CHAPTER 6

Framing the Decision

A decision frame is a decision aid that can be used while making a decision to capture important information, and it presents a snapshot view of critical elements the project manager should consider in making a decision. A decision frame defines the context for the decision and the elements (alternatives, objectives, uncertainties) that are part of the decision situation. Most decisions made by people are based on a few seconds (or less) of thought. The idea of creating a conscious decision frame or documenting the decision frame for most decisions is not even an afterthought. For those decisions that can be scrutinized by management, auditors, an Inspector General, regulators, or a court, however, it is becoming clear to many people that creating some sort of audit trail for decisions is a wise thing to do.

A decision frame is such an audit trail because it documents what is known, why the decision is important, what alternatives and objectives are being considered, and why the chosen alternative is considered the best. Some explicit consideration of the decision frame just makes sense for the most important decisions made by project managers.

This chapter presents the following sections:

The Importance of Decision Frames

A Suggested Frame

Suggested Decision Frame Format for Project Management.

The Importance of Decision Frames

Decision frames have been shown to exist in people’s heads in psychological experiments; these same experiments have shown that the choice of a decision frame can dramatically affect how a person thinks about a decision and shapes the decision that is made.

Consider the two choices provided by Tversky and Kahneman (1981) in an experimental setting:

In this case everyone chose F because it dominates E (the probabilities are the same but the outcomes in F are always better than the outcomes in E). However, if we add A and D together (the preferred choices of most people), we get E (the dominated choice). Similarly, if we add the less attractive choices B and C above, we get the dominating choice F.

The lesson of this experiment is that framing a choice in terms of gain pushes people toward the certain decision, while framing the choice in terms of a loss pushes people to choose to gamble. Yet most people are risk averse and prefer to avoid gambles.

Different people commonly view the same decision through different lenses. The optimist says a glass half full and half empty is “half full,” the pessimist says it is “half empty,” and the engineer says “the glass is twice as big as it needs to be.” Russo and Schoemaker (2002) point out the following:

Training employees can be viewed as a cost or as an investment.

A negotiation can be viewed as a competition (win-lose) or as joint problem-solving (win-win).

What is important to keep in mind here is that there are many ways to think about how to make a decision, sometimes called the “meta-view” of a decision situation. Selecting one way to think about the decision, e.g., expenditure versus investment, can drastically affect the way the decision maker approaches a resolution. There is no “right” answer, but some answers can be much more productive than others. As a result, many successful people and researchers recommend trying multiple meta-views or frames for a specific decision situation before selecting one view to use in approaching the decision.

It is often useful from the perspective of creativity to view the decision being faced from a different perspective. Fairhurst and Sarr (1996) described the following framing techniques:

Metaphor: Gives a decision a new meaning by comparing it to something else.

• A metaphor for a decision to invest in researching a new technology could be either an insurance policy or a gamble.

• A metaphor for a decision to replace the current chief engineer could be replacing an old automobile with a station wagon, a sedan, or a sports car.

• A metaphor for the system architecture is either the blueprint file for a house or an artist’s sketch of a new subdivision.

Story (myths and legends): Frames a decision by anecdote in a vivid and memorable way.

Slogan, jargon, and catchphrase: Frames a decision in a memorable and familiar fashion.

Contrast: Describes a decision in terms of what it is not.

• Documenting the requirements for a system is not carving the requirements in stone.

• Implementing a cut in the budget is not extending the project to meet new needs of stakeholders.

Spin: Talks about a concept so as to give it a positive or negative connotation.

A Suggested Frame

Figure 6-1 displays a metaphor decision frame, conceived around building a house, for any decision. After discussing this metaphor frame, we will particularize it to a project management context. The decision frame identifies the context in which the decision is being made, including the stakeholders, resource constraints, relevant environment, broad objectives, and some operational use cases for defining success and failure. The stakeholders for a new house are (1) the person or family paying for the building of the house, and (2) the company that is going to build the house. Other stakeholders that might be relevant include the neighbors and community in which the house is being built. Other stakeholders might include extended family members and guests who will be visiting and environmental activists who might be worried or delighted about the construction process or end result.

FIGURE 6-1: Metaphor Decision Frame—Building a House

Resource constraints include money and perhaps available land and types of equipment that can be used. If there are many trees or scarce plant or animal life on the land, resource constraints might include their protection.

The environment in this case is the water on or near the land, the road network, the relation of the sunrise and sunset to the site, and the average and extreme high and low temperatures. Broad objectives include living a comfortable, protected life and achieving financial goals.

Some use cases might be:

Great success: Over a 20-year period, the house had been easy to build and was affordable, there was plenty of room and comfort for a growing family, no loss of life or damage was caused by environmental emergencies (e.g., floods), many happy guests visited over many years, and a 500 percent growth in investment was obtained upon the sale of the house.

Modest success: Over a 20-year period, there was a need to expand the house or sell it due to growth of the family, minor damage was done to the house by an environmental emergency, some guests had to stay at nearby hotels due to lack of space, and there was a 200 percent growth in investment upon the sale of the house.

Modest failure: The house cost 20 percent more than was expected to build or an environmental emergency made extensive repair to the house necessary.

Major failure: The builder cannot complete the house for an affordable price, the family decides it is not comfortable in the house and has to sell it, or an unforeseeable environmental emergency destroys the house.

Based upon the broad objectives and the use cases, it is clear that there should be some fundamental objectives for the decision about building the house that relate to the cost of building the house, the daily quality of life (e.g., comfort, sufficient space), protection against environmental emergencies, potential costs to repair the house due to environmental emergencies, and resale value. Further reflection might yield additional fundamental objectives such as the aesthetics of the house, the monthly operating costs for the house if the cost of energy increases dramatically, and the ability of interested family members to grow a garden.

The alternatives for building the house might include two major issues: what style and size of house to build and where to build the house on the lot (including the orientation of the house relative to the road, the river, and the sun). Example style and size alternatives are shown in the middle of Figure 6-1. Similarly, examples of the location and orientation of the house are shown on the right side of Figure 6-1. Note that the selection of a specific alternative for one issue (Cape Cod with four bedrooms) can influence which alternatives in another issue (such as the location and orientation of the house) should be selected. It is sometimes not possible to make decisions in one category independently of those in another category.

Uncertainties can affect the quality of the decision dramatically in that some decision alternatives are designed to be low risk by being robust in the face of uncertain consequences. Other alternatives are more aggressive or risky in the face of these alternatives, requiring more energy during implementation and operation, as well as some cash reserves for fallback options in case the unexpected occurs. For the house metaphor, the uncertainties might include the financial position and experience of the builder, the likelihood of specific environmental emergencies, the zoning and growth potential of the nearby town, and the likely growth and interests of the family. So the location and orientation of the house is relatively low risk with respect to the risk issues just mentioned. However, it may be that some builders are not experienced at building a Cape Cod style house, but other house styles might have problems with zoning or environmental problems. So the selection of house type might be higher risk.

Finally, most decisions involve gathering and processing information. Some, but not most, of this information might already be in a database. Some information might come from experts or trusted colleagues. Some information might need to be obtained from people who are not as well known or trusted as we would like. Finally, some information is available from other sources and must be collected or purchased. Knowing as much as possible about what information is available and what is not, and what form the available information is in, will be quite helpful as the decision process proceeds.

Suggested Decision Frame Format for Project Management

Table 6-1 shows a Generic Decision Frame for Project Management, which is a data collection form for project managers to use in capturing the decision frame for important decisions they face. This generic decision frame is used in several cases studies throughout the remainder of the book.

TABLE 6-1: Generic Decision Frame for Project Management Decisions

The beginning of the decision frame helps define the context of the decision. Who is involved as a stakeholder? That is, who is making the decision, who might be affected by the decision, and who might be able to affect the decision? Are there any resource constraints? If so, what resources are involved and how significant are the constraints? What is the environment in terms of social, organizational, legal, and natural constraints or possibilities? What broad objectives should be considered in defining the objectives for this specific decision? Finally, what are some use cases—from complete success to complete failure—that might result from the decision? The elements of these use cases often provide information about the objectives and alternatives that need to be documented in other sections of the decision frame.

The Fundamental Objectives for Decision section addresses the fundamental objectives for this specific decision, and the Alternatives for Decision section addresses specific alternatives of the decision. The objectives are segmented in terms of the programmatic, the product or system of the project, and the life cycle of the product. In most cases, not all three parts of the life cycle will be relevant, but they are included to remind you that they might be more relevant than you initially think. Each of the categories of objectives is further divided into cost, schedule, and performance.

The Uncertainties section of the decision frame provides the decision maker with the opportunity to identify key uncertainties, and the Information Sources section addresses important information sources. Uncertainties will change as the decision situation evolves. Generally speaking, high-level managers and most project managers report that there is little relevant data for most of their decisions and that experts must be relied upon for their judgments to make up for that missing data.

An example of a decision frame for the Sidewinder case study, which was presented in Chapter 5, is shown in Table 6-2. The decision being addressed in this decision frame is how the Sidewinder design team should go about establishing the needs of the Sidewinder stakeholders at the beginning of the development process. (Note that this is just one of thousands of decisions made by the Sidewinder project manager, William McLean, who also served as chief systems engineer.)

TABLE 6-2: Sidewinder Missile Decision Frame

The Sidewinder was the first air-to-air missile developed for use by U.S. Navy fighter pilots. The program was initially unfunded and was started without formal permission by William McLean. He adopted a skunk-works approach (see the first use case in the decision frame in Table 6-2) at China Lake, an isolated Navy base in the California desert. A competing Air Force program called the Falcon took the opposite approach (see the second use case in the decision frame in Table 6-2).

The programmatic and system/product alternatives adopted by McLean are shown in italics on the right side of the decision frame. This approach was consistent with the skunkworks approach that he used because a funded program for the Sidewinder had not been initially approved. However, after the Sidewinder program was approved by the Navy, McLean kept to this skunkworks approach (“build a little, test a little”) throughout the entire program. The design team was able to interact with ship personnel and pilots as they rotated through assignments at China Lake. The China Lake team was able to design and perform a wide range of tests that focused on successful missile performance rather than programmatic success.

A great many uncertainties were associated with the new technologies employed in the Sidewinder missile. These technologies included a passive infrared homing system using proportional navigation that was built from vacuum tubes, the use of Canards (forward guidance fins) rather than tail-based control fins to maneuver the missile based on the seeker’s information, the use of “rollerons” to limit the roll rate of the missile during flight (by serving as gyroscopes), and a fragmentation warhead triggered by a passive infrared proximity fuse. Data to reduce the uncertainties and other data were collected by test programs at China Lake and competing contractor design teams scattered throughout the United States. McLean went after the best contract talent he could obtain after the Sidewinder became a funded program. He kept these contract teams competing with each other until the final design was formally fixed so that they were motivated to do their best.