March 17, 2012

Decision–making critique: is it possible?

In our PMA we are suppose to justify the reasons behind our team's choice of decision tools and then criticize it. As far as the first part is concerned, I found it quite easy, in terms of academically supporting the decisions of my team, although for a particular tool there was a shortage of references. What I find particularly difficult is the critique of the whole thing. How are you suppose to criticize your work? You can do it to a certain extent, but when you have devoted so many hours and days on this thing, how can you be objective in your critisism?

And that coincides with another blog that I read, talking about the decision making for every PMA. And actually this is true! All team members have ownership of the work we presented, some to a greater extent and some others to a lesser. Then how can you be sure that your critisism is based on robust decision-making process?

Thus, providing objective critisism to your work, even if you didn't like something seems really hard to me. And it's even harder when you had almost no objectives to what was presented...


Leadership development is like physical exercise!

activityReading an article about leadership development I came across the folowing comparison, that leadership development is like physical exercise! Let me explain the rational behind it, which in fact I find very very successful and appropriate.

Nobody gets fit by watching other people talking about fitness and working-out, neither by reading books! You have to practice it, i.e. start working-out! Thus, the same idea can apply to leadership development. No matter how many books you read, how many courses attend or go in seminars and so on, the leadership ability will not be fully developed. You have to practice it! And the more you practice it, the better you become!

Just like physical excersise...


March 15, 2012

Risk analysis & Decision making

risk1Working on my pma and exploring the decision making tools, I'm becoming more aware that many of the decisions that companies are facing are full of risks and uncertainty. In other words, either it is about programmed or not decisions, the uncertainty may always be prevalent resulting in different kinds of risks.

That is one more reason why probably companies use the decision tools. Not only to make a robust decision, but also to take the risks into consideration and see the potential outcome. I think that in our in-module work, although the risk was there as a variable (market conditions, development of successful prototype, etc.) in the decision process, we didn't pay that much attention to it. However, in real life, the uncertainty and the risks associated with it need always to be considered carefully.


March 10, 2012

The 1st follower

Attending the TEDx Warwick today, I had the opportunity to watch a video about leadership which enhanced my understanding of leader-follower behaviour. That particular video shows a man dancing alone in a park where a lot of people are hanging out. At the beginning he is the only one who dances. After a while a second person joins him. As the video points out that's the time when the leader has a meaning! As the time goes by more and more people joining the funny dancing and almost everyone follows the leader.

Although it is very logical that when the first follower appears the act of leadership is actually happening, I haven't thought about it. Indeed, if someone is at a park and starts dancing everyone thinks he's being crazy. But when the second person joins in, and then the third and so on, the whole deed seems like a movement!

Despite that I didn't totally agree with the definition of leadership that says that someone is a leader when (s)he has followers, that particular video made me reconsider the value of followers. Of course leadership is an act that involves more than a leader-follower relationship, but when the first follower appears the leadership can start happening!

Here's the video and I suggest those who haven't seen it should give it a try! And who knows, maybe we all can start a movement and become leaders in just a second!

http://www.ted.com/talks/derek_sivers_how_to_start_a_movement.html


Different use of decision tools

Based on yesterday's presentations of all teams, I was really surprised by the uniqueness of each one. We all had available the same data, but yet we approached the decisions differently and end up with different results. If we consider this fact, it's amazing, but completely understandable.

Although I do know that there wasn't a right or wrong answer in that particular task, I found myself wondering about the decision-making process that we all used. The most surprising thing for me though was that all teams were able to justify and 'defend' their choices and the use of the decision tools, despite the fact that each team had different things.

Therefore, when we will have to deal with a real situation and more complex decisions what should we do? As Jeff said reality is much more difficult and companies use softwares to deal with these choices. The fact is that people are the ones who put the data in the computer so that the decision can be made. But always the biases lurking and you can never be 100% sure that you made the best decision. If you believe that you are deluding yourself and thus, the rest of the company...


Decision making using game theory

prisonerMost people who have studied economics are familiar with game theory and the prisoner's dilemma, as a very well-known example of it. According to this example, the outcome of this decision is that both prisoners should not betray each other so that a win-win situation can exist and be sentenced for less years.

During the RDM module we didn't mention this way of making decisions although is not very difficult to understand. In the literature there are many articles that discuss this subject, where using game theory can help organisations make decisions. However, despite the very clear 'instructions' that game theory provides and especially when someone knows about this example, in fact people tend to make the wrong decision!And why is that? To my mind this happens so that anyone can protect itself, as most of us would do in a similar situation.

And a very illustrative situation of this can be seen at the 'Bank Job' (an English TV game show). At the final stage of it, the two remaining contestants have to decide about a great deal of money. Both of them are given two briefcases, one full of money and one full of newspapers. The two players then open slightly the briefcases so that they can know where the money are and then give each other whatever briefcase they think. In order to both win the money though, they have to give each other the briefcases with the money, otherwise if they give the newspapers the money goes to previous players who didn't make it to the final. What happened actually is that out of greediness probably both players gave each other the wrong briefcase. Thus, as we can see, although they knew what they should do, they actually did the wrong.

Therefore, imagine what happens in companies and situations that where a win-win outcome is absolutely achievable, but instead they fool themselves out of protection or whatever else reason.


March 08, 2012

Poor decision–making

Decision-making techniques can apply to almost every major as we all have understood so far. Usually companies are the places which decision-making tools are used widely. Having that in mind, let's think about the economic crisis that started a few years ago.

We all expected that companies, and basically people working on them, have an understanding of how to make decisions that benefit various aspects. However, what happened in reality is that these people probably used bad decision making and poor judgment. If we add the parameter of ethics, meaning if they made ethical or unethical decisions, and the different kind of biases we can find one source of that economic crisis.

I know that many of you might disagree with my thinking about the economic crisis, and if I take into account my experience in economics I'm pretty sure that I will come up with multiple reasons for the crisis. But, since we keep acquiring new knowledge in this masters, it is worth considering other variables as well. Thus, I believe that apart from economic reasons that led to the crisis, a substantial element lies in the way that people make decisions and the biases behind it.


March 07, 2012

How much robustness?

decisionUp to this point I think that most of us have a pretty good understanding of the decision tools. But the most you get into these tools the most confused you get with some of them. For example, my team has decided to use certain tools and every time we thought that we were done with the decision we were wrong. Thus, all the time we keep adding things and make alterations.

So, imagine yourself having a job that involves making decisions on a regular basis. How can you overcome these problems, given the fact that in companies usually the teams are comprised of more people than our teams? And how can make sure that you use the correct decision tools for each situation?

To my mind, the whole module is trying to teach us how to make robust decisions and aquire an understanding about decision-making. But most of us have came to the conclusion that a 'robust' decision is far from reality. The only thing you can do is to try to change your understanding in the first place, so that you are less biased when you dealing with decision-making. And next, you can try to use different methods in order to compare the outcomes and minimise the risk of highly biased decision-making.


March 03, 2012

Decision–making process

Given our presentation for this module, we are given the opportunity to explore the tools for robust decision-making. So, working with the rest members of my team we came up with many ideas of what is the most appropriate tools for making a particular decision. And I have to admit that our initial ideas were pretty good!

However, the 'problem' arised when we needed to actually implement them! It is really hard to put in practice the theory. And to my mind, this is because of three main reasons:

1. We have so little experience on these methods. Since the decisions tools are not so easy to understand-at least some of them-I found it hard to use them for our problems.

2. We have little information about the situation. It is supposed that we can make any logical assumption that we want. But, in order to justufy some things you need not only one, but a series of assumptions which will represent the reality. Thus, you have to create a whole new reality based on hypotheses that you don't even know...

3. We either think too much or too little. And here the problem is that in some cases, some people may have previous knowledge on the subjects concerning the decisions, so they are used to perceive things in a broader perspective with many variables and data. Thus, it is natural that they have so many questions in their minds that need to be answered in order to make the decision. On the other hand, sometimes we have so little knowledge about something that we tend to simplify what we don't understand. And of course in this case, we know that our decision will be biased, but there's nothing we can do.

Concequently, I tend to think that in order to make this presentation happen, but thinking also how we can apply this later on our lives, it is better if we can balance all the above mentioned problems, so that the decision making process seems less than a burden as it looks like now!


Strategic leadership

strategyStrategic leadership seems important for all companies as it is about the strategy and vision and how the leader translates thems into every-day activities, so that people are connected with the organisation. The strategic leader needs to foresee and create the future for the company and prepare it as well for future challenges.

One important aspect of the strategic leadership is when it comes to take advantage of current opportinities which will make your company stand out the competition. And here comes the problem. Most companies will go for the same opportunities more or less, because it is what they know. For example, they may produce a by-product under their current portfolio.

Nevertheless, the challenge is to exploit or create an opportunity outside the comfort zone of the company. As strategic leadership includes the element of shaping the future, it seems very tempting to identify a new opportinity in the market that no other company has thought before. In fact, though, there are so little companies that try something completely new.

And the reason for this lies in the limitations and the resistance in change that most leaders face within the company. It is due to stakeholders that many innovative ideas fall apart, either because they don't understand or because they are afraid of change.


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