SOCIETY OF DECISION PROFESSIONALS FOR ORGANIZATIONAL DECISION QUALITY FOR ORGANIZATIONAL DECISION QUALITY The Award Raiffa-Howard The Award Raiffa-Howard The Raiffa-HowardIntroduction Award RAIFFA-HOWARD AWARD The golden anniversary of Decision Analysis, 2014,

FOR ORGANIZATIONAL DECISION QUALITY FOR ORGANIZATIONAL marked the inaugural year of the Organizational Decision Quality DECISION QUALITY (ODQ) award, created by the Society of Decision Professionals.

This booklet contains background information on the THE RAIFFA-HOWARD AWARD FOR innovations of Professors Raiffa and Howard, a description of ORGANIZATIONAL DECISION QUALITY WAS CREATED BY the award’s purpose, information on the application process, THE SOCIETY OF DECISION PROFESSIONALS TO RECOGNIZE CONSISTENT AND SUSTAINED EXCELLENCE along with the selection process and criteria. Corporate, IN DECISION MAKING THROUGHOUT AN ORGANIZATION. private or governmental organizations are eligible. HOWARD RAIFFA RONALD HOWARD WHILE THE THEORY UNDERLYING DECISION ANALYSIS HAS BEEN DEVELOPED OVER HUNDREDS

HARVARD UNIVERSITY STANFORD UNIVERSITY OF YEARS, IT WAS THE WORK OF PROFESSOR HOWARD RAIFFA OF AND PROFESSOR RONALD HOWARD OF STANFORD UNIVERSITY BEGINNING IN 1964 THAT BROUGHT IT INTO MAINSTREAM USE BY CORPORATIONS AND GOVERNMENT ENTITIES FOR MAKING COMPLEX AND IMPORTANT DECISIONS.

Decision analysis emerged Raiffa took the field into as a distinct academic field multiparty decisions— in 1964, building on developments collaboration, , in statistical and competition. Howard defined and by Raiffa the engineering approach to and systems engineering and solving large complex decision dynamic probabilistic systems problems. Behavioral Decision by Howard. In that year, Raiffa Science generated insight about Over 50 Years of began teaching the first university how our human nature is likely to course in decision analysis within lead us astray and how to the Department of prevent “predictable irrationality.” Innovation History at Harvard and began preparing The quality movement material for his 1968 book, inspired the field to develop Decision Analysis. Also in 1964, Decision Quality by including but independently, Howard the organizational practices conducted the first professional to achieve alignment and application of the field he called commitment to action. “decision analysis,” which he described in his 1966 paper, Over the last two decades, “Decision Analysis: Applied the field has moved from focusing Decision Theory.” on specific decisions to achieving DECISION ANALYSIS IS THE DISCIPLINE Organizational Decision Quality— The contributions of Raiffa the culture, governance models, INCORPORATING DECISION THEORY, METHODOLOGY, and Howard allowed the field processes, and competencies “ to grow and develop. Most early to allow an organization to AND PROFESSIONAL PRACTICE GUIDING applications focused on major achieve decision quality in DECISION-MAKING UNDER . capital expenditures or societal all of its decisions. investments. Then, with the advance of computing power, “ the field expanded to incorporate — R. HOWARD, 1983 portfolio decisions. How is this award different Who can apply? What is the schedule? from other DQ awards? Any corporate, private, After the current nomination In the universe of Decision or governmental organization process has been completed, Quality, awards that recognize that has demonstrated its the evaluation process takes individuals and specific commitment to Organizational place. The award recipient(s) applications of decision analysis Decision Quality can apply. is scheduled to be announced already exist. The Raiffa-Howard before April of the current award Award is different in that it cycle. The next award cycle will recognizes organizations that Who will decide? be announced after the naming the current recipient(s). The Raiffa-Howard Award have made Decision Quality A set of five examiners a core competency across has been selected from FOR ORGANIZATIONAL DECISION QUALITY the organization—this is the the Board of Examiners organization that believes How will recipients of the Society of Decision be recognized? the principles of Decision Professionals to evaluate Quality are at the core of its whether an organization The Society of Decision decision making processes. applying meets the standards Professionals recognize An organization with deep for the Raiffa-Howard Award. the award recipient(s) with adoption of Decision Quality an elegant trophy during the will continue its commitment The Society will engage certain Society’s Annual Meeting—the to Decision Quality even as it committees within the Society DAAG Conference, traditionally undergoes successive changes to provide appropriate oversight held in April of each calendar in leadership. and minimize any conflicts of year. interest in the decision process. Because this is an evaluation See the Examination section of achievement in the adoption for more information. of ODQ, it is possible that more than one organization could receive this award in any calendar year. Attaining Organizational Decision Quality (ODQ) AN ORGANIZATION HAS ODQ WHEN MOST OF THE PARTICIPANTS IN ODQ IS THE ADOPTION OF DQ AS A DEEP ORGANIZATIONAL COMPETENCE DECISION MAKING CAN SAY THAT IT …

Consistently makes high quality decisions; it is second nature.

Frames these decisions appropriately. Makes its decisions with clear “line of sight” to value.

Understands its decision roles and has the right skills.

Uses efficient decision processes routinely.

Appropriately addresses each decision situation with the right balance of content, analytic rigor, and facilitation to reach a timely quality decision.

Is aligned around Decision Quality.

Has a common language for and understanding of Decision Quality—including clarity of value and value metrics. Has a shared desire for Decision Quality and walks the talk.

Continuously learns and improves Decision Quality. Organizational Decision Quality MATURITY MODEL

4 Sustained Enterprise ODQ

In our DNA—survives leadership changes.

DECISION ANALYSIS 4 Sustained Enterprise 3 Full ODQ HAS BY NOW HELPED ODQ The full DM community understands and uses DQ and has adopted “ the language and culture of DQ in MANY THOUSANDS OF collaborative value creation. Strong DECISION-MAKERS, AND support from Decision Professionals 3 Full ODQ is widely valued. HAS CREATED MANY BILLIONS OF DOLLARS 2 Islands of ODQ OF VALUE FOR THE Islands ODQ Regular application of DQ for key Decision ECONOMY THROUGH 2 Makers (DMs) in specific domains, e.g., drug development and project stage gate reviews. BETTER BUSINESS Strong support from Decision Professionals DECISIONS AND BETTER is valued by a few key DMs. GOVERNMENT POLICIES. Project DQ 1 1 Project DQ “ Periodic application of DQ to specific opportunities — JEFF KEISLER, PRESIDENT OF and decision problems. THE DECISION ANALYSIS SOCIETY Award Process Award Process ASSESSMENT BASED ON SIX MAJOR CATEGORIES ELIGIBILITY, APPLICATION, AND EXAMINATION

Capability Eligibility, Application >  Recipients of the award will >  They cannot be current be able to use the award or recent employees, direct OF DECISION STAFF >  Examiners will evaluate for promotional purposes. competitors, or suppliers, applicants on the Six Organizations will need to be nor can they have a significant Elements of Decision Quality recertified every five years. financial interest in the to determine if they meet the potential recipient. guidelines for demonstrating >  Organizations that apply Organizational Decision and are not recognized in >  Examiners commit to Quality. Understanding AND Effective Use Understanding BY CONTENT EXPERTS the current year may opt to spending a minimum of receive ODQ feedback. three days evaluating each BY DECISION MAKERS AND IMPLEMENTERS >  The award criteria are applicant prior to submitting stated in the following pages a recommendation. for organizations to get a sense of whether they are Examination >  Final determination for ready to apply. >  The Board of Examiners the award is made by the Culture O F PROACTIVE USE OF is comprised of leading Board of Directors of the SDP. >  All organizations that DQ WITH A FOCUS ON EVIDENCE OF Decision Processes practitioners in the Society apply and meet the criteria of Decision Professionals. Value Creation AND Tools will receive the award. Value It may be awarded more or >  The specific panel for the less frequently than annually. examination of an organization Creation All recipients are invited will consist of five examiners to speak at the annual FROM who are selected to be celebration of the Society of objective with no conflicts Decision Professionals (SDP). ODQ of interest. Award Criteria DECISION MAKERS’ CAPABILITY AND COMMITMENT THE BOARD OF EXAMINERS WILL BE USING THE FOLLOWING CRITERIA TO EVALUATE CANDIDATES

DQ CULTURE • Our people, the processes, and the culture are aligned Our Decision Makers: and mutually reinforce organizational DQ.

• We recognize and encourage DQ. We do not reward in a way • Proactively search for opportunities and set the decision agenda that discourages good decisions—e.g., we share the financial • Demand insights and DQ support outcomes and reinforce the quality of decision making by promoting good decision makers within the organization. • Understand DQ concepts and decision traps

• We avoid losing value creation opportunities • Use the language and concepts of DQ effectively as much as avoid losing real money. • Triage decision situations and select the • We link DQ to excellence in execution to create value. appropriate process and decision staff

• DQ has become a language and a lens for • Are personally skilled in applying DQ to decisions looking at problems and opportunities. that are worth a couple of meetings and deliberation, but do not require professional decision staff • We take a whole system perspective. We realize the system is limited by its weakest part. • Challenge poor decision practices

• We constantly evaluate our organizational DQ to • Are committed to retaining and enhancing identify gaps and improve our organizational DQ. the organization’s DQ capability AWARD CRITERIA AWARD CRITERIA AWARD • Our leadership sees DQ as one of the lowest • Continuously strive to improve their decision making skills cost investments with a tremendous ROI. • Are clear about their DQ roles and responsibilities • DQ skills are a central part of our leadership development program. DECISION SUPPORT STAFF DECISION PROCESSES AND TOOLS

Our Decision Support Staff: Our Decision Processes:

• Have expertise • Are designed to create value by achieving DQ

»» Have the know-how and tools to deal • Involve the right people in the right way to gain with uncertainty and dynamics alignment around the most value creating decision » Elicit domain expertise authentically and tractably » • Meet the needs—timely, fast, and as simple as possible—but no simpler • Are trusted • Are accepted as the way we meet decision challenges »» Can interact effectively with C-level decision makers »» Have the confidence of the decision makers when supporting difficult strategic decisions Our Tools: »» Add significant value to framing and alternative generation • Are selected for the specific need—we are not • Can support decisions in an efficient and timely fashion tool focused, we are decision focused • Are many—e.g., multi-attribute approaches to societal »» Structure analyses effectively to build project team learning about the decision during the decision making process decisions, optimal resource allocation, extensive models for complex socio-tech decision problems, etc. »» Provide discipline to the decision making process, AWARD CRITERIA AWARD while leaving business judgments to project • We access tools from internal and/or external sources CRITERIA AWARD team leadership and decision makers »» Strike the right balance between speed of process and depth of insight

• Continue to learn and enhance their DQ skills RESULTS FROM ORGANIZATIONAL DQ

AWARD CRITERIA • • • We CanDemonstratetheBenefitsofDQ: We askourselves:Didwe… reviewing from DQandlearning results We haveaneffective look-backprocess for sound evidence—ofthebenefitfrom DQ We haveevidence—both anecdotalandstatistically » » » » » » » » » » » » » » » » » » » » focus ontherightdecisions(orissues,opportunitiesor challenges)? make inclear and simplelanguage? make acompellingcasefor thedecisionswe the mostvaluecreating actions? reach timelyanddurablecommitmentsto portfolio analysis,dynamic trees, etc.? apply theappropriate analyticmethodology— of content,analyticrigor, andfacilitation? address thedecisionsituationwithrightbalance are naturaltohumanbehavior? avoid decisiontrapsanddistortionsthat elicit thejudgmentofknowledgeableexperts? find relevant andtrustworthy sources of factual, reliable information? generate creative, compelling,actionablealternatives? frame decisionsappropriately?

DESIGN AND CREATIVE BY COURTESY ASYLUM STUDIOS DESIGN THINKING + DECISION QUALITY d of Examiners Members as well as Criteria, Eligibility, and Schedule of events are subject to change without notice. * Contact theSociety ofDecisionProfessionals formostupdatedinformation. Boar Terrence Karner Eric Johnson James Felli Len Falsone Jim Driscoll Terry Bresnick Reidar Bratvold Warwick Blyth Phil Beccue Barabba Vincent Jay Andersen Warner North Larry Neal Michael Menke Paul McNutt James Matheson David Leonhardi Leaf-Herrmann William Frank Koch Jack Kloeber William Klimack Jeffrey Keisler Ralph Keeney BOARD OFEXAMINERS Sandra Wrobel Jan PaulvanDriel Stephen Uhl Jeffrey Stonebraker Robert Stibolt Carl Spetzler David Skinner Mark Seidler Harry Saunders Gregory Parnell Daniel Owen www.decisionprofessionals.com

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