Decisions are often made on “gut feel” or instinct. When they are formally analysed it’s often nothing more than a few man-hours entered into a spreadsheet, or a comparison of vaguely defined, best, likely and worst cases.
The problem with almost all attempts at decision analysis conducted in organizations today is that they focus on what people know how to do—not what is required.
Most organizational activity involves interacting with others—customer, colleagues, partners, competitors. Yet this is rarely addressed in any formal analysis. The key to the success of most projects is effective stakeholder management, yet this is entirely absent from most formal planning activities. Decision Mechanics uses a range of Interactive Decision Theory technologies that explicitly address stakeholder behavior.
We also consider behavioral insights—how people actually act when faced with decisions—such as:
- other people’s behavior matters
- habits are important
- people are motivated to do the right thing
- people’s self-expectations influence how they behave
- people are loss averse
- people are bad at computation when making decisions
- people need to feel involved and effective to make a change
Ignore how people think and act and you’ll suffer unintended consequences.
Another way in which most decision analysis is inadequate is in its assumption that situations are static, linear and deterministic. Very few situations meet these criteria. Decision Mechanics specializes in analyzing rapidly changing situations with considerable uncertainty surrounding the facts.
Technologies
Decision Mechanics has practical experience with the following decision science technologies:
- agent-based modeling
- complexity science
- confrontation analysis
- data envelopment analysis (frontier analysis)
- game theory
- influence diagramming
- multi-criteria analysis
- stakeholder analysis
- strategic profiling
- system dynamics
- visual interactive simulation
