Critical Thinking with Structured Analytical Techniques · Critical Thinking with Structured...
Transcript of Critical Thinking with Structured Analytical Techniques · Critical Thinking with Structured...
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Critical Thinking with
Structured Analytical
Techniques
Presented by
Darrel Raynor, PMP, MBA [email protected]
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Objectives
• Understand what Structured Analytical Techniques
are
• Understand why structured approaches are
necessary
• Recognize common cognitive biases that can
adversely affect decision making
• Recognize situations where Structured Analytical
Techniques can be used
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Exercise – 5 Seconds!
• A bat and a ball cost $1.10 together. The bat costs
$1.00 more than the ball. What is the price of each?
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Answer
• If you answered $1.00 for the bat, and $.10 for the ball,
you are in good company!
– Over 50% of Ivy League graduate students gave this
answer
– And it is wrong
• Correct Answer
– $1.05 for the bat
– $.05 for the ball
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Heuristics
• Often used when we want a quick answer
• Not necessarily wrong to use
– What if your son said he was on his way to the store to buy a bat
and showed you that he was taking $.50 with him?
– Even the wrong calculation would answer the question “Do I
have enough money?”
• But Heuristics are seldom enough for important
decisions
– What if this had been your daughter’s make-or-break entrance
exam question to college?
• For these sorts of questions, we must employ analytical
methods
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Classification of Analytical Methods
Analytical Methods
Expert Judgment (Qualitative)
Quantitative Methods (w/
Expert Generated Data)
Quantitative Methods (w/
Empirical Data)
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Evolving Issues with Current
Methods
• Growing complexity of problems
• Requirements to share information
• Analysis and Decision making by separate entities
• Growth of Governance & Compliance
• Dispersion of expertise
• Across organizations, between organizations
• Identify/judge validity of alternative mental models
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Issues Based Upon Individual and
Group Thinking
• Individuals
– Cognitive Biases
– Framing that encourages/discourages
– Pattern Misrecognition
• Groups
– Sidetracks
– Bullying
– Personalizing differences of opinions
– Committee Think…
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Consider Cognitive Biases
• Economic theory assumes the individual is perfectly
rational
• This ignores the often demonstrated fact that
individuals are actually “boundedly” rational
• Often seek “satisfactory” answer vs. the optimal one
• Some have anti-quantitative bias
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Examples of Cognitive Biases
Co
gnitiv
e B
iases
Over Confidence
Sunk Costs
Recency Effect
Confirmation Bias
Anchoring Bias
Illusory Correlation
Hindsight Bias
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Example #1: Sunk Cost
• Money already spent
– Should ignore sunk costs and proceed by marginal cost
alone
• High sunk costs have been shown to escalate this
effect
– Perhaps due to “loss aversion”
– High NFL draft choice isn’t working out, but played
anyway since not to do so would be to “waste the
money” spent on him
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Example #2: “Recency” Effect
• Recent experience biases judgment
• May be the most available information
• “Things are different this time”
– Dot Com bubble of the late 90s – entrepreneurs did not
have enough experience with speculative bubbles to
recognize one. In their judgment, older business
leaders “just didn’t get it”.
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Example #3: Confirmation Bias
• After a point, additional information gathered to help
make a decision does not add anything to the
process (see graph)
– Confirms us in already reached decision.
– Information is discounted that does not agree with
already reached decision.
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Confirmation Bias
Assumed Relationship
Actual Relationship
Probability
Of Correct
Decision
Amount of Information
Considered
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Example #4: Hindsight Bias
• Remember the wins, forget the losses
• Tends to become greater with passing time
– Polls taken after an election sometimes show that a
higher percentage of people claim to have voted for the
winning candidate than the actual election results
demonstrate
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Additional Methodology Necessary
Analytical Methods
Expert Judgment
(Qualitative)
Quantitative Methods (w/
Expert Generated Data)
Quantitative Methods (w/
Empirical Data)
Structured Analysis
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Structured Analysis
• Technique by which internal thought processes are
externalized for purposes of:
– Sharing
– Critiquing
– Expanding upon ideas
• Breaks down problems into specific parts
• Specifies step-by-step process for dealing with the parts
• Ensures effective communications at the problem-
solving level
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Structured Analytical Techniques
• “Technique” preferred to “Method” because it is a guide
rather than a way of determining a definitive answer
• In practice, these techniques together form a
methodology
– Principles
– Procedures
• Helps counter current analysis issues
• Supports team approach
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Structured Analytical Techniques
• Based upon
– Understanding of cognitive limitations
– Previous mistakes and negative consequences
– Need for decision makers to understand how conclusions
were reached
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Classification by Analysis
Implementation Stage
Structured Analytical
Techniques
Divergent Techniques
Convergent Techniques
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Classification by Approach
Structured Analytical
Techniques
Diagnostic Techniques
Contrarian Techniques
Imagination Techniques
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More Recently…
• One more recent breakdown uses eight (8) tool
categories (next slide) utilized across twelve (12) types
of analysis circumstances, including situations such as:
– Defining a Project
– Understanding Data
– Monitoring Triggers
– Predicting the Future
– Seeing Other’s Points of View
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8 Tool Categories Decomposition
and Visualization
Idea Generation
Scenarios and
Indicators
Assessment of Cause and Effect
Challenge Analysis
Conflict Management
Hypothesis Generation and Testing
Decision Support
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Defining a Project
• Decomposition and Visualization
• Idea Generation
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Understanding Data
• Decomposition and Visualization
– Chronologies and Timelines
– Sorting
– Network Analysis
– Mind Maps
– Concept Maps
• Idea Generation
– Cross-Impact Matrix
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Monitoring Triggers
• Scenarios and Indicators
• Challenge Analysis
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Predict the Future
• Scenarios and Indicators
• Hypothesis Generation and Testing
– Analysis of Competing Hypotheses
• Assessment of Cause and Effect
– Key Assumptions Check
– Structured Analogies
• Challenge Analysis
• Decision Support
– Complexity Manager
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Seeing Other Points of View
• Assessment of Cause and Effect
– Key Assumptions Check
– Role Playing
– Red Hat Analysis
• Challenge Analysis
– Red Team Analysis
– Delphi Method
• Conflict Management
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Full List – Twelve Analysis
Situations
• Defining a Project
• Identifying Key Factors to Consider
• Understanding Data
• Explain a Situation
• Monitoring Triggers
• Developing/Testing Hypotheses
• Assess Possibility of Deception
• Predict the Future
• Challenging Ways of Thinking
• Seeing Others Points of View
• Managing Conflicting Opinions
• Assisting in Choosing Between Alternate Courses of Action