We can learn about how we work from observing and reflecting on our decision behaviours be it in work or at home. Here is a cut-down version of one of our Business Decision Design® training course case studies.
I recently had to buy two rear tyres for our car. I have two young children so I have safety on my mind more than cost. However, I do like to shop around to make sure I get a good deal. Six months ago I replaced the two front tyres. I like the idea of supporting local businesses, especially independent ones rather than the national chains. I got a good deal from a local tyre firm on the front tyres. This time they cannot get hold of the exact same tyres and the cost per tyre has gone up by £9 each (up 7% on last time).
- Correct new tyres on rear wheels with minimum cost and effort
- New tyres on the rear wheels (functional)
- Same make & model of tyre preferred or nearest match (safety)
- Need to comply with load and speed ratings set out by the manufacturer (safety)
- Same or better price than last time (financial)
- Limited distance to travel to get them fitted
- Need to complete the task soon
- Our car has pressure sensors in the tyre valves which can be damaged if the tyre fitters don’t have the right equipment
- Conversation with local preferred supplier on availability and cost
- Online sources of tyres (for price comparison and availability of matching tyres)
- Online sources of reference data [car model’s required speed and load rating]
- Online commerce providers
- Tyre search for original brand / model
- Cost comparisons
- Short-list options
- Select an option by considering selected and weighted decision criteria
- Must be same brand
- Can be updated model
- Must be lowest cost
- Must be local fit (<5 miles)
- Must be done within 3 weeks
Type of decision?
- Investment decision
- Infrequent decision (i.e. once a year or less)
- Cost driven
- Commodity purchase focus on price and availability not relationship(s)
How much effort was it worth?
- In cash terms I was looking to save £18 or more and ended up saving £46 (17%) compared to my default supplier’s quote
- Which depending on what daily rate you use buys anything from 20 minutes to a day’s worth of effort
- I spent ~ an hour looking at this but not at the cost of paid work.
How could I have improved the decision-making process?
There was an option to procure tyres only and I could then have had them fitted by my local preferred fitter – it would have taken more time to explore the cost benefit of this approach.
I could have asked some other people how they go about making this type of decision to get some fresh ideas on what appears to be a mundane process.
How do you go about this?
The full Case Study explores additional aspects of Business Decision Design® beyond the above two points but this gives you a flavour of one type of analysis for this type of decision.
I hope you have an enjoyable week.