Problem Solving
Objectives
Learn how to state and clarify a problem
Develop a procedure for problem solving
Learn the traps
in problem solving
What’s typical?
Self-Doubt
Over Confidence
Procrastination
Flip-flops
Desperation!
WRONG!
Six Criteria for Effective Decisions
Focuses on what is important
 Logical and consistent
 Acknowledges objective and subjective
factors, blends analytical and intuitive
thinking
Does not gather too much information
 Tries to reach consensus
 Straightforward, reliable, easy to use,
flexible
Problem Solving Model
P roblem
O bjectives
A lternatives
C onsequences
T radeoffs
Additional Factors
Risk
Uncertainty
Linked
decisions
Problem Solving Steps
State the problem carefully
 Acknowledge complexities
 Avoid assumptions and prejudices
Specify the objectives
 Create imaginative alternatives
 Understand the consequences of the
alternative
 Grapple with your tradeoffs………con’t
Problem Solving Steps, con’t
Clarify uncertainties
 Think about your risk tolerance and the
risks of each alternative
 Consider linked decisions
Each alternative opens or closes future options
What’s the best solution?
A good solution
to a well-posed Is a
almost
problem….
always
a smarter An excellent
choice solution to a
poorly posed
than..
problem
Define the Problem
• What triggers the problem?
• State the problem
• Question the constraints of the problem
statement
• Identify the essential elements
• How does this impact other decisions?
• What is the scope of the problem?
• Gain insights from others
• Restate problem, if necessary
What Objectives Do
Help determine what information
to seek
 Explain your choices to others
 Determine the importance of,
time and effort devoted to the
problem
How to identify objectives
 Write down the concerns you hope to
address:
 Wish list
 Worst possible outcome
 Impact on others
 Insights from others
 What’s a good alternative but unfeasible?
 What is bad about the worst alternatives?
How to identify objectives
 Convert the concerns into succinct
objectives
 Separate the ends from the means
Clarify what you mean by each objective
 Test your objectives
Alternatives
Use your objects and ask HOW?
 Challenge constraints to your alternatives
 Set high aspirations
Think through your alternatives before
consulting others
 Learn from past experience
 Then ask others for suggestions
How to generate alternatives
 Brainstorming
Just list alternatives, don’t evaluate
Never stop looking for alternatives
 Look for win-win alternatives
Stop when you’ve thought through
alternatives
 One solution would satisfy you
 But still have a range of alternatives
Consequences
List the consequences of each alternative
 Assess the future consequences of each
alternative
 Create a free-form description of the
consequences
 Eliminate any clearly inferior alternatives
 Organize descriptions of remaining
alternatives into a table …….
Consequences
 Try to develop a common scale to measure
consequences
 Use qualitative and quantitative data
 Use experts if necessary
 Use scales that reflect appropriate levels of
precision
Tradeoffs
Eliminate alternatives clearly dominated by
others
 Then swaps between alternatives using
measures
Value incremental improvements
 Make consistent tradeoffs
Uncertainties
 What are the key uncertainties?
 What are the possible outcomes of these
uncertainties?
 What are the changes of the outcomes,
given these uncertainties?
 What are the consequences of each
outcome?….
Uncertainties
Identify the key uncertainties
 Define the possible outcomes
 Assign chance of occurrence of each
outcome
 Clarify consequences using quantitative
and qualitative measures
 Create a decision tree
Risk Tolerance
How much risk do you want to handle?
 How much are others affected by your
decision?
 Quantify the risks, if possible
 Seek to lessen the risks but avoid foolish
optimism
 Don’t avoid making risky decisions just
because they are complex
How to lessen risk
Seek risk reducing
information
 Diversify the risk
Hedge the risk
Insure against the risk
Linked decisions
Choose options that leave future flexibility
intact
 Get timing right on decision tree
 Describe the consequences at the end
points
Psychological Traps
Working on the wrong problem
 Failing to identify key objectives
Failing to develop a range of good, creative
alternatives
 Overlooking crucial consequences of your
alternatives
 Giving inadequate thought to tradeoffs
 Disregarding uncertainty…….
Traps, con’t
 Failing to account for risk intolerance
Failing to plan ahead when decisions are
linked over time...
So, tell me some specifics on these traps...
Common Traps
Anchoring trap
Status Quo Trap
Sunk Cost Trap
Confirming
Evidence Trap
Framing Trap
Overconfidence
Trap
Recallability Trap
 Base Rate Trap
 Prudence Trap
 Random Events
Review
A model for problem solving
 The actions in each of the steps
 Common Traps in problem
solving