce the effect of overconfidence in decision making

Switch perspective, keep looking back and be happy to see what you have already achieved, and when you rich the trap look forward and be happy to see how little it is needed to complete the task. 

Set better deadlines for your goals. People tend to spend more time in setting the goals than they spend setting deadlines for them, thus the goal maybe realistic but the time is too short to achieve them. 

Resist the urge to believe that your information and perception is better than others. 

References:

http://forum.johnson.cornell.edu/faculty/russo/Managing%20Overconfidence.pdf

http://people.tamu.edu/~ltihanyi/MandecBH.pdf

http://worldleadersconference.com/blog/leadership-overconfidence-its-like-walking-off-the-cliff/

http://aisel.aisnet.org/cgi/viewcontent.cgi?article=1255&context=icis2011

http://scholarworks.gsu.edu/cgi/viewcontent.cgi?article=1023&context=bus_admin_diss

Comments on others
Makali Nyirongo

Decision making issues - uncertainity, biases, in personal and group decision making

The world had become more complex and the information more abundant and therefore decisions have become more difficult. The pace of change and the range of choices have increased, and decisions have to be made more often. Unfortunately, we are faced with so many bias and uncertainty in personal and group decision making which leads to bad decisions. 

Personal decision making biases: Confirmation, Anchoring and framing

¤ People happen to favor information that confirms their beliefs. For example if you need to buy a product, and think of product A, then you go ahead of asking your friends about the product. Your friends tell you how bad the product is, you will tend to believe so and change your decision about using the product. Another example is one I faced in finding a job in accounting field, I had really struggled to get one (as an international student) and I thought of asking around how to go about it. Most friends who have been here for long insisted that its hard to get a professional job having the visa restrictions. Since I had tried, and the friends confirmed so, it became a belief and I decided to look for a job outside my career. I also happen to work with graduates in different fields e.g. Accounting, Business Administration, and Marketing etc.  still working in nursing field, since they believe that it is the most available and "easy-to-get" job in Australia, and some have even decided to change their career to nursing.

¤ We have the tendency to rely mostly on the first piece of information presented to us. For example, using the same example above of finding a job, Most organization needed someone who can work full-time, and I was only allowed to work for 40 hours per fortnight. My cousin gave me information regarding other different types of jobs that I can get and do with these restrictions. These jobs included working as an assistant in nursing or in customer service for McDonald, Woolworth, and Kmart etc. He started with Assistant in nursing and insisted how better paying it is compared to the rest, was flexible and readily available. This affected my decision as I relied on the pay and flexibility. I needed money, and I wanted a job that will fit in my school schedule.

¤ The way you frame information has a large impact on how the person receiving it feels about it, and in turn affects the choices he/she makes.  It is mostly driven by emotions.People tend to be risk averse when information is posed in terms of gains but risk seeking when information is posed in terms of avoiding losses. For example at work where I work as an assistant in nursing, there is one client who has a very strict daughter. One day while attending to the client, the daughter told me "If you fail to put the call bell close to mum, and anything happens to her, you will be responsible and you will pay it hard.." Wah! Was that a threat?... That really influenced my actions, and every time I get into that room I have to ensure that the call bell is close to her mum, I can't dare forget! What if she told me "Please make sure mum has the call bell so that she can call when she needs something" 

Group decision making biases

The group decision making bias that disturbs me most is Group failure. This is assuming that with many smart people involved, good choices will follow automatically and therefore failing to manage the group decision-making process. Members agree prematurely on the wrong solution. Then they give each other feedback that makes the group as a whole feel certain that it is making the right choice. Members discourage each other from looking at the flaws in their thought process. 

The groups may become polarized, with members shifting unreasonably to more extreme position or clinging to opposite sides of an issue. Therefore, progresses toward a rational decision become impossible. Groups can make better decisions than individuals, but only if they are helped along by a skillful leader. There is little excuse for using costly group meetings to make inferior decisions.

How to overcome group distortions

v There should be clarity of language and mutual understanding among all members of the group.

v All members of the group should seek both knowable facts and reasonable estimates of the "unknowable" that will need to make the decision.

v The group should allow enough time for brainstorming and planning before making a decision.

v Leaders should encourage disagreement in early stages of any group process. Then as more facts and insights are gained, the leaders should guide the group toward convergence on a final choice.

v Leader should rarely state their own opinions early in group's deliberations because many group members will fear to offer their own ideas if they contradict the leader’s.

v The group should avoid coercion.

.

References:

John S. Hammond, Raph L. Keeney, and Howard Raifa, Harvard Business Reveiw: The hidden traps in Decision making, 1998

http://http-server.carleton.ca/~aramirez/4406/Reviews/TPham.pdf

Comments on others
Steve Baillie
Shaun Mays

Decision Making Typologies

A leader can use different models in decision making process i.e. The descriptive model, Normative model, and prescriptive model. The decision maker should consider the following to make an effective decision:

v The quality or rationality of the decision.

v The acceptance or commitment on the part of subordinates to execute the decision effectively.

v The amount of time required to make the decision.

 I will concentrate on Simon's normative Model of decision making.

Simon's normative model has four phases: - intelligence, Design, Choice and implementation. The decision maker becomes aware of the problem, posits a goal, carefully weighs the alternatives, chooses among them according to his estimates of respective merits and finally evaluates if the choices made solves the problem. The decision maker has a limit of how much information he can manage, and chooses the alternatives that he/she believes does the most good. The leader may use past experiences to make personal decisions, financial planning, investment decisions and so on. It helps the leaders to be aware of their strengths, weaknesses and inclinations, thus help them to become better decision makers.

I will use two examples to demonstrate this:-

1). Consumer buying decisions

Let’s watch the following to see how the customers make buying decisions using normative model.

The consumer recognizes a need and searches for information (Intelligence), evaluates the alternatives (Design), then decides what to buy (choice) and later evaluates whether what he/she bought satisfies the need (Implementation).

2). Personal decision

Personal decision to Australia for further studies

Intelligence: - I had to identify the problem/solution that triggered the decision and collect information. I wanted to grow my career, to improve my knowledge, to expand my network, get new experiences so that I can get a better job with better income, have job satisfaction in future and do something for myself. I have always wanted to be involved in the management of a well-established organization. There were several factors that were affecting my decision:

Location: - Where do I want to undertake my studies? Location depended on several factors too i.e. the weather, economy, security, opportunity to settle after studies, complexity of Visa application process, any personal contacts in that city, reputation of the education system, cost of living, Opportunity to work and so on.

Finances: - Will I afford it? What is cheaper, studying abroad or in Kenya in terms of tuition fees, cost of living, and travel expenses to and from home (Kenya)?

The course: - I had to choose to undertake for further studies. I had to review my background knowledge, career direction and if the course is offered. I had to choose a course that will also help me to get my permanent residency; i.e. is the course on Skilled Occupation list? I also had to look at the job opportunities available once I complete my studies.

 Income: - After I complete my studies, how much will I earn when in Kenya vs. when Abroad? Also while at school how much will I earn to support my daily expenses?

Duration: - How long will the course take?

My job: - Quitting my job and travel abroad to start all over again.

Design:- I had to describe the alternatives in terms of location and the course, which must include just what I value. Among the factors mentioned above that affected my decision, I had to rank what I valued most to the least. For locations I had Kenya, Australia and USA. I also had to give a grade; poor, okay or good about how I viewed about the factors in those three locations. For the course to pursue I had to check on my background education and experience, what career direction I want to follow and whether the course will enable me to settle in my country of choice.

Deciding on the location

*Ranking on what I value from least to high: * 0=least, 1=medium, 2=high

The ranking was done according to my situation while still in Kenya. For example getting a Visa to study in USA is so complex compared to Australia visa, although cheaper.

Choice: - The decision maker chooses what he/she believes does the most good. therefore I used the above criteria to evaluate the alternatives and choose the best. Going with the ranking above Australia (location) become the high in ranking from USA. It also became high in ranking among things that I value most like income, opportunity to settle, economy, security, and reputation of education system. Although it was poor in terms of tuition fees and cost of living since it is very expensive, I can be able to work and earn more than what I could be earning while in Kenya to support myself. For the course, due to the way the technology is affecting the performance of most organizations, I chose to enrol in Masters of Management Information Systems to give me an in depth knowledge of using technology in better management of organizations.

Implementation: - I started the process to come to Australia. It wasn't easy though, the visa application process was long and demanding, had to take time off from work and it was challenging to gather the finances. Some of my expectations too were not met after I settled here, e.g. life is too expensive, working hours restrictions, jobs available among others.

Simon's normative model faces some criticism/ challenges:

v  There is a disparity between the requirements of the model and the capabilities of the decision maker.

v  Decision makers are faced with biases and uncertainties in decision making which affects their choices.

v  There is no specific agreed upon set of values that could provide criteria for evaluating alternatives.

v  Information about the outcome of choices made is fractional.

v  Decision makers do not have enough time and assets to collect the information required. 

v  The values of the alternatives are affected by the decisions made.

v  While knowledge technology does aid in collection and processing information, it cannot provide for computation required for the normative model. 

References:

http://www.sas.upenn.edu/~baron/papers/normative.pdf

http://bgwomeninict.org/language/bg/uploads/files/documents__0/documents__ccdce0783e140b6ff1b684435f435039.pdf

Comments on other students
Gloria's blog

Inputs to decision making - data, information & Knowledge; systems analysis

A decision is made when a decision-making agent receives inputs and returns outputs to the environment external to it. A decision-making  agent can be either human being or a machine e.g. computer.  We need three main elements in order to make good decisions:

Data-information-knowledge model

Data are syntactic entities. They are patterns with no meaning; an input to an interpretation process, i.e. the initial step of decision making. 

Information is interpreted data, data with meaning. It is the output from data interpretation as well as the input to and output from the knowledge-based process of decision making.

Knowledge is learned information. It is the information incorporated in the decision-making agent's reasoning resources and made ready for active use within a decision process. It is the output of a learning process. 

As I used to work with as an Auditor few years ago, I will use an example of auditing financial statements to show how auditors use data, information and knowledge to form an opinion about the financial statements. 

The auditors use data and information provided to them by the management, together with their skills, knowledge and experience to form an opinion about the financial statements. The auditor expresses an opinion indicating reasonable assurance that the financial statements are free from material misstatement and that they are fairly presented. The opinion formed is considered as the auditor's decision and its of great importance as key stakeholders e.g. financiers, shareholders etc.  of the company use it to make key decisions. 

The auditor use the process shown below:-

Planning:- The auditor plans receives formal acceptance of the client, plans the audit by allocating teams, nature and timing of audit work and verifys independence requirements. The challenge here is that the planning depends on the information given by the management to the auditor which may not be conclusive or transferred correctly. 

Risk assessment:- The auditor then assesses the risks that could lead to material misstatement in the financial statements. The challenge here is that the auditor uses their knowledge and often involves a high degree of judgement and requires significant level of experience by the auditor.

Audit Strategy Plan:- The auditor develops an audit strategy to address the risks identified. This involves designing a testing approach, deciding whether and how to rely on the company's internal controls, developing a detailed time table and allocating tasks to audit teams. The challenge here is on the allocation of tasks to team members as the auditor need to know and understand their strengths and weaknesses, what they can do best! 

Gathering of evidence:- The auditor gathers evidence used to form the opinion through testing and tracing transactions of the company as well as obtaining third party documentations. The challenge here is that the auditor has to apply professional scepticism and judgement when gathering and evaluating evidence.  

Finalization:- This is the last phase of audit where the auditor forms the overall conclusion based on the tests they have carried out, the evidence they have obtained and the other work they have done. There is a challenge here of forming the wrong opinion if the auditor don't have enough knowledge, the data and information given is not conclusive or enough or if there was misunderstanding between the auditor and the management when the information was being transferred.

Other challenges/ problems are:-

• The decision formed is based on the information given by the management to the auditor, which maybe distorted.
• What constitutes sufficient appropriate evidence is a matter of professional judgement.
• Auditors has to use their skills, knowledge and experience to form an opinion
• Financial statements are prepared on a going concern assumption that the company will be in operation for at-least the next 12 months. The assumption is made by the auditor using his knowledge, data and information provided. 
• The auditor can not obtain absolute assurance that financial statements are free from material misstatement. 
• The auditor uses selective testing in gathering information and some critical information/transaction maybe missed.
• It is difficult to detect fraud since it is intentionally hidden and may involve collusion by multiple participants.

References

PWC: Understanding financial statements audit. January 2013 . www.pwc.com

http://www.idi.ntnu.no/~agnar/publications/dke-95.pdf

Comments on other students blogs:
Russell
Steve Baillie