How to Make Smart Decisions

Without Getting Lucky

Dr. Philip S. Grant

philip.grant@unbc.ca

« Try to be different in the face of

everyone thinking the same. »  
- Richard D. Jones
TODAY’s AGENDA

Module Lecture

Simulation Discussion

Simulation Practice Round 2 (due at 11)

Simulation Discussion

Simulation Practice Round 3 (due at 12:15

 Making Strategic Decisions

If you were to put $5000 on a horse

how would you decide?
What makes a ‘Decision' Hard?

1–4
 Strategic Decisions
Strategic decisions are about:

Therefore, they are likely to:

 Critical vs Strategic Thinking

• To make Strategic Decisions use Strategic Thinking.

• Strategic Thinking is thinking beyond the

specific issue or task at hand. But this is really
hard!Strategically, first think Critically
• To Think
• Critical Thinking: a toolset, methodology and
process to solve problems and make decisions.

Critical thinking aids your Strategic Thinking

 Tools of Critical Thinking

If the facts don’t hang together on a latticework of theory,

you don’t have them in a usable form – Charlie Munger
The Usual Suspect

1–9
https://www.headscratchers.com
 A BASIC STRATEGIC THINKING MODEL
Phases of Decision Making Problems can arise at each level

• Criteria is not clearly defined

• Faulty prioritization

• Insufficient Data
• Faulty research techniques

• Inadequate modelling
• Loose decision parameters

• Cognitive Biases
• Skipping the steps above
 Using Key Metrics (Scientific Method)

Environment PEST, 5 C, 5-force

Competition Benchmarking

position
Customers &
Segmentation
Consumers
time

Situation Analysis SWOT

Cost-Benefit Financial statements

Key Metrics should track and report on current and future

results, AND give you the time to change an outcome they predict.

Acceleration Metric: Good Key Metrics predict how much time in

advance of what they predict you will have to change the
outcome.  
 Opportunity Cost

Most People Focus on What Something Costs today

Direct Cost Questions Indirect Cost Questions

1. And then what? 1. Cost of not doing it?
2. Compared to what? 2. What else could you be doing?
3. At the expense of what? 3. Cost of not doing it right?
 “So What?” Analysis

Asking "So What?" reveals meaning while uncovering

insights about the firm’s goals, prospects and assumptions

When you ask "So What?" you're really asking:

1. What's the impact/value?
2. How does what I'm doing affect my short and long term goals.
3. What are the mega trends out there and how does that affect
what I'm involved with? 
4. When I make this decision, who will be affected, what will

that effect be, and how does that matter?

 QUESTION YOUR ASSUMPTIONS

• Are your assumptions Optimistic, Pessimistic, Realistic? Useful?

• What are your assumptions based on? Is the info true and valid?
• Revisit and update them often.

A Covid-19 Recover Strategy

 Build Assumptions on Key Questions

…and build strategy on assumptions

1. What is the problem to be solved? (Objectives)

2. What is the relevant information? (Strategic Analysis)
(internal / external assessment)
3. Which of all our available resources
do we allocate to this particular problem? (Strategic Plan)
4. What are the options? (Strategic Plan)
5. Which option to select and for which reasons? (Strategic Plan)
6. How to implement the chosen solution? (Tactical plans)
followed by:
7. Implementation of chosen solution and controls (Tactical execution)
 Design Thinking

TRADITIONAL THINKING (DIRECTED) DESIGN THINKING (EMERGENT)

TELLS US WHAT IS LOOKS FOR WHAT COULD BE
PLANNING OF A FLAWLESS INTELLECT ENLIGHTENED TRIAL AND ERROR
AVOID FAILURE FAIL FAST
EXPERT ADVANTAGE IGNORANCE ADVANTAGE
RIGHT ANSWERS RIGHT QUESTIONS
RIGOROUS ANALYSIS RIGOROUS TESTING
PRESENTATIONS AND MEETINGS EXPERIMENTS AND EXPERIENCES
TELLING SHOWING
HEADQUARTERS IN THE FIELD
SUBJECT EXPERT PROCESS EXPERT
ARM’S LENGTH CUSTOMER RESEARCH DEEP CUSTOMER IMMERSION
PERIODIC CONTINUOUS
THINKING AND PLANNING DOING
IF YOU BUILD IT, THEY’LL BUY IT IF YOU INSPIRE THEM, THEY’LL BUY IT
 Design Thinking

TRADITIONAL THINKING (DIRECTED) DESIGN THINKING (EMERGENT)

TELLS US WHAT IS LOOKS FOR WHAT COULD BE
PLANNING OF A FLAWLESS INTELLECT ENLIGHTENED TRIAL AND ERROR
AVOID FAILURE FAIL FAST
EXPERT ADVANTAGE IGNORANCE ADVANTAGE
RIGHT ANSWERS RIGHT QUESTIONS
RIGOROUS ANALYSIS RIGOROUS TESTING
PRESENTATIONS AND MEETINGS EXPERIMENTS AND EXPERIENCES
TELLING SHOWING
HEADQUARTERS IN THE FIELD
SUBJECT EXPERT PROCESS EXPERT
ARM’S LENGTH CUSTOMER RESEARCH DEEP CUSTOMER IMMERSION
PERIODIC CONTINUOUS
THINKING AND PLANNING DOING
IF YOU BUILD IT, THEY’LL BUY IT IF YOU INSPIRE THEM, THEY’LL BUY IT
Learning from Mistakes on the Way to Tomorrow-
- Professor Daniel Kahneman
 FINAL THOUGHTS

Thinking smarter (without

getting lucky) is about using
your brain more intelligently.

Critical thinking is an enabling

tool for smarter problem
solving, decision making, and
creativity.

To do it well, you have to

practice and reflect. Knowledge Management Tools
WHAT ARE YOUR TAKEAWAYS?

1.
2.
3.
4.
5.