The Art and Science of Decision-Making
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Transcript of The Art and Science of Decision-Making
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Course Slides
Week 1
Introduction of individual students and their reasons for taking the courseo Finalize syllabus as/if needed
Organization of course: address specific issues each week Is decision-making primarily rational or emotional? Attributes of a “good decision”Assignment: Short essay on whether study of decision-making is an art or a science View Super Bowl Ads Week 2 – Perspectives on Decision-Making Is the study of decision-making more an art or science? Discuss the noteworthy Super Bowl ads
o Implications about how consumers make decisionsAssignment: Take MBTI
The Art and Science of Decision-Making – Spring 2014 – MGMT-5750
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Course Slides
Week 3 – Individual Differences Contexts for thinking about decisions
o Rational vs. emotionalo Prospective vs. retrospectiveo Individual vs. group decisionso Advising vs. making decisionso Personal vs. business vs. government contexts
Discuss MBTI and implications on decision-making How can understanding personal differences help in explaining decisions?Assignment: Read Blink by Gladwell (Chapters 1-4; Conclusion) Week 4 – Self-Awareness Discuss Blink and implications for decision-making Does self-awareness help or hurt decision-making? How does knowing yourself help in making decisions about moving or a career change;
about leading a team?Assignment: Select essay topic Read Thinking, Fast and Slow by Kahneman (Chapters 1-4, 10-13, 19-21, 27)
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Course Slides
Week 5 – What Impacts Decisions – When and How to Make Timing of decisions (and how to influence) What does science (in terms of type 1 and type 2 delineation) tell us about making
decisions?Assignment: Essay due applying MBTI and reading to a past decision Read Deciding How to Decide, HBS, Nov. 2013 (from web site) Week 6 – The Scientific Approach Decision trees Reprise – is decision-making art or science? Process vs. the decision itselfAssignment: Read legal case from course web site
Week 7 – Individual vs. Group Decisions
When are group decisions better/worse than individual decisions?o In businesso In families
Are juries rational or emotional? Voters?Assignment: Decide on an advocacy role
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Course Slides
Week 8 – Influencing Decisions
Students present their arguments for what they advocate Role of influencer(s)
o Art or science?Assignment: Write a short paper on takeaways from the advocacies Week 9 – Decision-Making Debrief and Decision-Making Process What have we learned about decisions?
o Best process(es)o Use of group (or not)o Role of information/ “facts”
What are the right metrics for decisions?Assignment: Select final paper topic (3-5 pages) Read Competing on Analytics and The Ultimate Measure (from web site)
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Course Slides
Week 10 – Supporting Decisions Developing the information you/someone else needs Market research How to make decisions with imperfect knowledge
o “Big data” vs. “insights” How should we measure/post-audit decisions?Assignment: Select final paper topic
Week 11 – Positioning and Communicating Decisions The importance of words The impact of implementation on how the decision is viewedAssignment: Read Complexity Theory and Negotiation, HBS, June 2002 (from web site) Week 12 – Negotiation Negotiation within a as well as between parties Are explicit negotiation agreements (e.g., arbitration) a good model for all decisions?Assignment: Complete final paperRead Being Wrong by Schulz: Chapters 1-3, 13-15
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Course Slides
Week 13 – The Decision-Making Process What have we learned about decisions?
o Best process(es)o Use of group (or not)o Role of information/ “facts”
How do you ensure there is learning; improving one’s decision-making?Assignment: Complete final paper on a decision to be made in the future
Week 14 – How Can We Make the Process and Substance of Decisions Better?
Summary of course Is decision-making a puzzle or a mystery?
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Issues to Discuss
Art or scienceo Process vs. the moment of truth
For your considerationo Replicability; predictabilityo The role of risko The role of facts
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Quotes
“Artists take as central what scientists (and the rest of us) usually sideline as much as we can: that reality as we know it is inevitably askew, refracted through an individual and idiosyncratic mind.”
- Kathryn Schultz, Being Wrong
“We all know that Art is not truth. Art is a lie that makes us real.”- Picasso
“Advertising is fundamentally persuasion and persuasion happens to be not a science, but an art.”
- Bill Bernbach
“Advertising is based on fixed principles and is reasonably exact. We know what is most effective and we act on basic laws.”
- Claude Hopkins
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MBTI: Understanding Communications Preferences in Yourself and Others
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Common Uses of the Myers-Briggs Type Indicator
• Understand self
• Explore implications for communication– Understand that others are different from you – Understand others’ preferences and how to speak their
“language”
There are several important uses for MBTI theory:
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It is important to remember what MBTI theory is and what it is not
• A theory describing observable personality distinctions
• A measure of individuals’ preferences in communication
• A framework to explain some aspects of perception and decision-making
What It Is• Based on actual empirical data or
“provable” experiments
• A statement about who someone is or even how they commonly act
• An all-encompassing explanation of personality, thought process, and individual psychology
What It Is Not
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Cognitive Functions & Functional Development
S, N, T, and F are called the cognitive functions in MBTI theory. Humans use all 4 cognitive functions, but naturally we develop the ones that we prefer first.
Test-Retest Reliability:<9 mos >9 mos
Same on 1 or more ~100% 99% Same on 2 or more 98% 94% Same on 3 or more 87% 72% Same on all 4 51% 36%
<9 mos >9 mos E-I 82% 75% S-N 87% 76% T-F 82% 75% J-P 83% 77%
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The Four Scales
EExtravert
IIntrovert
Where do you get energy?
SSensing Intuition
How do you take in information? N
TThinking
FFeeling
How do you make decisions?
Judging Perceiving
How do you deal with the outside world?J P
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Extraversion vs. Introversion
Learn best through doing or discussing
Characteristics:
Focused on outer world of people and external events
Prefer to communicate by talking
Tend to speak first, reflect later
Sociable and expressive
Learn best by reflection
Characteristics:
Drawn to their inner world of ideas and thoughts
Prefer to communicate in writing
Tend to reflect before acting or speaking
Private and reserved
Where do you get energy?
E I
Extravert Introvert
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Extraverts/Introverts within the U.S. Population
49%
51%
Extraverts
Introverts
Source: Center for Applications of Psychological Type (capt.org)
Men: 48% E 52% IWomen: 50% E 50% IClass ‘13: 62.5% E 37.5% IThis Class: 61% E 39% I
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Sensing and Intuition
• Take in information through five senses• Focus on what is real and concrete• Value practical applications, common
sense• Want information step-by-step• Trust experience and facts over gut
instinct• Use details to build up a big picture• Oriented to the present
• Take in information through “sixth sense”
• Focus on possibilities• Value innovation and imaginative
insight• Jump around, leap in anywhere• Trust inspiration, “gut feel”• Start big picture, don’t want details• Oriented to the future
Characteristics: Characteristics:
Sensing
NIntuition
How do you take in information?
S
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Sensors/Intuitives within the U.S. Population
30%
70%
Intuitives
Sensors
Source: Center for Applications of Psychological Type (capt.org)
Men: 68% S 32% NWomen: 72% S 28% NClass ‘13: 52% S 48% NThis Class: 25% S 75% N
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Thinking and Feeling
• Use cause-and-effect reasoning• Focus on content and analysis• Look for outcome that “makes sense”• Strive for impersonal, objective truth• Reasonable• Can sometimes be too critical
• Guided by values and feelings• Focus on affect and emotions• Look for outcome that “feels right”• Strive for personal harmony• Compassionate• Can sometimes be illogical
Characteristics: Characteristics:
TThinking
FFeeling
How do you make decisions?
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Thinkers/Feelers within the U.S. Population
55%45%Thinkers Feelers
Source: Center for Applications of Psychological Type (capt.org)
Men: 61% T 39% FWomen: 29% T 71% FClass ‘13: 55% T 45% FThis Class: 29% T 71% F
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Judging and Perceiving
• Systematic, organized, structured• Plan – and stick to it• Like closure – to have things decided• Like to make lists – and want to get
everything crossed off• Create agendas – and stick to them• On time
• Spontaneous, open-ended, flexible• Adapt – strive for quality• Like things loose and open to
change• Avoid lists, or at least completing
everything on them• Don’t always stick to agendas• Casual about time
Characteristics: Characteristics:
JJudging
PPerceiving
How do you make decisions overall and about your time?
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Judgers and Perceivers within the U.S. Population
43%
57%
Judgers
Perceivers
Source: Center for Applications of Psychological Type (capt.org)
Men: 58% J 42% PWomen: 56% J 44% PClass ‘13: 68% J 32% PThis Class: 82% J 18% P
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Each of our cognitive functions also have a preferred “attitude”
• Introverted Sensing (Si) reviews prior facts, instructions, and details in one’s mind
• Extraverted Sensing (Se) gathers facts and details from the outside world
“Attitude” refers to whether a function is used in an introverted manner or in an extraverted manner. For example:
• Introverted Thinking (Ti) analyzes things logically before taking action
• Extraverted Thinking (Te) organizes things logically while taking action
An ESTJ or ISTJ will typically practice Si and Te, while an ESTP or ISTP will typically practice Se and Ti.
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Tips for Communicating with…
Es• “Rope-a-dope”• Voicemail• Meetings• Respond quickly
Is• Materials in advance• Email• Breaks from meetings• Respect personal space
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Tips for Communicating with…
Ns Ss• Start with the headline,
conclusions, big pictures• Ask before giving details• Use analogies• Focus on possibilities
• Start with the data..let them play with it
• Exhaust all questions• Be specific• Focus on process
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Tips for Communicating with…
Ts Fs• Appeal to logic; “I think…”• State criteria first
Include human issues as a criteria if appropriate
• Deal with logic, structure• Appear organized
• Appeal to emotions “I feel…”
• Focus on the human implication Can include the need
for people to think the decision is a good one
• Deal with values, impact on others
• Appear friendly
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Tips for Communicating with…
Js Ps• Expect, respect
schedules, deadlines, etc.
Come to a conclusion
• Provide a time for a decision to be made
• Set expectations for outcome
• Don’t (appear to) force a decision
Allow questionsProvide choices,
outcomes• Provide a threshold for a
decision to be made• Do not appear to expect
a particular outcome
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The 16 Types – General Population (Class)
ISTJ ISFJ INFJ INTJ
Sensing Types Intuitive Types
Extr
aver
tsIn
trov
erts
ISTP ISFP INFP INTP
ESTP ESFP ENFP ENTP
ESTJ ESFJ ENFJ ENTJ
5%(0%)
7%(0%)
4%(7%)
5%(0%)
13%(5%)
12%(7%)
2%(11%)
3%(11%)
4%(0%)
7%(0%)
7%(11%)
3%(0%)
11%(7%)
11%(7%)
4%(28%)
2%(7%)