Chapter 1 - Foundations of Quality Decision‑Making

01-01 - Introduction to Quality Decision Making (15 min.) Sample Lesson
01-02 - Framing the Problem (14 min.) Quiz: 01-02 - Framing the Problem
01-03 - Generating Alternatives that Unlock Value (13 min.)
01-04 - Acknowledging Uncertainty and Gathering Information About It (31 min.)
01-05 - Values, Decision Evaluation and Action (12 min.) Quiz: 01-05 - Values, Decision Evaluation and Action
01-06 - Probabilistic Evaluation and Value Insights (26 min.) Quiz: 01-06 - Probabilistic Evaluation and Value Insights

Chapter 2 - Bias‑Aware Thinking and Creative Innovation Techniques

02-01 - Cognitive Biases: Awareness and Mitigation - Part 1 (18 min.) Quiz: 02-01 - Cognitive Biases: Awareness and Mitigation - Part 1
02-01 - Cognitive Biases: Awareness and Mitigation - Part 2 (26 min.) Quiz: 02-01 - Cognitive Biases: Awareness and Mitigation - Part 2
02-02 - Innovation and Creative Problem Solving (23 min.)

Chapter 3 - Geology and Reservoir Engineering Examples – Thinking Probabilistically

03-01 - Geology and Reservoir Engineering Examples – Thinking Probabilistically (28 min.)

Framing Decisions, Mitigating Bias and Probabilistic Insight for Innovation / Chapter 1 - Foundations of Quality Decision‑Making

Lesson 01-01 - Introduction to Quality Decision Making

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Transcript

01. Lesson 1.01: Introduction to Quality Decision Making 02. Do your Projects and Decisions Lack Clarity?03. How do we judge a “good” decision?04. The decision-making process can be optimized 05. What you'll learn in this course 06. Decision Quality is well suited to the projects and problems we face 07. We will judge the Quality of the Decision by how well we satisfy 6 components 08. When and how should we use Decision Quality 09. When and how should we use Decision Quality: Industry Examples 10. Many decisions are inefficiently made, without considering alternatives 11. Dialog and Collaboration are Keys to Quality Decisions 12. So why apply this framework, mindset and tools to your complex decisions?13. Ready to Start your innovative and value-adding project?

01. Lesson 1.01: Introduction to Quality Decision Making

Hello, and welcome to our course on Framing Decisions, Mitigating Biases, and Gathering Probabilistic Insights to Drive Innovation in Your Work. My name is Brian Ruskin, I'm a geologist and also a decision specialist, and I'm here to help you with tools and mindsets to unlock greater value from your complex projects.
I'm going to be introducing in this chapter a concept and a framework called decision quality, and that will help us with the whole process of framing our decisions, evaluating alternatives, and exploring value through probabilistic insights.
Before I do, I want to give you a story. I was recently working with an energy client, and we were in a multidisciplinary team. We were trying to figure out: what is the optimum way to complete a well? What would be the frac design that would generate the most value? Well, we had some engineers, we had some geologists, we had some managers in the room, but we were very unsure about how to approach this project. Some people had worked it before, and they were keen to sort of do a refresh, to just sort of add some new data and use the same workflow. Some other folks had some big questions about where to begin. Some managers had concerns about whether this was a short-term or a long-term project, how many zones would be considered, what geology factors. There were lots of questions. And this really pulled on the team. We were uncertain about how to start. And I want to give you a way that we can avoid that from the beginning, so you can frame your projects right and start unlocking greater value.

02. Do your Projects and Decisions Lack Clarity?

But first, let's talk about some things that we often hear when we're trying to make a decision or work on a project. Does any of this resonate with you? Do you ever think: well, you know, I'm not sure if I'm clear on what problem I am trying to solve. Sometimes we're just plunging into our work. Seems like the right thing to do, but maybe it isn't. Are we solving the wrong problem? Do you ever ask yourself what value is this work adding? How important is this? And how are we going to judge if we were successful or not? How about alternatives? Are we exploring the full range of alternatives? Could we be doing something different, hopefully something better? And a big crux of this course is talking aboutprobabilistic ranges and uncertainty and feeling comfortable with that. So are we comfortable with the uncertainties of our project and the assumptions that we're making? And finally, how are we going to be able to tell if we've made a quality decision or not? I'm going to give you the tools in this course to address all of these and feel better about your projects and your decision-making.

03. How do we judge a “good” decision?

How is it that we judge a decision to be good or to be bad? Well, most people will judge a decision on its outcome. So we'll often say: well, we gathered all the relevant information and we used our best model, our best analytics, maybe even our intuition, and we got to the right answer. Is that right? How about: we worked the project for a long time, we had all the experts in the room, they reviewed it, so we're confident that that must have been a good decision because of the time and effort involved. What about if we just came to a consensus and we went with that? Surely that's a good decision, right? Well, all of these are not quite what we're going for here, and they tie to a basic human tendency to judge a decision based on its outcome. So if the outcome of our project was good, we consider that to be a good decision. If the outcome was bad, we'd consider that to be a bad decision. However, that's not how the world works and certainly not our industry with so much uncertainty. We could do everything right and still get a poorer result. We could be lucky and do a poor job and still get a good outcome. That doesn't make it a good decision.

04. The decision-making process can be optimized

We can actually optimize the process of making decisions. But we need different tools and a different mindset to do it. And that's what this course is all about. I hate to say it, but for our industry and for complex decision-making in your technical and strategic work, there's really no way to accurately predict future outcomes with perfect clarity. But we can get better at doing a more representative job of what they could be. So the decision quality framework that we're going to discuss in this lesson is basically not to determine the quality of a decision on its outcome, but instead on what went into it, the full process. And through this process, this is where we can unlock greater innovation and greater value, which of course we all want.

05. What you'll learn in this course

There's a lot in this course, and to just give you a flavor for some of the things we're going to learn. We're first going to start about how we can frame our projects and decisions with clarity. So we don't have all those questions about why are we doing this, what is the value? We are going to be clear on how we define the problem, how we articulate the value we're after, and how we identify meaningful and value-adding alternatives.
We're going to talk a lot about how we evaluate uncertainty, the risk, and the upside, by considering uncertainty not just as a nebulous concept, but actually a way to quantify it and use it rather than a single point ordeterministic estimate. And through this, we can unlock a lot of insights.
I'll show you how to structure yourprobabilistic problems, and so you can build models and understand actually what is driving the outcome. What are the constraints that I need to deal with, and are there any ways that I can mitigate the uncertainty?
In Chapter 2, we're going to talk a lot aboutcognitive biases and how they can distort our judgments and actually impact our decision-making in a negative sense. But through recognition and most importantly, mitigation, we'll be able to deal with those cognitive biases, and actually come out the other side with greater insight.
A lot of this course, at the beginning maybe, feel a bit like we're talking about divergent thinking - being creative and being broad. And that's great and that's necessary for innovation. And eventually, once you've explored the full decision space, we'll start to converge on our evaluations. And I'll show you some evidence-based examples of how this works.
Finally, we want to be able to integrate these tools and our mindsets into our work. And so hopefully, through this course, you'll learn how to generate stronger insights in your technical and your strategic evaluations, make more confident decisions, and create greater value.

06. Decision Quality is well suited to the projects and problems we face

I'm going to introduce the concept of decision quality with you.Decision quality, or I may call it DQ from time to time, is a strategic decision-making process. It's used to judge the quality of the decision at the time it's being made, not based on the outcome. It's a framework, it's structured, there are steps and requirements, and we'll talk about those in turn. But through application of this framework and tailoring it to your particular project, you can actually unlock greater value, specifically in conditions of uncertainty. Decision quality has been around for a long time, it started in the 60's with researchers at Harvard and Stanford such as Howard Riaffa and Ronald Howard. They were studying how we make good decisions, how we analyze them, and trying to incorporate not only analysis but game theory andpsychology into the decision-making. Decision quality has been used by multiple firms and has been applied to many problems in industries. It's very powerful in the energy sector where we're dealing with uncertainty almost all the time. So I had the opportunity to work as a decision consultant and modeler for a firm called Strategic Decisions Group, which was instrumental in the decision quality framework creation and evolution. I was there as a client and also as a consultant. So I've seen on both sides how decision quality can help in your particular work and also how it can be applied to a broad range of problems.

07. We will judge the Quality of the Decision by how well we satisfy 6 components

We're going to learn how to judge that quality of decision through the process and how well we can satisfy the 6 components of decision quality. And here they are. We're going to start with framing. How we frame the problem and define its scope at the beginning. Actually understand what is the decision that we need to make and the problem to be solved? We'll talk about creative ways to generate alternatives in Step 2. Then we're going to gather reliable information about those alternatives. And I'll explain that this is not just gathering the first data that you can come to. We're going to really try to understand the ranges. We can't evaluate anything until we know what the value metric is. So we're going to be clear in Step 4 about what the value metrics are. It's essentially what do we want from this project. And through all of this, the theme will be probabilistic evaluation. And our sound reasoning or our analysis here incorporates probabilistic work as much as possible, as pragmatically as possible to understand the key drivers of uncertainty and what we can do about them. And finally, we need to be ready to act. So this is where it all comes together. And if we satisfy these 6 steps, we can say we've made a quality decision regardless of the outcome. And we've learned a lot more along the way than we would have if we had pursued a single path.

08. When and how should we use Decision Quality

You may be saying to yourself, well, this seems like another process and I don't have time for that in my work. It seems like it might be cumbersome or labor intensive. Well, this is tailorable to your work. For simple everyday decisions like what do I wear today or what do I have for lunch, we don't need to think a whole lot. We rely on our instincts or our gut. Or for some simple problems, it's just common sense or the mental shortcuts that we take every day. And we'll talk about those shortcuts or heuristics in Chapter 2. But we can do this because the complexity is low and the stakes are low. There's no real incentive for us to spend a lot of time debating these simple decisions. But as complexity increases, our stakes get higher. We've got more riding on these decisions, and we've got more uncertainty involved. And that's where the decision quality process becomes very relevant. So as I say, we can tailor this process depending on the range and scope of your project. It may benefit you just from spending a day thinking about these elements with your group and you'll have a much stronger project than you would have if you just dived in or if you had just used a different method of decision-making where you're going to judge it on the outcome. However, for major decisions, for $1B+ projects, this process may take months and the work will be guided by this framework in a way that satisfies all of those 6 requirements of DQ. And again, you'll feel much better about the multi-billion dollar decision that you're making if you spent the time and the effort to fulfill these steps.

09. When and how should we use Decision Quality: Industry Examples

For organizational complexity and analytical complexity, as these increase, there can be an increasing need for decision quality. So let's think about, in your own line of work, when you might want to use a framework such as this. Well, maybe you're thinking about a new diagnostics program or how we're going to collect data for a project, that can have analytical complexity. How about a well pad proposal for drilling? What about more organizational complexity, changing a model or a workflow or organizing a team? How about acquiring a new asset? The stakes of all of these can be increasing and be actually very high. And for these, I've seen the DQ process being applied successfully.

10. Many decisions are inefficiently made, without considering alternatives

Now let's talk about how we usually make decisions. And they tend to be fairly inefficient because we're not considering enough alternatives. So on this diagram, we can see what usually happens is you have a project team and they've got a single alternative. They've got what they want to present to a decision maker or a decision board. And we'll call the decision board the approver. So what we've got here is two myths at play: an advocacy myth and an approval myth.
Let's start with the project team, the advocates. They're advocating for a single solution. There's their proposal to solve a problem that's known and they're going to present it to the decision-maker. The advocacy myth is that they're effective if they present their alternative and it gets accepted. However, that doesn't mean it's a quality decision. They could be presenting a bad idea, but if it sounds good and the decision-maker approves it, that's been advocated for and some people will say that's a good decision.
Let's go to the approvers. In this approval myth, the approvers or decision-makers think that, well, if I ask the right questions and I'm satisfied with the answers, I've interrogated that project team, that must be a good decision. Or if I don't like the answer or the project team can't answer it for me, I don't like it, I'll reject it and it's back to the drawing board, the project team has to work it again.
You can see how this can be competitive because people are competing here. People competing for budget, for time, for approval. It's maybe not showing our best foot forward. This is very transactional between teams. There's a bit of a power dynamic, of course, at play. And this tends to be fairly narrow and inefficient because we're presenting, in general, a single alternative for approval or rejection. And in the case where the decision-maker or the approver isn't satisfied, we've got to go and redo work.

11. Dialog and Collaboration are Keys to Quality Decisions

There's a better way. And the decision quality framework advocates for a collaborative, fully communicative process throughout. So in this case, the decision board and the project team are working together. We recognize there's a problem and the project team assesses it. Then they frame the problem and make sure that the decision board approves it. We generate alternatives and make sure the decision board is on board for that step. We evaluate and show our results and the decision board is there along the way. So throughout this process, there was no surprises because we start with a well-framed project. We've explored and discussed these alternatives. We've carefully evaluated, so we're basically doing a great job of the evaluation where the project team is. But the decision board is along for the full journey. So through this regular dialogue, there's no surprises. And when we come up with insights, we can actually iterate as we're going through rather than at the very end and having to redo work. So we're basically gathering insights to iterate on the fly rather than restarts. And we're removing the competition element. The competition here isn't through people or for money or for time, it's for the best alternative. Our common goal here within a well-framed project is to generate the best value. If we are on board with that decision or with that project goal, then we're going to make a better decision because we're competing for what's best for all of us. So this whole process, this dialogue, promotes value creation and ultimately a quality decision.

12. So why apply this framework, mindset and tools to your complex decisions?

Why would you apply this framework and mindsets and these tools into your complex decision-making? Well, this framework is logical. It's built for analyzing problems that are too complex for just bootstrap answers and for high-impact problems. As I say, if we have organizationally, strategically, technically complex problems, DQ is well-suited for that. Again, being able to judge the quality of the decision while we're making it is great for all of us. We don't have to rely on hoping for a possibility in the future and being dissatisfied if we don't get exactly what we claimed. The dialogue process thats in between the evaluators, the stakeholders, and decision-makers is really beneficial, again to eliminate surprises, to unlock better alternatives, to hear more perspectives throughout this process, and again to iterate instead of restart. But most significantly, through this process, we're going to be armed with a full range of likely outcomes and insights into what causes them and what we can do about them to maximize value.

13. Ready to Start your innovative and value-adding project?

Does this sound good? Are we ready to start innovating and creating value? Well, not so fast. Before we dive in, we've got to be able to properly frame the decisions to be made so we're solving the right problem and so we're gathering insights right at the start. So I look forward to discussing project framing with you in the next lesson. Thank you.