Difficult decision? – it’s a matter of principles

Sometimes the decision is easy. Logic applies. The decision and the outcome can be parameterised. Data is available. The data is complete and accurate, a tried and tested method for evaluation based on the data is available. Nothing weird or disruptive is happening in the environment, stakeholders are of one mind…

I did say ‘sometimes’!

What if it isn’t easy?

In 2013 I was in the market for a family ski-boat. I had narrowed the field down to a choice of two boats by being rigorous about some of the main selection criteria based on a lot of experience of the requirements for a ski-boat for inshore use. These fixed criteria were:

  • It had to be a RIB (Rigid Inflatable Boat) for stability and safety
  • 6.5m in length (longer and you pay extra at the marina!)
  • A ‘bench’ seat as safe seating for our two young boys
  • Enough power to pop a heavy skier out of the water (150 – 200HP)

So I was down to a choice between two boats:

  •  2012 commission
  • ‘Teak’ decking
  • £40k
  • 4 year warranty on boat and engine
  • ex demo + 1 owner for one season

And

  • 2010 commission
  • no ‘Teak’ decking
  • £30k
  • 2 year warranty on boat and engine
  • ex demo + 1 inexperienced owner

I could have assembled a group of experienced boat owners to discuss the pros and cons of each. Or I could have done a survey of some experts and asked them which they would pick and why. I could have asked a specialist boat engineer to survey the hull, fittings and engine.

I did none of these!

I did ask my wife. She said we should pick the one with the ‘teak’ decking as it looked nicer!

 

Time to be explicit about decision design principles…

So,  I resorted to some principles that I have developed over the years to procurement of technical assets in general and to boats in particular:

  1. Buy the highest specification model that you can afford
  2. Never pay to extend a warranty
  3. If there is a manufacturer’s warranty go for the longest available
  4. Boats age quickly – so buy the youngest you can
  5. Avoid second-hand assets that have any sign that they have been abused

When I applied those principles the choice was clear. If we could afford it, paying a 33% premium to get the newer boat was worth it to us.

I find principles really useful especially when they are drawn from diverse experiences. They can inject just enough logic and structure to temper our innate preference to disregard logic and data. They can help us to respond more objectively.

Principles are often not well thought through or written. Each principle should:

  • Be concise – covering a single point in each one
  • Provide guidance to the designer
  • Cover ‘How’ and ‘What’ (but not Where, When or Why)
  • Describe essential constraints and not restrict the design unnecessarily
  • Describe relevant best practice that should be considered

We use Business Decision Design® Case Studies on our training courses to explore different approaches to the various types of decision.

I hope you have a fun week.

Here’s the link to the outcome of applying those principles!

Nigel Stock

, , ,

No comments yet.

Leave a Reply