Articles:
When random choices are best
Related Software Philosophies
I'll put some more links on auto-analytics in here at some point.
Ray Dalio has said some interesting things about removing ego from decision making
Books:
Polya - How to solve it - A Classic
Kahneman - Thinking Fast and Slow
Tetlock -SuperForecasting
Hindman - Forecasting Principles
Quotes on Decision Making:
“To better avoid errors, you should talk to people who disagree with you and you should talk to people who are not in the same emotional situation you are.” - Kahneman
Training:
I'm training for this competition, although I have no expectations that I will be good at this.
Or if you have a good bit of money, CFAR can teach you to make better decisions.
Discussions:
You can spend way too much time reading about decision making on this discussion board: LessWrong Discussion board search for decision making
From Economics:
These aren't the best summaries - all just ways to start a discussion within an organization about decision making. A lot of this section is from a wikipedia binge.
SWOT
Swot is a way to start a conversation about the Strengths, Weaknesses, Opportunities, and Threats of a plan. Once those lists are made, some people can sometimes match strengths and opportunities and get something out of this. According to some studies, the outputs from SWOT are typically not used. But you have to start a strategy conversation somehow. At least this does that much. I don't find SWOT super useful in comparison to Five/Six Forces and other methods listed here.
The great strength of SWOT is in simplicity and speed. You can SWOT something in your head in almost no time, and you can discuss it with anyone, without having to write or read anything. Getting strategic discussions off the ground is useful.
Five Forces and other stuff from Porter
Five Forces is more interesting. Porter is seminal thinker on strategic management (SM). If you start studying SM, you cannot avoid reading a lot of his stuff.
Summarizing the wikipedia article on the topic. The Five Forces Porter describes are:
- Threat of new entrants (competing orgs and barriers to them)
- Threat of substitutes (competing equivalent products or services)
- Bargaining power of customers (output price pressure increases with #alternatives)
- Bargaining power of suppliers (input price pressure decreases with #alternatives)
- Industry rivalry (Positioning amongst competitors)
There is a sixth force described by Brandenburger, Complementors, that is the almost the opposite of Industry Rivalry. Complementors takes into account strategic alliances in a competitive ecosystem (a la intel and microsoft).
https://en.wikipedia.org/wiki/Strategic_management
https://en.wikipedia.org/wiki/Porter%27s_five_forces_analysis
Resource-Based-View
I like this (RBV) type of analysis because I believe that orgs can be usefully viewed as teams of people (human capital) organized toward a goal. Human resources should never be absent from consideration. RBV considers all kinds of resources, tangible and intangible. Casting a wide net like over resource planning is thought provoking.
RBV says - to obtain a sustainable competitive advantage:
1) Identify the firm’s potential key resources.
2) Evaluate whether these resources fulfill the following criteria (also known as VRIN criteria:
- Valuable - they enable a firm to implement strategies that improve its efficiency and effectiveness.
- Rare - not available to other competitors.
- Imperfectly imitable - not easily implemented by others.
- Non-substitutable - not able to be replaced by some other non-rare resource.
3) Develop, nurture and protect resources that pass these evaluations.
PEST, et. al.
PEST and it's derivatives encourage further discussion of an ecosystem (macro-environment) around strategy. This is a tool like SWOT for discussing an ecosystem and potentially an orgs place within it, particularly in the long-term view. Like SWOT, these tools are at their simplest a nemonic device to help you create lists of things that might affect strategic decision making - to start a conversation - there is no reason to expect any specific relationships to be identified.
Factors about your ecosystem that you might consider using this tool:
Political
Economic
Socio-Cultural
Technological
Environmental
Legal/Regulatory
Ethics
Demographics
Intercultural
From Statistics
Bayesian
Excellent, important video explainer - bayes applied to medical testing
Business Guides
Practical examples of organizations that came up with a decision making rubric early: https://review.firstround.com/the-6-decision-making-frameworks-that-help-startup-leaders-tackle-tough-calls
An important aspect of Disagree and Commit is that it is much easier to do if you agree as an organization to do that as early as possible. Of course, disagreement must serve the eing able to fall back on vision and values is useful to do ahead of time as well - this can influence close decisions. Finally, most businesses have a board or group that can handle things in some democratic or other way if agreement/disagreement needs a little help.
Authority, Responsibility, Capability
This is a related topic that I'm working on.
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