[Winning Decisions]
Chapter 5: Intelligence in the Face of Uncertainty &
Interlude B: Technologies for Aiding Decisions
Public Decision-Making Skills
[DPAD 334] Public Decision-Making Skills
Professor Jeong Rok Oh
[Module 06]
Book Overview: Winning Decisions
• Introduction & [Chapter 1] Setting the Course
• Phase I. Decision-Framing
• [Chapter 2] The Power of Frames
• [Chapter 3] Creating Winning Frames
• Interlude A: Improving Your Options
• Phase II. Gathering Intelligence
• [Chapter 4] Avoiding Distortion and Bias
• [Chapter 5] Intelligence in the Face of Uncertainty
• Interlude B: Technologies for Aiding Decisions
• Phase III. Coming to Conclusions
• [Chapter 6] Choosing: A Pyramid of Approaches
• [Chapter 7] Managing Group Decisions
• Interlude C: Implementing Your Chosen Option
• Phase IV. Learning from Experience
• [Chapter 8] The Personal Challenges of Learning
• [Chapter 9] Learning in Organizations
• [Chapter 10] Bringing It All Home
• Epilogue: Learning into Action
Book Overview: Winning Decisions
[Chapter 5] Intelligence in the Face of Uncertainty
• Never test the depth of a river with both feet.
- African Proverb
Levels of Uncertainty
[Figure 5-1, p. 195]▪ Lesson: Never pretend uncertainty is smaller than it is.
1. A clear enough future
2. Alternate futures
3. A range of futures
4. True ambiguity
Defining the Limits of What’s Known
[pp. 196-198]• “Confidence-range estimates”
– How do you assess accurately how much you really know in situations where so much is unknown?
• Lesson: Confidence-range estimates can be more useful to decision-makers than a numerically exact (but not
exactly correct) single-point prediction.
Becoming Well-Calibrated
[pp. 198-204]• Becoming “well-calibrated”
– learning to forecast confidence ranges more accurately
• Provide ranges and confidence levels for estimates
• Provide accelerated feedback and training to help people calibrate
• Lesson: Feedback and accountability can teach people to
develop a sharper sense of how much they do – and do not –
Find the Hidden Future Problems
[pp. 204-206]▪ The estimation techniques will help when you have a fairly good sense about where you stand.
– But What about when ambiguity increases?
▪ Lesson: Rather than trying to pick the one “most- certain” future, preserve inherent uncertainty by
generating multiple views of the future and trying to expect the unexpected.
Pro/Con Reasoning: A Balanced View
[pp. 206-207]• Forcing people to look at arguments both for (“pro”) and against (“con”) their expected
outcome is a good way to ensure intellectual honesty and a balanced view.
• Use pro/con reasoning to ensure a balanced view.
• List the reasons why your favored alternative is likely to succeed.
• List the reasons why it is likely to fail.
Pro/con
Exercise: Pro/Con Reasoning
(Topic: THAAD* in S. Korea?)
* Terminal High Altitude Area DefensePros Cons
Exercise: Pro/Con Reasoning (Topic: )
Pros Cons
Factor Pros Cons
Trade/Export South Korean companies will have more
power in USA market Production from weak industries in South Korea (e.g., agriculture) will be decreased
Consumer South Korean citizens will purchase USA products by lower price
In the long term, South Korean citizens will purchase by higher price in weak industries in
South Korea due to monopoly of USA companies
Investment /employment
Employment in South Korea will be
increased by foreigners’ investment Employment will be decreased in weak industries in South Korea
Outcomes South Korea will have more competitive
power in the world The rate of dependence
on USA economy will be increased
Pro/Con Reasoning: An Example of FTA*
Prospective Hindsight: “Back to the Future”
[pp. 208-210]• “Prospective hindsight”
– You can harness your ability to explain events in hindsight to better appreciate possibilities that still lie ahead.
• Use prospective hindsight to stimulate insight
Exercise: Mental Time Travel as an Aid to Imagination
[p. 209]
• Give question A to one group and question B to the other.
• A. How likely is it that a South Korean citizen will be selected as a winner of the 2020 Novel Prize? Think about all the reasons why this might happen.
• B. Imagine that a South Korean citizen has just been
selected as a winner of the 2020 Novel Prize. Think
about all the reasons why this might have happened.
Fault Trees: Paths to Trouble
[pp. 210-215]• “Fault Trees”
– A hierarchical diagram designed to help
identify all the paths to some specific “fault” or problem.
• Fault trees detail the many ways in which a
complex system might fail.
Use a Fault Tree to Systemically Organize Possible Paths to Trouble
[pp. 210-215]
• On the primary “branches,” list the major categories of
potential problems that might befall your chosen alternatives.
• Then list subgroups of causes within each major branch, including an “all other” category.
• To be useful, fault trees must be reasonably complete, at least in identifying the major categories of potential trouble.
Exercise: Fault Trees (Public Enterprise* Failure due to Decreasing Profits)
* e.g., Korea Land & Housing Corporation [Figure 5-2, p. 212]
A. Decreasing Revenues B. Increasing Cost A-1. Decreasing Number of
Customers
B-1. Increasing Construction/Building Materials Costs
A-2. Decreasing Average
Construction Check B-2. Increasing Labor Costs
A-3. B-3. Increasing Overhead Costs
A-4. B-4.
A-5. B-5.
A-6. B-6.
A-7. B-7.
Exercise: Fault Trees
(Fault A. “Decreasing Revenues”)A-1. Decreasing Number of Customers A-2. Decreasing Average Construction Check
- Incorrect pricing - Decreased perceived value of customers
- Unclear image of property - Incorrect pricing
- -
- -
- -
- -
- -
Exercise: Fault Trees
(Fault B. “Increasing Cost”)B-1. Increasing Construction/Building
Materials Costs
B-2. Increasing Labor Costs
B-3. Increasing Overhead Costs
- Improper purchasing and receiving
- Increasing overtime
scheduling - High debt service cost
- - -
- - -
- - -
- - -
- - -
Scenario Planning: Paths to the Future
[pp. 216-220]• “Scenario Planning”
– A disciplined method for imagining possible futures.
• Whereas fault trees highlight individual causes, scenarios focus on the joint effect of many overlapping causes.
• Scenarios work by dividing our knowledge into two areas: (1) “trends”
– things we believe we know something about – and (2) “true
uncertainties” – elements we consider uncertain or unknowable.
Scenario Planning: Paths to the Future
[pp. 216-220]• Scenario planning is especially useful when:
• Uncertainty is high relative to decision-makers’ ability to predict or adjust.
• Too many costly surprises have occurred in the past.
• The quality of strategic thinking is too routine or bureaucratic.
• Industry or field has experienced significant change or is about to.
• There are strong differences of opinion, with multiple opinions having merit.
Construct Scenarios to Envision Multiple Futures
[pp. 220-224]1. Define the scope.
2. Identify the major stakeholders.
3. Identify basic trends.
4. Identify key uncertainties.
5. Construct initial scenario themes.
6. Check for consistency and plausibility.
7. Develop scenarios.
8. Identify research needs.
9. Develop quantitative models.
10. Evolve toward decision scenarios.
Scenario Design: 2x2 Matrix
(e.g., Ministry of Public Safety & Security)[Figure 5-3, p. 222]
• Changes in playing field? (e.g., earthquake) – Minor / Profound
• Impact of technology? (e.g., computer system) – Gradual / Radical
• Scenario A: Minor & Gradual
• Scenario B: Profound & Gradual
• Scenario C: Minor & Radical
Scenario Design: An Example of FTA*
Increase of National Competitive
Power
Damage to South Korean Citizens’ Interests
Minor Profound
Gradual Scenario A
“We need to do FTA.”
Scenario B
“We need to stopFTA.”
Radical Scenario C
“We need to expand FTA.”
Scenario D
“We need to adjust FTA.”
Exercise: Scenario Design (Topic: )
_________
_____________________
_____________ ____________
______ Scenario A _____________
Scenario B _____________
______ Scenario C _____________
Scenario D _____________
Knowing When Enough is Enough
[pp. 226-229]• Many decision-makers ask for too much information.
– Make things as certain as possible, but no more certain.
• Lesson: Ask yourself whether you may be collecting too much information. More information increases decision- makers’ confidence, but not necessarily their accuracy.
Interlude B: Technologies for Aiding Decisions
[pp. 231-238]• The underlying technologies
- The new decision-aiding systems use two different kinds of AI systems:
• Rule-based systems: A series of “if, … then …” which are adept at
the “intelligence-gathering” aspects of the decision-making process.
• Network structures: A computational bridge, matching huge
amounts of extracted information to the best available option, a
“coming to conclusion” function.
Group Work: Gathering Intelligence Skills for decision-making
• In teams, discuss your experiences and/or opinions about gathering intelligence skills in this chapter (e.g., confidence-range estimates,
prospective hindsight, pro/con reasoning, fault trees, and scenario planning)
• Open discussion on your experiences and/or opinions based on two questions:
• What is your common or favorite gathering intelligence skill for decision- making?
• Will you continue to use this gathering intelligence skill for your decision- making? Why or Why not?
• Report out
Next Class
Reading: Winning Decisions text book (Chapter 6)
References & Sources
1. [Text book: Korean version] 이기는 결정 / Russo, J. E. & Shoemaker, J. H. 지음 / 김명언, 최인철 옮김 / 학지사 / 2010년 01월 20일 출간
2. [Text book: English version] Russo, J. E. & Shoemaker, J. H. (2002). Winning decisions:
Getting it right the first time. Doubleday: New York.
3. Levasseur, R. E. (2000). Breakthrough business meetings: Shared leadership in action.
Bob Adams, Inc.: Holbrook, MA.
4. [Student Sample Project Report] 박소영 (2016). Final Project Report on Decision-Making Practices in Public Administration: “Free Trade Agreement between South Korea and USA,”
DPAK411 Course entitled “Special Lecture in Public Administration” (Course Instructor:
Professor Jeong Rok Oh), Korea University Sejong Campus
[Winning Decisions]
Chapter 5: Intelligence in the Face of Uncertainty &
Interlude B: Technologies for Aiding Decisions
Public Decision-Making Skills
[DPAD 334] Public Decision-Making Skills
Instructed by Professor Jeong Rok Oh [강의: 오정록 교수] Designed & Edited by So Young Park [디자인 및 편집: 박소영 학생]
[Module 06]
