Monday, 26 December 2011

Why Would Anyone Need A Decision Analyst

"It is change, continuing change, inevitable change, that is the dominant factor in society today. No sensible decision can be made any longer without taking into account not only the world as it is, but the world as it will be."

- Isaac Asimov -

When TT and I were talking about my career prospects, I mentioned that I would like to work as a decision and risk analyst (after all, that’s what I’m studying!). He was surprised: “why would anyone need a specialist to analyze his/her decisions? Doesn’t each person know what is the best decision for him/her?”.

This, my friends, is a valid question. Now, why would anyone pay lots of money, just so that some stranger would analyze their decisions?

First, keep in mind that we are not talking about the straightforward decision problems that people encounter in their daily lives. We are talking about decisions with consequences so costly or undesirable that it really is worth paying someone for their help. Some decision makers need to make such decisions, that can affect the whole society (or parts of it) negatively. Remember, all human activity springs from a decision – the decision to act or not to act.

So, why do we need help?

* In politics, many decision makers are elected by the people. There is no official requirement that they know how to make good decisions. If there were, many strange laws would have not come into existence. Many wars would not have been fought and our society would look very different now. Most decision makers are normal people, like you and me. And how do you and I make decisions? Sometimes we use our gut feeling. Other times we look at what’s best for us personally, not the society as a whole. Cognitive biases tend to affect us now and then, too. Often we don’t have the time, nor the energy, to carefully analyze all the aspects of a given decision problem. And what’s the result? Sometimes it’s good, sometimes it’s bad. It’s rarely optimal.

* Decision making requires the ability to analyze alternatives and consequences, to assess uncertainties, to weigh costs, to work with different types of probabilities. It’s about identifying the problem, defining objectives and running risk analyses. How many of us do all those things when faced with a tough decision? How many of us KNOW how to do them?

* A good decision maker is also familiar with “psychological traps” – in many cases people use heuristics to make decisions. These normally function very well, but sometimes they can lead to unwanted cognitive biases that affect the solution negatively.

* Decision analysis is also about knowing how to use the correct tools.


  As with most things in life, a tool is only useful as long as one knows how to use it.


"Quality is never an accident; it is always the result of high intention, sincere effort, intelligent direction and skillful execution; it represents the wise choice of many alternatives, the cumulative experience of many masters of craftsmanship. Quality also marks the search for an ideal after necessity has been satisfied and mere usefulness achieved."

-John Ruskin-

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