S ional ss ion Profe S the raiffa-howard award for organizational DeciSion Quality the Society of Deci introduction the raiffa-howarD a warD for organizational DeciSion Quality waS createD by the Society of DeciSion Profe ssionalS to recognize conSiS tent anD Su STAINED excellence in DeciSion making throughout an organization. the firSt The golden anniversary of Decision Analysis, 2014, raiffa-howarD awarD will be the first year the Society of Decision Professionals for organizational will present the Organizational Decision Quality (ODQ) award. DeciSion Quality Corporate, private or governmental organizations are eligible. This booklet contains background information on the innovations of Professors Raiffa and Howard, a description of the award’s purpose, information on the application 2014 process, along with the selection process and criteria. howarD RAIFFA ronalD howarD HARVARD univerSity StanforD univerSity 50 years of innovation history DeciSion analy SiS iS the DiSciPline incorPorating“ DeciSion theory, methoDology, anD Profe ssional Practice guiDing DeciSion-making unDer uncertainty. “ — r. HOWARD, 1983 while the theory unDerlying DeciSion analy SiS haS been DeveloPeD over hunDreDS of yearS, it waS the work of Profe ssor howarD raiffa of harvarD univer Sity anD Professor ronalD howarD of StanforD univer Sity beginning in 1964 that brought it into mainStream uSe by corPorationS anD government entitie S 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, negotiation, in statistical decision theory and competition. Howard defined and game theory 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 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 Economics prevent “predictable irrationality.” 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 Organizational Decision Quality— The contributions of Raiffa the culture, governance models, and Howard allowed the field processes, and competencies to grow and develop. Most early to allow an organization to applications focused on major achieve decision quality in capital expenditures or societal all of its decisions. investments. Then, with the advance of computing power, the field expanded to incorporate portfolio decisions. the raiffa-howard award for organizational DeciSion Quality How is this award different Who can apply? What is the schedule? from other DQ awards? Any corporate, private, The nomination process In the universe of Decision or governmental organization for 2014 has been completed Quality, awards that recognize that has demonstrated its and the evaluation process individuals and specific commitment to Organizational is to be completed in August. applications of decision analysis Decision Quality can apply. The 2014 award recipient will be already exist. The Raiffa-Howard announced in September, 2014. Award is different in that it The award cycle for 2015 will recognizes organizations that Who will decide? be announced after the first recipient is named. have made Decision Quality A set of five examiners a core competency across has been selected from 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 will recognize An organization with deep for the Raiffa-Howard Award. the first recipient with an elegant adoption of Decision Quality trophy at the 50th Anniversary will continue its commitment The Society will engage certain of Decision Analysis Gala to Decision Quality even as it committees within the Society on November 8, 2014 in undergoes successive changes to provide appropriate oversight San Francisco, California. in leadership. and minimize any conflicts of We expect to have Howard interest in the decision process. Raiffa and Ron Howard present Because this is an evaluation See the Examination section when the first award is given. 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) oDQ iS the aDoPtion of DQ aS a DeeP organizational comPetence an ORGANIZATION haS oDQ when moS t of the P ARTICIPantS in 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. DeciSion analy SiS 4 Sustained Enterprise “haS by now helPeD ODQ many thou SanDS of DeciSion-makerS, anD 3 Full ODQ haS createD many billionS of Dollar S of value for the economy through 2 Islands ODQ better bu Siness DeciSionS anD better government Policie S. “ 1 Project DQ — Jeff keiSler, Pre SiDent of the DeciSion analy SiS Society organizational Decision Quality MATURITY moDel 4 Sustained Enterprise ODQ In our DNA—survives leadership changes. 4 Sustained Enterprise 3 Full ODQ ODQ The full DM community understands and uses DQ and has adopted the language and culture of DQ in collaborative value creation. Strong support from Decision Professionals 3 Full ODQ is widely valued. 2 Islands of ODQ Islands ODQ Regular application of DQ for key Decision 2 Makers (DMs) in specific domains, e.g., drug development and project stage gate reviews. Strong support from Decision Professionals is valued by a few key DMs. Project DQ 1 1 Project DQ Periodic application of DQ to specific opportunities and decision problems. award Process aSSeSSment baSeD on Six maJor categorie S Capability OF DECISION STAFF Understanding AND Effective Use Understanding BY CONTENT EXPERTS BY DECISION MAKERS AND IMPLEMENTERS Culture O F PROACTIVE USE OF DQ WITH A FOCUS ON EVIDENCE OF Decision Processes Value Creation Value AND Tools Creation FROM ODQ award Process eligibility, aPPlication, anD e xamination Eligibility, Application > Recipients of the award will > They cannot be current be able to use the award or recent employees, direct > 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. the current year may opt to spending a minimum of receive ODQ feedback. three days evaluating each > 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 is comprised of leading Board of Directors of the SDP. > All organizations that practitioners in the Society apply and meet the criteria of Decision Professionals. will receive the award. It may be awarded more or > The specific panel for the less frequently than annually. examination of an organization All recipients are invited will consist of five examiners to speak at the annual who are selected to be celebration of the Society of objective with no conflicts Decision Professionals (SDP). of interest. the BOARD of examiner S award criteria will be u Sing the following criteria to evaluate canDiD ateS DQ culture • Our people, the processes, and the culture are aligned and mutually reinforce organizational DQ. • We recognize and encourage DQ. We do not reward in a way that discourages good decisions—e.g., we share the financial outcomes and reinforce the quality of decision making by promoting good decision makers within the organization. • We avoid losing value creation opportunities as much as avoid losing real money. • We link DQ to excellence in execution to create value. • DQ has become a language and a lens for looking at problems and opportunities. • We take a whole system perspective. We realize the system is limited by its weakest part. • We constantly