A632.2.3.RB_MilliganSteven

Sheena discusses four distinct methods for helping us improve our decision-making experiences.  The first of these is Cutting.  She discusses cutting our options down when making a decision.  She spoke about grocery stores cutting out their lowest selling items.  The store will have less waste and the customer is more likely to pick items when there are less options to choose from.  Cutting our choices down can often help us decide more easily.  Every year when black Friday hits I often see a vast number of items go on sale.  Usually the number of items is so vast that I get lost and am never able to make a decision.  I usually don't end up buying anything because I can't decide.  I can also say the same thing within our organization.  Every year we get tasked with submitting people for an incredibly large number of awards.  Putting together an award package is very time consuming and we often don't have anyone that necessarily matches the criteria for many of the awards within the Air Force.  It is much easier to put together a good competitive awards package if we cut down the number of awards we are required to submit for.  We would spend more time on the package and therefore be more likely to win the awards we are submitting for. 

She also discussed to concretize.  This is using our imagination to picture us making a decision.  She spoke about imagining all we could do with our retirement if we began saving now.  This helps us to make it more real.  When making difficult decisions I will often picture myself making that decision and what will happen after.  Doing this will also help me when I have to do something I don't like doing.  I imagine myself doing it and remind myself that it will come and go and life will go on.  Every year in the Air Force I am required to do a physical fitness assessment.  I have never struggled with it and always get either a 99 or 100 out of 100 points on the test.  For some reason, every year I get really nervous before taking it.  As it gets closer I picture myself taking the test and imagine myself doing well.  This helps me to realize that it is not as difficult or stressful as I think it's going to be.

She then suggested that we categorize items into smaller sections.  Book stores do this all the time.  When we walk into a book store there is usually a massive amount of books to choose from.  Usually, thousands of different books sit on the shelves.  The book store will categorize these into fiction, nonfiction, science fiction and fantasy, romance, religion and a number of other categories.  By doing this we can more easily find books we may be interested in.  Digital stores like amazon kindle will go a step further and offer you books based on your history of purchases.  I have read a number of books that amazon has offered me because of my history of choices.  If I wanted to find a new book I will often start looking in a section I may not normally read in.  If I am looking for options on war history I will find just a few books that interest me and add them to my wish list.  Amazon will then begin to make suggestions to me based on those books I added.  It saves me time in looking for books and tailors the search to books that I am more likely to purchase.  Doing this actually gives me significantly less choices then I would have if I were to just scroll through lists of books, but I am more likely to buy the book because I will see only a few that I am interested in.   

The final method she discussed is to condition for complexity.  I have experienced this many times.  This is the idea of slowly building from simple choices to more complex ones.  By doing this we are almost building a tolerance to making decisions.  When given too many choices all at once we can be overwhelmed.  When given choices that do not matter we can also be overwhelmed.  I think companies can benefit the most by giving us choices that matter.  Rather than having 50 colors to choose from when picking out the interior of my car give me 10 options with accents that match.  I will be less overwhelmed when choosing and less likely to just click the default options.  Motorola has a website called motomaker.com.  It is a way that you can custom design certain phones they sell.  They give you a number of options that let you custom design your own phone.  They start off letting you see some popular options.  Next they let you choose from 16, 32 or 64 gb phones.  After this you can choose from 3 different frame colors.  Next you can choose from 18 different back colors.  The colors are broken up into categories of material and finish.  By deciding on a material you like you are now breaking your options down.  They build on the complexity of options you have by starting you out with just a few and building on to this.  In the end you are able to see a 3d rendered model of your phone and decide if you like it.  It makes the process easy and fun.  You can choose from various options and pick the one you like the most.  This is a great example of building on this complexity. 

Sheena showed us some great ways to help us simplify decision-making in our lives and our work places.  It was good to see how we can implement them in both our personal decisions and how we can use them to improve performance in the work place.  

A632.1.4.RB_MilliganSteven

Decision Making Process - A632.1.4.RB_MilliganSteven

My decision-making processing generally varies depending on the problem at hand.  Sometimes it’s a simple decision.  Do we go to the park or to the pool? Do I want the chicken or fish? These are simple choices and the solution doesn't usually matter all that much.  However, decision making becomes more difficult as the problem becomes more complex.  Do we buy the $15k car or the $8k car that may need some work?  Do we want to be in debt or free of loans? Which of the two cars is more likely to have maintenance issues and will cost more in the long run? If possible I like to guess as little as possible.  When a problem is at hand I gather as much information about it as I can.  I look to the past, what is being done in the present and what will changes likely hold for the future.  It can be difficult to see the third, fourth and fifth order of effects that seemingly small decisions can cause.  When it comes to big business, small decisions now can mean millions of dollars in the future.  I'm sure Samsung did not realize that the manufacturer of the Samsung Galaxy Note 7 was going to produce a phone that would start blowing up on people.  There was no prior experience with this issue and no clue that the future would cost them in the hundreds of millions of dollars.

In the text they discuss Dynamic Programming.  The book states, "dynamic programming exploits the idea that even though a decision problem may involve a large number of stages, one need not enumerate and take expectancies of all possible contingent future realizations to arrive at an optimal decision policy"(Hoch & Kunreuther, 2001).  Essentially, we don't need to take every future outcome into account when making decisions.  Rather than knowing every possible outcome we look to an end state and work backwards.  This is called backward induction.  I was once given a puzzle to solve with a group of friends.  The goal was to figure out the correct password when given a series of short sentences that all connected in some way.  We discovered that we had been given three possible passwords.  When starting from the password first and working our way back through the connecting sentences we were able to quickly figure out which password connected with all the sentences and therefore which was correct.  The same can be done with decision-making.  Look at the end state of a decision we'd like to make.  Tonight, I will decide if I will run 6 days a week for 3 months straight or if I will run 3 days and week and lift weights three days a week.  I can look out three months and decide what kind of shape I would like to be in and work backwards from there.  Doing this will enable me to make the decision that is best for me.  In real life there will always be some level of variables when it comes to this, but this will help us to make better decisions more often.  This would impact my forward planning greatly because I would be looking at the possibilities that may occur when making a decision. 

A few years ago my mother had come to visit my wife, myself and our new born baby in Germany.  The day she needed to return we drove to drop her off at the train station so she could take the 2-hour train ride to the airport.  Upon arrival at the train station we learned the train had been significantly delayed.  This meant she would miss her next train stop and then would miss her flight.  We had to quickly leave and head for the airport ourselves.  It was at this point we realized we were low on gas and had not brought any food or diapers for our baby.  We were definitely not prepared for the more than 4 hours of travel it would take to get her to the airport and back.  From then on, when traveling, we always looked at the possible outcomes our road trips could have and did what we could to mitigate any possible problems we might run into.

Optimal dynamic decision analysis suggests that "individuals are no less astute at drawing proper statistical inferences from current events and learning from the past as they are planning for the future"(Hoch & Kunreuther, 2001).  This essentially means that we are not good at doing math in our head.  A considerable amount of work needs to be done in order to provide us with data we may need to make certain decisions.  When new data comes to light we may need to change our ideas about the world.  One example I have of this is based on Nissan and Ford cars.  When I first graduated from college we purchased a slightly used Nissan Sentra.  Less than one year later it broke down and could not be fixed.  Since then I have driven other Nissans and have decided I will never purchase one ever again.  Similarly, we were in need of a new car because of our Nissan breaking down.  We purchased a Ford Focus station wagon.  It was older than the Nissan with more miles.  It drove great, had lots of room for storage and zero issues during the time we owned it.  I then purchased another Ford Focus that has similarly been a great car with very little issues.  This experience I've had has pushed me toward purchasing another Ford when we move again back to the U.S.  The military will only ship one car for us so we will need another vehicle next time we move.  This data, or experiences we've had has caused me to avoid purchasing Nissans and lean towards purchasing Fords. 

As I learn new information about problems and the world I can make more informed decisions and will have a better idea as to what the future of those decisions may hold.  I am more likely to make a better decision about fixing my roof if I learn something about roof fixing.  The knowledge and expertise we have should play a significant role in the decision process.  I hope to get better at this as life goes on and rely on the experts around me that already know a lot more about the world than I do.

Bibliography

Hoch, S. J., & Kunreuther, H. C. (2001). Wharton on Making Decisions. Hoboken: John Wiley & Sons, Inc.