EUROPEAN
JOURNAL
OF OPERATIONAL
RESEARCH
ELSEVIER
European Joumal of Operational Research 92 (1996) 537-549
Value-focused thinking: Identifying decision opportunities
and creating alternatives
Ralph L, Keeney
University of Southern California, Los Angeles, CA 90089-0021, USA
Abstract
Conventional approaches to decisionmaking focus on alternatives. However, alternatives are relevant only because they
are means to achieve values. Therefore, thinking about decision situations should begin with values. Value-focused thinking
describes and illustrates concepts and procedures for creating better alternatives for your decision problems, identifying
decision opportunities more appealing than the decision problems that confront you, and articulating and using your
fundamental values to guide and integrate your decisionmaking activities. The ideas are relevant to your personal decisions
and to the decision situations of organizations. The concepts and procedures are illustrated by an application at British
Columbia Hydro and short descriptions of several other applications.
Keywords: Values; Objectives; Value-focused thinking; Alternatives; Decision opportunities
1. Introduction
Values are fundamental to all that we do; and
thus, values should be the driving force for our
decisionmaking. They should be the basis for the
time and effort we spend thinking about decisions.
But this is not the way it is.
Instead, decisionmaking usually focuses on the
choice among alternatives. Decision problems are
thrust upon us b y the actions o f others: competitors,
customers, govemment, and stakeholders; or by circumstances: recessions and natural disasters. Faced
with a decision problem, the so-called solving begins. Typically, the decisionmaker concentrates first
on alternatives and only afterwards addresses the
objectives or criteria to evaluate the altematives. [
refer to this standard problem-solving approach as
alternative-focused thinking.
Focusing on alternatives is a limited way to think
through decision situations. It is reactive, not proac-
five. If you wish to be the master o f your decisionmaking, it makes sense to have more control over the
decision situations you face. You do not control
decision situations that you approach through alternative-focused thinking. This standard mode of
thinking is backwards, because it puts identifying
alternatives before articulating values.
It is values that are fundamentally important in
any decision situation. Alternatives are relevant only
because they are means to achieve your values. Thus
your thinking should focus first on values and later
on alternatives that might achieve them. Naturally
there should be iteration between articulating values
and creating alternatives but the principle is ' v a l u e s
first'. I refer to this manner o f thinking as valuefoCused thinking. This paper is an overview of the
main concepts and procedures of value-focused
thinking. Full details are in K e e n e y (1992).
Value-focused thinking is a w a y to channel a
critical resource - hard thinking - to lead to better
0377-2217/96/$15.00 © 1996 Elsevier Science B.V. All fights reserved
PII S 0377-2217(96)00004-5
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R.L. Keeney / European Journal of Operational Research 92 (1996) 537-549
decisions. Better decisions come about both because
of insights provided by the thinking and because of
specific procedures that view decisions through
' value-focused' glasses. A shift to this way of thinking about decisions can significantly improve decisionmaking because values guide not only the creation of better alternatives but the identification of
better decision situations. These better decision situations, which you create for yourself, should be
thought of as decision opportunities, rather than as
decision problems.
The purpose and thought processes of valuefocused thinking are different from those of alternafive-focused thinking. Alternative-focused thinking is
designed to solve decision problems. Value-focused
thinking is designed to identify desirable decision
opportunities and create alternatives. Therefore, the
value-focused paradigm for addressing decisions is
different from the standard alternative-focused
paradigm in three important ways. First, significant
effort is allocated to make values explicit. Logical
and systematic concepts are used to qualitatively
identify and structure the values appropriate for a
decision situation. Second, this articulation of values
in decision situations comes before other activities.
Third, the articulated values are explicitly used to
identify decision opportunities and to create alternafives.
2. Making values explicit
Decisionmakers recognize the need for objectives
as a key step in developing strategic approaches
(e.g., Pearce and Robinson, 1985). However, simply
listing objectives is shallow. There is a need for
greater depth, clear structure, and a sound conceptual
base in developing objectives for strategic decision
contexts. On the other hand, identifying and structuring objectives are difficult tasks: ends are often
confused with means, objectives are often confused
with targets or constraints or even alternatives, and
the relationships between different objectives are not
specified. Clear objectives are very useful, but how
should they be developed? The process requires the
use of significant creativity in discussions with decisiomnakers and individuals concerned about the decision.
Decisions often are characterized by multiple objectives. Each objective is a statement of something
that one wants to achieve in that decision context. To
state an objective explicitly requires three features:
the decision context, an object, and a direction of
preference. For example, one objective of a forest
products company is to 'minimize environmental
impacts'. With this objective, the decision context is
harvesting natural resources, the object is environmental impact, and less impact is preferred to more.
If the direction of preference is not monotonic, so
minimize or maximize are not appropriate, the general term optimize can be used. When a quantitative
objective function is constructed for this objective,
the meaning of optimize is made specific for that
objective.
We distinguish between 'fundamental objectives'
and 'means objectives'. Fundamental objectives concem the ends that decisionmakers value in a specific
decision context; means objectives are methods to
achieve ends. It is important to recognize that ends
and means are not absolute concepts. They are context dependent. If your decision context concems
investing your available funds for retirement, to maximize the amount of money available at the beginning of retirement is a fundamental objective. In
your decision context of having a good life during
your retirement years, maximizing the amount of
money available at the beginning of retirement is a
means objective.
Fundamental objectives for strategic decisions,
meaning the broadest class of decisions facing an
organization, are defined as strategic objectives. The
strategic objectives provide common guidance for all
decisions in an organization and form the basis for
more detailed fundamental objectives appropriate for
specific decisions.
3. British Columbia Hydro
British Columbia Hydro and Power Authority (BC
Hydro) is a large hydroelectric-based, publicly-owned
electric utility supplying power to over ninety percent of the British Columbia population. As a major
corporation with billions of dollars in annual sales,
BC Hydro faces many complex strategic decisions in
coming decades. They must develop additional re-
R.L. Keeney/ European Journal of Operational Research 92 (1996) 537-549
sources to generate electricity; site and construct new
transmission lines; negotiate international power
agreements; mitigate environmental effects; and
communicate with the public and interest groups
about policies for addressing actual or perceived
public risks such as electromagnetic fields and global
warming. Such decisions should be made using quality information and sound logic in a coordinated
manner that can be clearly justified and openly communicated to stakeholders.
Decision making is distributed at BC Hydro. Responsibilities for dams and dam safety lie in one
department, responsibilities for high voltage transmission lines lie in a second department, responsibilities for pricing policies lie in a third department, and
responsibilities for electricity exports to the United
States lie in other departments. To facilitate the
desired coordination of such decisions, L,I. Bell, the
chairman and CEO of BC Hydro in 1988i appointed
Ken Peterson as BC Hydro's Director of Planning.
Peterson's assignment was to make BC Hydro the
best planning electric utility in North America. To
help fulfill this responsibility, Peterson created a
Planning Committee composed of senior managers
from departments with major decision making roles
at BC Hydro.
BC Hydro has a published mission statement with
broad goals, but these are very general, as is the case
in most corporations. Peterson realized that they
were too general to provide guidance for coordinating decisions. Subsequently, Tim McDaniels of the
University of British Columbia and I began working
with Peterson and other members of the Planning
Committee to identify, structure, and quantify BC
Hydro's strategic objectives (see Keeney and McDaniels, 1992).
We met separately with three members of the
Planning Committee: Victor de Buen (Senior Systems Studies Engineer), Zak E1-Ramly (Manager,
Policy Development), and Ken Peterson and probed
their values. We used two devices to insure that the
Planning Committee members would think o f objectives not only in the context of business as usual but
also for situations that might not be so usual. One
was to inquire about particularly undesirable alternafives and then ask why they were so undesirable or
what could have gone wrong to make them undesirable. The other was to ask about particularly undesir-
539
able consequences, such as the convening of a governmental inquiry to investigate BC Hydro, and then
pursue grounds that could have led to such a situation. Both of these devices helped identify objectives
that might have been omitted if we had focused only
on business as usual.
To illustrate the type of discussion that occurs in
identifying objectives, I will summarize a small portion of an early meeting I had with Ken Peterson.
Early in the discussion about economics, an obvious
area of concern to BC Hydro, Peterson stated that
one objective was to have efficient and fair pricing. I
asked, " W h a t does efficient mean?" He responded
that the pricing should reflect the social cost of
resources. Then I asked, " W h a t does social cost
mean?" After some consideration, he concluded it
was a measure of the usefulness of the resources for
other purposes and that it included opportunity cost.
To get a better feeling for efficiency, I asked, " H o w
might you measure efficient pricing?" Peterson's
response was in terms of cost per kilowatt-hour.
Next I asked the meaning of fair pricing. Peterson
responded that this pertained to cost sharing among
customers based on the value added to society b y
those customers. He mentioned that this concern was
important to the regulators in British Columbia.
I backed up a step and asked why pricing, be it
efficient or fair, was important. Part of the response
was that it led to defensible and credible resource
allocation. I asked why that was important. It was
important to several stakeholders, including regulators, government agencies, and customers. But it was
also important because pricing is the means that
provides the fundamental good (electricity) for end
uses. Also, efficient and fair pricing leads customers
to make decisions about energy in a socially responsible manner. That is to say, it leads them to select
an appropriate amount of conservation.
Pricing policy is also important because BC Hydro contributes cash to the provincial government. I
asked, " W h y is this important?" Peterson's response was that it would, among other things, lead to
a good relationship between the company and the
government and that it would also contribute to
lowering public debt.
In discussions like this one, I uncovered a wide
range of objectives not previously mentioned. The
process aims to get deeper than 'motherhood and
540
RJ~. Keeney / European Journal of Operational Research 92 (1996) 537-549
apple pie' objectives, which everyone can agree to,
but which provide little strategic guidance.
The discussions with de Buen, E1-Ramly, and
Peterson each resulted in two preliminary products.
One was a strategic objectives hierarchy and the
other was a means-ends objectives network that related the strategic objectives to all other objectives
identified in our discussions. Three subsequent discussions with Peterson reviewed the ideas presented
by de Buen and E1-Ramly, pursued the logic of
related objectives, developed measures for the strategic objectives, and prioritized them. The major purpose was to establish a logical and understandable
set of strategic objectives for BC Hydro.
Table 1 presents Peterson's revised strategic objectives hierarchy for BC Hydro, and Fig. 1 presents
his objectives network. In the objectives network, the
strategic objectives hierarchy is presented using abbreviated terms in the column in the middle of the
figure. The interrelationships between corresponding
objectives are also illustrated in the figure. A n arrow
from one objective to another indicates that achieving the former has an influence on achieving the
latter.
Consider the following subtle but potentially important distinctions that can be identified by an
in-depth discussion of objectives. For many organizations, one strategic objective is to 'minimize environmental impact'. Peterson's strategic environmental objective was to 'act consistently with the public's
environmental values'. This objective indicates a
concern for both the possible environmental impacts
and the relative values attached to those impacts by
the public. Peterson also mentioned objectives regarding both corporate image and public service in
the discussions. To be recognized as a public service-oriented company might enhance the c o m p a n y ' s
image, but these are not identical. Also, being recognized is not the same thing as being a public
service-oriented company. After careful consideration, Peterson concluded that BC Hydro was a public
service-oriented company and the strategic objective
was to be recognized as such.
Our initial discussions identified many environmental objectives concerning flora, fauna, and land
use. When Peterson and I thought about appropriate
ways to measure these environmental objectives, it
became clear that the loss of environmental re-
Table 1
Peterson's strategic objectives hierarchy for BC Hydro
1. Maximize conlribution to economic development.
1.1. Minimizecost of electricity use.
1.2. Maximize funds transferred to government.
1.3, Minimize economic implications of resource losses.
2. Act consistentlywith the public's environmental values.
2.1. About local environmental impacts.
2.1.1. To flora.
2.1.2. To fauna.
2.1.3. To wildlife ecosystems.
2.1.4. To limit recreational use.
2.1.5. To aesthetics.
2.2. About global impacts.
3. Minimize detrimental health and safety impacts.
3.1. To the public.
3.1.1. Mortality.
3.1.2. Morbidity.
3.2. To employees.
3.2.1. Mortality.
3.2.2. Morbidity.
4. Promote equitable business arrangements.
4.1. Equitable pricing to different customers.
4.2. Equitable compensation for concentrated local impacts.
5. Maximize quality of service.
5.1. To small customers.
5.1.1. Minimize outages.
5.1.2. Minimize duration of outages.
5.2. To large customers.
5.2.1. Minimize outages.
5.2.2. Minimize duration of outages.
5.3. Improvenew service.
5.4. Improveresponse to telephone inquiries.
6. Be recognizedas public-service oriented.
sources such as forests or fisheries had economic as
well as environmental implications. This led t o the
specification of the economic objective addressing
resource losses. The environmental and social impacts of resource losses remained accounted for
within the environmental objectives.
The next task was to identify which strategic
objectives are the most important and why. To do
this logically, we selected measures to indicate
achievement in terms of the various objectives. Then
we identified ranges of possible impacts in terms of
these measures. This provided the basis to quantify
Peterson's values by assessing a multiattribute utility
541
R.L. Keeney / European Journal of Operational Research 92 (1996) 537-549
two other main objectives are also relatively insignificant. Global environmental impact accounts for only
7% of the environmental impact and is less important than any of the five separate local environmental
impact categories. Regarding service quality, the impacts of outages account for 94% of the concern,
with the impacts on new service and inquiries together accounting for the other 6%. Therefore, 95%
of the relevant achievement of objectives has to do
function over the strategic objectives (see Keeney,
1988). From this, we calculated the relative importance of the ranges of impacts for the objectives. The
implications of Peterson's value judgments for BC
Hydro, shown in Table 2, indicate that the major
strategic objectives concern economics, the environment, health and safety, and service quality. The
combined weight on equity and public-service recognition, given their ranges, is less then 2%. Parts of
financial performance
I interest c°verage I
economic development
I dsbt-equ~io
I
2~
11 costs
I govemment
~n=t°
I/ /
I::::~
~I resource losses I
I
I
note: an arrow means "influences"
quality of lite in
British Columbia
resources
development
I p.mc
I
I employee
I
I
stempio'er I
l
=smp 'ns I
ecosystems I
equity
I
complaints
"•regulatory
I++l
health and safety
I
aesthetics
I
pubr¢ debt
t
environmental impact
flora
I
I
,..~mr
public environmental
values
recreation
I
government relations
individual energy
decisionmaking
fauna
of
fundamental
,•producti
on9oods
IPr~+n~
I
po~ in,pare I
,, a+o+ten=a e
I
global impacts I
quality ol service
t
technological
innovation
resource
llarge customers I
lsme" customers
I
corporate citizen
I ontribution
to charities
I public access
to inlormation
I
]
I account for public
values
I
public participation
J
I,
public support
coterie image
learn
I public attitudes
public
understanding
:lperceived dsk
I risk communication I
I publ+ values
I
public
• education
Fig. 1. A means-ends objectives network for British Columbia Hydro (strategic objectives are listed in the boldface box).
542
R.L. Keeney/ EuropeanJournal of OperationalResearch92 (1996)537-549
Table 2
Priorities for BC Hydro's strategic objectives
Objective
1.1. Levelizedcost
1.2. Annualgovernmentdividend
1.3. Resourcecost
2.1.1. Flora
2.1.2. Fauna
2.1.3. Wilderness
2.1.4. Recreation
2.1.5. Aesthetic
2.2. Globalimpact
3.1. Publichealth and safety
3.2. Employeehealth and safety
4.1. Equitablecompensation
4.2. Equitablepricing
5.1. Smallcustomerservice
5.2. Largecustomerservice
5.3. New customerservice
5.4. Inquiryresponse
6.
Public-servicerecognition
Percent
weight
25.3
5.3
8.8
2.3
4.6
9.3
4.6
2.3
1.9
4.5
4.5
0.8
0.4
11.1
12.5
1.0
0.5
0.4
Rank
1
6
5
11
7
4
7
11
13
9
9
15
17
3
2
14
16
17
with the twelve objectives addressing economic impacts, local environmental impacts, health and safety,
and outages.
The value assessment comprised several separate
tasks: listing the objectives, distinguishing between
means objectives and fundamental objectives, identifying measures for the objectives, and prioritizing
them. The results of each task helped us to articulate
company values and use these to suggest decision
opportunities that might be worthwhile to pursue.
The following examples are illustrative of decision
opportunities that we generated by value-focused
thinking.
1. Investigate implications of resource losses on
economic activity. The prioritized objectives indicated that the reduction in economic activity due to
resource losses, such as the loss of productive forests
or fisheries, was potentially significant. This suggests that it would be useful to examine the relationship between resource losses and reduced economic
activity, because the 8.8% weight in Table 2 pertained to a $20 million range for economic resources
lost.
2. Determine public environmental values. This
decision opportunity involves assessing the public's
values about possible environmental impacts and
their value tradeoffs between economic implications
and those environmental impacts. One way to obtain
the public's values would be to appoint a select
committee of individuals representing the public and
assess their values. Another way would be to assess
values from various public stakeholder groups and
combine these in some fashion. The intent would be
to develop a logical measure to appraise the values
that the public attaches to environmental losses that
might result from different alternatives in various
decisions.
3. Develop a database on public and employee
health and safety. It should not be too difficult to
create a statistical database for all health and safety
implications related to BC Hydro equipment or activities. Using this to promote thinking, one could
generate and compare alternative actions that might
reduce the number of fatalities, injuries, and illnesses
attributable to BC Hydro operations. It might also
suggest particular educational programs for the public or employees that might improve safety.
4. Develop a quality-of-service index. Quality of
service was weighted approximately 23% in the value
assessment. This suggests that it would be worthwhile to develop a comprehensive measure of quality
of service. Such a measure would address the number, duration, and magnitude of outages to both
small and large customers. A quality-of-service index would provide information for examining the
strategic alternatives of BC Hydro to improve service and reduce the likelihood of outages. Since this
recommendation, this decision opportunity has been
pursued (see Keeney, McDaniels and Swoveland,
1995).
5. Negotiations to sell power. At this stage, it
might be useful to examine possible future negotiations to sell power to the United States. For such
negotiations, information on the overall cost of developing the power would be relevant. This would
include the equivalent cost due to environmental
damage, health and safety impacts, and the impacts
on equity, quality of service, and perception of acting in the public interest as well as economic costs
per se. Better information about the overall cost of
power would put BC Hydro in a stronger negotiating
position.
The intent of this list is to demonstrate a simple
but critical point. The strategic objectives of an
R.L. Keeney / European Journal of Operational Research 92 (1996) 537-549
organization can guide the identification of decision
opportunities that enhance both the likelihood of
achieving those objectives and the degree to which
the objectives are achieved. This process, part of
value-focused thinking, helps to put the decisionmaker in control of the decisions being faced rather
than leave that control to others and to happenstance.
4. Procedures of value-focused thinking
Almost all experts on decisionmaking say that it
is crucial list your objectives. But they are not
specific about how to do it or how to use the
objectives to guide your thinking. Value-focused
thinking includes numerous procedures to assist you.
First, several techniques help compile an initial list
of objectives. Second, these objectives are categorized as m e a n s or ends objectives and logically
structured, Third, several procedures assist you in
using the objectives to create alternatives. Fourth, the
objectives are examined to identify worthwhile decision opportunities.
ldenu'fying objectives. T h e most obvious w a y to
identify objectives is to engage in a discussion o f the
decision situation. The process requires significant
creativity and hard thinking, You begin b y asking the
decisionmaker, " W h a t would you like t o achieve in
this situation?" The responses provide a list o f potential objectives and a basis for further probing.
There are several techniques listed in Table 3 that
stimulate the identification of pOssible objectives.
These techniques provide redundant guidance for
identifying objectives, but redundancy is not a shortcoming. It is much easier to recognize redundant
objectives when they are explicitly listed than it is to
identify missing objectives.
When asking an individual to express objectives,
make it clear that what is needed is a list of objectives without ranking or priorities. To expand the
list, you may ask, " I f you had no limitations at all,
what would your objectives b e ? " Similarly, y o u may
ask what elements constitute t h e bottom line for the
decision situation and for the decisionmaker.
Many words, such as tradeoffs, c o n s e q u e n c e s ,
impacts, concerns, fair, and balance, should trigger
questions to make implicit objectives explicit. If a
decisionmaker says "Tradeoffs are necessary", ask
543
Table 3
Techniques to use in identifying objectives
1. A wish list. What do you want? What do you value?
What should you want?
2. Alternatives. what is a perfect alternative,
a terrible alternative, some reasonable alternative?
what is good or bad about each?
3. Problems and shortcomings, what is wrong or right with your
organization? What needs fixing?
4. Consequences. What has occurred that was good or bad?
what might occur that you care about?
5. Goals. constraints, and guidelines. What are your aspirations?
What limitations are place upon you?
6. Differentperspectioes. What would your competitoror your
constituencybe concerned about? At some time in the future,
what would concern you?
7. Strategic objectives. What are your ultimate objectives?What
are your values that are absolutely fundamental?
8. Generic objectives. What objectives do you have for your
customers, your employees, your shareholders, yourself?.
what environmental, social, economic, or health and
safety objectives are important?
9. Structuring objectives. Follow means-ends relationships: why
is that objective important, how can you achieve it?
Use specification: what do you mean by this objective?
10. Quantifying objectives. How would you measure achievement
of this objective?why is objective A three times as
important as objective B?
tradeoffs between what and what. If a decisionmaker
says " T h e consequences should be fair", ask fair to
whom, and what is fair. If the decisionmaker seems
to stop and think, ask what the thoughts are. Responses to these questions may lead to other queries
as appropriate.
Often one begins to think hard about a decision
situation only after some alternatives become apparent. Articulating the features that distinguish existing
alternatives provides a basis for identifying some
objectives. For example, in considering alternative
sites for an airport, one feature that differentiates the
alternatives might be the disruptions to citizens due
to high noise levels. This suggests the obvious objective of minimizing disruption from noise. You might
ask respondents to list desirable and undesirable
features of alternatives and use these to stimulate
thought about objectives.
Structuring objectives. T h e initial list of objectives will contain many items that are not really
objectives. It will include alternatives, constraints,
and criteria to evaluate alternatives. With thought,
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R.L. Keeney / European Journal of Operational Research 92 (1996) 537-549
each item on the list can be converted into objectives. Now the list of proposed objectives will include both means objectives and fundamental objectives. It is important to separate these types of objectives and establish their relationships by examining
the reasons for each. Two important concepts are
repeatedly used. One involves linking objectives
through means-ends relationships; the other involves
specifying fundamental objectives.
Tracing ends objectives from specific means objectives should lead to at least one fundamental
objective in a given decision situation. For each
objective, ask " W h y is this objective important in
the decision context?" Two types of answers are
possible. One answer is that the objective is one of
the essential reasons for interest in the situation.
Such an objective is a fundamental objective. The
other response is that the objective is important
because of its implications for achieving some other
objective. In this case, it is a means objective, and
the response to the question identifies another objective. The " W h y is it important?" test should now be
given to this objective to ascertain whether it is a
means objective or a fundamental objective.
Consider the decision situation involving the
transportation of hazardous material. One objective
may be to minimize the distance the material is
transported by trucks. The question should be asked,
" W h y is this objective important?" The answer may
be that shorter distances would reduce both the
chances of accidents and the costs of transportation.
However, it may turn out that shorter transportation
routes go through major cities, exposing more people
to the hazardous material, and this may be recognized as undesirable. Again, for each objective concerning traffic accidents, costs, and exposure, the
question should be asked, " W h y is that important?"
For accidents, the response may be that fewer accidents result in fewer highway fatalities and less
exposure of the public to the hazardous material.
And the answer to why is it important to minimize
exposure may be to minimize the health impacts of
the hazardous material. To the question " W h y is it
important to minimize health impacts?", the response may be that it is simply important. This
indicates that the objective concerning impacts on
public health is a fundamental objective in the decision context.
Another important concept in identifying fundamental objectives is that of specification. The intent
is to break an objective into its logical parts. For
instance, one fundamental objective for shipping
hazardous materials may be to minimize impacts on
the natural environment. To make this more specific,
ask " W h a t environmental impacts should be minimized?" The response, which may be one specific
environmental impact or many, should clarify the
objective and better focus both thinking and action.
It is often worthwhile to pursue several questions
aimed at specification. Suppose the CEO of a service
finn identifies one objective as 'to minimize nonproductive time spent by employees'. To better understand this objective, you might ask the executive to
be more specific, or to list characteristics of nonproductive time. You might ask how nonproductive time
occurs and whose nonproductive time is of concern.
All of the responses should help specify the objective.
Creating alternatives. The range of alternatives
people identify for a given decision situation is often
unnecessarily narrow. There are several reasons for
this. There is a tendency in problem solving to move
away from the ill-defined to the well-defined, from
constraint-free thinking to constrained thinking.
There is a need to feel, and perhaps even measure,
progress toward reaching a 'solution' to a decision
problem. To get that feeling of progress, one often
quickly identifies some viable alternatives and proceeds to evaluate them, without making the effort to
broaden the search for alternatives.
The first alternatives that come to mind in a given
situation are the obvious ones, those that have been
used before in similar situations and those that are
readily available. Once a few alternatives - or perhaps only one, such as the status quo - are on the
table, they serve to anchor thinking about others.
Assumptions implicit in the identified alternatives
are accepted, and the generation of new alternatives,
if it occurs at all, tends to be limited to a tweaking of
the alternatives already identified. Truly different
alternatives remain hidden in another part of the
mind, unreachable by mere tweaking. Deep and persistent thought is required to jar them into the consciousness. Focusing on the values that should be
guiding the decision situation removes the anchor on
narrowly defined alternatives and makes the search
R.L. Keeney / European Journal of Operational Research 92 (1996) 537-549
for new alternatives a creative and productive exercise.
Numerous guidelines facilitate the search for alternatives, or more precisely, the search for good
alternatives. The principle is that alternatives should
be created that best achieve the values specified for
the decision situation. Both the qualitative objectives
and the quantitative statements of values (e.g., priorities) should be systematically probed to initiate creative thought. Ideally, you create the best possible
alternative using the least amount of time, effort, and
resources. But realistically, in complex decision situations, the practical aim in creating alternatives is to
generate a set of very promising ones.
The objectives in the fundamental objectives hierarchy list all aspects of consequences that are important in a decision situation. Hence, thinking about
how to better achieve these objectives can suggest
altematives. To begin, take one objective at a time
and think of alternatives that might be very desirable
if that were the only objective. Consider every objective, regardless of its level in the hierarchy. This
exercise is likely to generate many alternatives (see
Jungermann, yon Elardt and Hausmann, 1983), most
of which evaluate rather poorly on some objectives
other than the one for which they were invented. If
this is not the case, you have not been very creative
in generating the alternatives. This process should
provide a broad range of potential alternatives.
The next step is to consider objectives two at a
time and try to generate alternatives that would be
good for both. These alternatives are likely to be
refinements or combinations of those created using
single objectives. Then take three objectives at a
time, and so on, until all objectives are considered
together. Next, examine the alternatives you have
generated to see if it is possible to combine any of
them into a single alternative.
The means objectives are also a fruitful grounds
to stimulate thinking about alternatives. Any alternative that influences one of the means objectives
should influence at least some of the associated
fundamental objectives. More complicated decision
situations tend to have more means objectives, which
should suggest more alternatives. Consider a rather
simple fundamental objective of a firm to maximize
profits from the sale of a product. Means objectives,
in this case, might address sales volume, price of the
545
product, cost of manufacturing the product, cost of
distributing the product, and overhead cost. Altemafives could be created that influence each of these.
A decisionmaker's broadest objectives are the
strategic objectives. These provide the foundation for
creating any alternatives or identifying any decision
opportunities based on values. Sometimes the question of what can be done to contribute to the
achievement of each strategic objective is worth
pondering. Applying the ideas above to each strategic objective should suggest some worthwhile alternatives. Using the strategic objectives in this way,
without a decision context, is similar to identifying
decision opportunities.
Descriptive research on decisionmaking has made
it clear that the processes typically used to arrive at
decisions are often not as logical or systematic as we
would like them to be (see Russo and Schoemaker,
1989). Thus, at the end of a decision process, when
you are about to choose an alternative, you should
once more think about new alternatives. At this
stage, you know how good that about-to-be-chosen
alternative is. You should also have a good idea of
the time, money, and effort necessary to implement
it. Thus, carefully search for some new alternative
that can better achieve the fundamental objectives by
using the same or fewer resources in a different way.
Decision opportunities. Who should be making
your decisions? The answer is obvious: you should.
Well then, who should be deciding what decision
situations you face and when you face them? The
answer here is the same: you should. At least you
should control far more of your decision situations
than many of us do. Controlling the decision situations that you face may have a greater influence on
the achievement of your objectives than does controlling the alternatives selected for the decisions.
Decisionmakers usually think of decision situations as problems to be solved, not as opportunities
to be taken advantage of. Thus, it is not surprising
that decisionmakers do not systematically hunt for
decision situations. Who needs yet another problem?
One of the main ideas of value-focused thinking is
that perhaps you need another 'problem', because a
decision problem may not be a problem at all but an
opportunity. A decision opportunity may alleviate
some decision problems o r perhaps allow you to
avoid many future problems. In this sense, recogniz-
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R.L. Keeney / European Journal o f Operational Research 92 (1996) 537-549
ing and following up on decision opportunities is
analogous to prevention, whereas dealing with decision problems is analogous to cure.
There are two ways to create decision opportunities. One is to convert an existing decision problem
into a decision opportunity. Often this involves
broadening the context of the problem (see Nadler
and Hibino, 1990). The other way to create decision
opportunities is from scratch. Use your creative genius, which can be stimulated by value-focused
thinking, to examine how you can better achieve
your objectives.
The strategic objectives of an organization are the
foundation from which decision opportunities can be
identified. But how many organizations have carefully written and organized their strategic objectives.
In how many organizations do the employees know
and understand these strategic objectives? The answer to both questions is ' v e r y few'. The chance to
state and clarify these strategic objectives is itself a
decision opportunity.
The decisionmaker should develop specific procedures to initiate the search through the strategic
objectives for decision opportunities. Some of these
procedures should be independent of decision situations currently being addressed. For example, you
could set up a procedure to seek potential decision
opportunities on the first day of every month. To
implement this procedure, the decisionmaker will
have to unambiguously state and structure its strategic objectives. Then, each month the decisionmaker
should verify that the strategic objectives are appropriate and make any necessary changes. There should
usually be no changes since we are talking about
broad, high-level objectives. Then the decisionmaker
should use each strategic objective to help think of
decision opportunities to do things better.
Decision opportunities can be very helpful to you
when you do not have direct control over a decision
that you care about. In an important class of such
decisions, one stakeholder wishes to have a certain
altemative selected, but a different stakeholder has
the power to make the decision. A firm wants its
proposal to supply a product to another firm accepted, a govemnient wants another government to
sign an agreement, an executive wants his proposal
for a sabbatical accepted by the organization, and so
on.
Suppose you are the stakeholder who wants a
particular altemative selected by another stakeholder,
whom I will now refer to as the decisionmaker. You
should recognize your decision opportunity to take
control of the decision situation. Rather than simply
allow the decisionmaker to choose an alternative that
may not be the one you desire, you should create
altematives that modify your desired alternative so
that it maintains its essential features for you and is
better than the existing alternatives for the decisionmaker whose decision is required.
The key to 'solving' a problem of this nature is to
view it from the perspective of the decisionmaker.
First structure her values as much as possible. Indeed, she should have little objection to your efforts
in this regard, as she may end up better off as a
result. In this process, begin by identifying the negative impacts of your desired altemative relative to
the status quo in terms of her values. These impacts
probably affect the means objectives. Follow their
implications through a means-ends objectives hierarchy to the fundamental objectives of the decisionmaker. Now you should be able to create modified
altematives that can improve matters in terms of her
fundamental objectives while maintaining the key
consequences desired by you. In many cases the
modified alternatives should be better than the status
quo to the decisionmaker. It is worth noting that the
strategic objectives of a decisionmaker are likely
much broader than the set of fundamental objectives
influenced by your desired alternative. Thus, an alternative distinct from the original altemative may be
used to 'satisfy' her when used in conjunction with
the original altemative.
From your perspective, the decision alternatives
include the status quo and any others you can create.
From the decisionmaker's perspective, the alternatives are the status quo and the alternative that you
eventually suggest. The problem may be characterized as an empathetic negotiation. You negotiate for
the decisionmaker and make sure that she gets enough
to support your desired alternative, and you negotiate
for your side as well. This situation may also be
viewed as removing constraints to action. The interplay between the descriptive and prescriptive aspects
of decisionmaking in empathetic negotiations is interesting. You use your description of the decisionmaker's values both to create new alternatives and as
R.L. Keeney/ EuropeanJournal of OperationalResearch92 (1996)537-549
a basis for negotiating her position prescriptively.
Also, you balance overall impacts to the decisionmaker and to yourself in a manner that is prescriptively reasonable to you, and that the decisionmaker
will view as descriptively fair and responsible. In
simple terms, your goal is to create a win-win
alternative.
5. Applications of value-focused thinking
In addition to the BC Hydro case which was
outlined in some detail, value-focused thinking has
been applied to a number of other important situations. The brief descriptions below are representative
of its relevance.
Providing professional service. A premier organization concerned with negotiations and dispute resolution is Conflict Management, Inc. (CMI), located
in Cambridge, Massachusetts. CMI provides training
in negotiation skills to corporate and public managers and executives and advises clients on the processes of negotiation and dispute resolution. As part
of their overall review of the firm, CMI asked
Howard Raiffa of the Harvard Business School and
me to help them articulate their strategic objectives
and identify opportunities that they should consider.
Raiffa and I held discussions with each of nine
principals of CMI to specify and critically examine
their objectives. Integrating the results of these individual meetings, we developed a strategic objectives
hierarchy and a means-end objectives network for
the organization. The strategic objectives and the
means objectives were used to generate new alternatives and decision opportunities for CMI (see Keeney,
1994).
Developing mineral resources. Coal has been discovered in a remote rainforest of Sabah, a State of
Malaysia located on the island of Borneo. A major
international company is seeking permits from the
government of Sabah to assess the value of those
reserves and develop them if resource appraisals
indicate it is financially worthwhile to do so. Because the area has a high environmental value, the
government chose to formally examine the request
for permits using what was referred to as a draft
environmental impact statement (EIS). The problem
547
is that few EISs provide guidance for making decisions and many do not address the different viewpoints which often are based on different values.
Working with a Canadian consulting firm under
the auspices of the Sabahan government, Robin Gregory of Decision Research (Eugene, Oregon) and I
designed and conducted a three-day workshop to
outline the EIS to address the substantial issues. In
attendance were various stakeholders, including the
resource company, the World Wildlife Fund of
Malaysia, the Sabah Foundation (a powerful and
respected local foundation concerned with the longterm economic and environmental quality of life in
Sabah), and State agencies concerned with finances,
water resources, agriculture, mining, tourism, indigenous people, and the environment. Collectively, we
outlined a set of fundamental objectives addressing
economic, environmental, health and safety, political, and international concerns. From these, we created distinct alternatives that involved declining the
permit request (i.e., status quo), active conservation
of the area, development of the coal with many
controls to mitigate potential environmental consequences, and eventually opening the area for tourism.
Combinations of these alternatives were also designed (see Gregory and Keeney, 1994).
Creating a compensation system. Strategic Decisions Group (SDG) is an international consulting
firm with headquarters in Menlo Park, California. Its
mission is to improve the quality of decisionmaking
by applying decision knowledge to help clients make
sound decisions and achieve effective actions. As
with many consulting organizations, the compensation system for professionals is important. It should
promote action in the interest of the finn and its
clients and be fair to the individuals. To help create
possible improvements t o SDG's compensation system, I held separate discussions with four partners of
SDG to identify the objectives of their compensation
system. There were numerous means objectives to
support the fundamental objectives, which were organized to focus on three stakeholders: the individuals at SDG, the firm, and its clients. The intent was
to provide a sound basis to facilitate discussion of
compensation systems, identify issues of agreement
and disagreement among partners and suggest ways
to resolve any conflicts, and to create and evaluate
potential compensation systems.
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R.L. Keeney/ European Journal of Operational Research 92 (1996) 537-549
Managing wastewater. The Municipality of
Metropolitan Seattle, referred to as Metro, is a regional governmental agency responsible for water
pollution control in the Seattle metropolitan area.
The agency collects and treats wastewater and discharges or recycles the remaining liquids and solids.
Facilities for carrying out these functions are planned,
designed, constructed, and operated by Metro.
The decisionmaking authority of Metro is a board
consisting of elected and appointed officials. In mid1992, working with Tim McDaniels and Vicky
Ridge-Cooney, who was the Metro project manager,
we met individually with several people on the Metro
board to elicit values appropriate for Wastewater
2020 Plus, a project to protect water quality through
the first half of the 21st century. From our discussions, we constructed a list of over 200 objectives.
These were organized into categories of fundamental, means, and process objectives for Wastewater
2020 Plus.
An important insight from the structured objectives was that there are two distinct decision contexts
that are simultaneously faced by Metro. One concerns decisions about wastewater facilities that will
be constructed and operated. The other concerns how
those decisions are made. This second decision context includes whom to involve in the decision-making process and when to involve them. What role
should the various stakeholders play? How does one
communicate effectively with stakeholders? How do
you determine what information is relevant and how
do you obtain it and use it? How do you coordinate
decisions with all of the other governmental units in
the region?
The focus on values has facilitated communication. The Metro board had decisionmaking authority,
but a staff had responsibility for developing recommendations for actions. The majority of communication was from the staff to the board; the board
mostly reacted. A mechanism was needed to provide
guidance from the board to the staff. The Metro
objectives provide such guidance for all of the staff's
actions. The objectives also indicate how best to
communicate the implications of alternatives to the
board in the terms that they care about, namely, their
values.
California Seismic Safety Commission. Major
earthquakes have occurred in the past and they will
occur in the future in California. We cannot stop the
earthquakes, but we can prepare for them and act
wisely to minimize the loss of life and property
damage. Recognizing this, the Legislature of California created the Seismic Safety Commission to provide a consistent policy framework and the means
for coordinating all earthquake-related programs of
agencies at all government levels. The Commission
is composed of 17 commissioners and a permanent
staff of roughly eight full-time employees. In the
early 1990's, the Commission decided to create a
common set of strategic objectives that would be
supported by the staff and all the commissioners.
At a two-day workshop in April 1993, the values
were articulated in a meeting of the commissioners
and the staff. To ensure that each individual contributed his or her thoughts, I first asked them to
separately write down the values that they thought
should be pursued by the Commission. Then I asked
them to write down the values they thought were
appropriate for commissioners, and then the values
appropriate for the staff. Next we created a common
set of values for each of the three cases.
The role of the Commission is defined by its
values, specified by the objectives, and pursuing
Commission values should be the entire focus of
Commission activity. One major use of the objectives is to facilitate communication at the Commission, among commissioners and staff, and between
anyone affiliated with the Commission and all potential users of Commission information. The Commission objectives also provide a basis for creating
alternatives to pursue those objectives for evaluating
alternatives when there are several possibilities, and
for identifying decision opportunities in areas of
importance.
6. Value-focused thinking and your organization
The fundamental point of this article is that
value-focused thinking can help you and your organization. Clarifying and explicitly stating your strategic objectives should have a high benefit-to-effort
ratio. Even if your objectives are fairly clear but not
written down, writing them down should lead to
further clarification. These strategic objectives will
not only help you make wiser decisions but, more
R.L. Keeney / European Journal of Operational Research 92 (1996) 537-549
importantly, they should help you recognize and
create new decision opportunities.
It may initially be difficult to articulate, review,
and revise your objectives. You may get the feeling
that you are not 'solving' your decision problems
when you are just thinking about objectives. You
may feel it is merely a philosophical exercise to
articulate your values, whereas the decision problems
facing you are real. But whether or not you label
thinking about your values as an exercise, the results
can help with any of the real decisions that you
make. One good decision opportunity can repay you
for a lot of 'philosophical' thinking.
As you gain experience, thinking about your objectives should get easier and the results should get
better. There are three reasons for this. First, as with
all endeavors, practice makes perfect, or at least,
practice makes better. It is useful to practice by
articulating your values for easier decision situations
if you plan to use value-focused thinking for difficult
decisions. Second, as you structure your values, you
will necessarily tackle some complex and involved
value issues. As you sort these out, you will have a
better understanding of your values which makes it
easier to clarify difficult value issues. Third, as you
continue to structure and understand your values,
they will begin to form a coherent pattern. Numerous
frames of reference based on previously articulated
values facilitate thinking about your values in a new
decision context.
To recapitulate, value-focused thinking will help
you in three major ways: to recognize and identify
decision opportunities, to create better alternatives
549
for your decision problems, and to develop an enduring set of guiding principles for your organization.
Acknowledgements
This work was supported in part by NSF Grant
SBR-9308660. Parts of the paper were adapted from
Keeney (1992, 1994).
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