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Showing posts with label decision-making. Show all posts
Showing posts with label decision-making. Show all posts
Friday, June 18, 2010
Shoot for a Star Even if You Miss
Courage and boldness, two attributes of a successful systems engineer and leader that make a difference between opportunity seizure and status quo. It is not always easy to make decisions that result in a big change, or address a big gap. Sometimes these decisions are needed. I am a big advocate of evolutionary development, meaning changes that occur in phases and evolve over time. However the decision to initiate that change and stay in the game until the end needs to be done with a sense of urgency. So lets look at an example to clarify the point.
You are a community leader and you notice that the rate of growth of your community membership exceeds your forecasted studies, and people will not be able to park their cars soon on property. The decision to expand the current parking space versus acquisition of a new satellite office for future growth is a major decision, and is not easy, but it needs to be made quickly. The solution implementation itself (parking or site acquisition) itself should be evolutionary.
So what does this have to do with courage and shooting for the moon? Well, a conservative systems engineer will propose a solution which entails the least risk. In the case above that might be to expand the parking area at a conservative rate each 5 years. A bold systems engineer might propose an immediate expansion, with a partnership with the church next door, and the charter for expanding the community center horizontally in another locality with the vision of spreading throughout the State within 5 years. That is a very different vision, one that requires commitment, radical change, motivation, dedication and courage.
Courageous leaders shoot for a shining star, and if they fail they know that their chance of landing on the moon - which is still an achievement - is high. They are willing to take the risk, to plan effectively, have a backup plan and will not settle for less than the moon.
Do you know have a vision of your star and do you know where is your moon?
You are a community leader and you notice that the rate of growth of your community membership exceeds your forecasted studies, and people will not be able to park their cars soon on property. The decision to expand the current parking space versus acquisition of a new satellite office for future growth is a major decision, and is not easy, but it needs to be made quickly. The solution implementation itself (parking or site acquisition) itself should be evolutionary.
So what does this have to do with courage and shooting for the moon? Well, a conservative systems engineer will propose a solution which entails the least risk. In the case above that might be to expand the parking area at a conservative rate each 5 years. A bold systems engineer might propose an immediate expansion, with a partnership with the church next door, and the charter for expanding the community center horizontally in another locality with the vision of spreading throughout the State within 5 years. That is a very different vision, one that requires commitment, radical change, motivation, dedication and courage.
Courageous leaders shoot for a shining star, and if they fail they know that their chance of landing on the moon - which is still an achievement - is high. They are willing to take the risk, to plan effectively, have a backup plan and will not settle for less than the moon.
Do you know have a vision of your star and do you know where is your moon?
Wednesday, June 03, 2009
Probability Distributions for Business Events - Binomial
System engineers and technical managers need to make decisions based on the probability of certain events occurring. For example during a risk assessment practice, the systems engineering might be calculating the risk value of an event, and based on the value of the risk level the organization will take certain steps to respond to the risk.
To accurately calculate the risk value which is calculated as the (impact level * probability of occurrence), the probability distribution selected needs to be accurate.
In some events outcomes could be binary, for example: good or bad, correct or incorrect, successful or failed, conforming or non-conforming. A suitable probability distribution would be a binomial probability distribution, using a binomial calculator the system engineer can calculate the probability of occurrence of one of the two possible events knowing the sample size (n), the rate of good versus bad, or correct versus incorrect (p) and the number of items (x) fitting a particular outcome. For example if we select a sample of six items from a batch which has a defect rate of 3%, we can find the probability that the sample has one defective item using the binomial formula
P(x) = [n! / x! (n-x)! ] p^x (1-p)^(n-x)
In the above example, n=6, p=0.03, x=1
Using the formula above or the binomial calculator available at Texas A&M, we get that P(1) = 0.1546
Stay tuned for other probability distributions that are also common in business environments.
To accurately calculate the risk value which is calculated as the (impact level * probability of occurrence), the probability distribution selected needs to be accurate.
In some events outcomes could be binary, for example: good or bad, correct or incorrect, successful or failed, conforming or non-conforming. A suitable probability distribution would be a binomial probability distribution, using a binomial calculator the system engineer can calculate the probability of occurrence of one of the two possible events knowing the sample size (n), the rate of good versus bad, or correct versus incorrect (p) and the number of items (x) fitting a particular outcome. For example if we select a sample of six items from a batch which has a defect rate of 3%, we can find the probability that the sample has one defective item using the binomial formula
P(x) = [n! / x! (n-x)! ] p^x (1-p)^(n-x)
In the above example, n=6, p=0.03, x=1
Using the formula above or the binomial calculator available at Texas A&M, we get that P(1) = 0.1546
Stay tuned for other probability distributions that are also common in business environments.
Thursday, May 31, 2007
Decision Making and Systems Engineering
Systems engineering is an interdisiplinary approach to enable the successful realization of systems. Learning the systems engineering process is not a complex task. The tough part of systems engineering is making decisions related to trade-off studies, and balancing among the different requirements, which could at many times be orthogonal and conflicting.
An effective systems engineer is one who can provide insights and advice related to technical decisions. This would occur as follows,
1. Ensuring requirements are clear, well understood, correctly prioritized, and motivation well understood
2. Modeling and simulation and developing what-if scenarios
3. Conducting trade studies and parametric analysis
4. Clearly defining interfaces and boundaries, their requirements and impacts
5. Comprehensive risk management and optimum risk handling
6. Justify changes to requirements, design, scope, resource demands and technology
7. System optimization to develop a best solution in situation where multiple aspects of a system can be optimized
8. clearly defining dependencies, integration constraints and alternatives
The value of the system engineer is not only implementing the systems engineering capability pattern, but also ensuring that true value is being realized through the implementation of the SE capability patten. This true value will be achieved through solid decision-making.
An effective systems engineer is one who can provide insights and advice related to technical decisions. This would occur as follows,
1. Ensuring requirements are clear, well understood, correctly prioritized, and motivation well understood
2. Modeling and simulation and developing what-if scenarios
3. Conducting trade studies and parametric analysis
4. Clearly defining interfaces and boundaries, their requirements and impacts
5. Comprehensive risk management and optimum risk handling
6. Justify changes to requirements, design, scope, resource demands and technology
7. System optimization to develop a best solution in situation where multiple aspects of a system can be optimized
8. clearly defining dependencies, integration constraints and alternatives
The value of the system engineer is not only implementing the systems engineering capability pattern, but also ensuring that true value is being realized through the implementation of the SE capability patten. This true value will be achieved through solid decision-making.
Wednesday, May 30, 2007
A World of Decisions
Very often we get challenged to make decisions on problems which have more than one criteria. This decision making process is referred to as "Multi-Criteria Decision Making (MCDM)".
MCDM defines two major classes for determining optimal decisions. The first known as Multi-Objective Decision Making (MODM), and the second Multi-Attribute Decision Making (MADM). Both classes could support single or multiple decision makers as well as multiple data types -deterministic, stochastic, or fuzzy.
MODM deals with problems in which the decision space is continuous. MADM on the other hand is used when solutions are discrete.
The key point in making decisions is not what one is deciding, but rather how the decision is made. The ability to make sound decisions is a fundamental life skill, each one of us experiences everyday.
To read further:
1. Tryantaphyllou, Shu, Sanchez, and Ray, "Multi-Criteria Decision Making: An Operations Research Approach", Encylopedia of Electrical and Electronics Engineering, John Wiley, 1998, pp. 175-186.
2. Hammond, Keeney, Raiffa, "Smart Choices: A Practical Guide to Making Better Life Decisions", Broadway Books, 2002
MCDM defines two major classes for determining optimal decisions. The first known as Multi-Objective Decision Making (MODM), and the second Multi-Attribute Decision Making (MADM). Both classes could support single or multiple decision makers as well as multiple data types -deterministic, stochastic, or fuzzy.
MODM deals with problems in which the decision space is continuous. MADM on the other hand is used when solutions are discrete.
The key point in making decisions is not what one is deciding, but rather how the decision is made. The ability to make sound decisions is a fundamental life skill, each one of us experiences everyday.
To read further:
1. Tryantaphyllou, Shu, Sanchez, and Ray, "Multi-Criteria Decision Making: An Operations Research Approach", Encylopedia of Electrical and Electronics Engineering, John Wiley, 1998, pp. 175-186.
2. Hammond, Keeney, Raiffa, "Smart Choices: A Practical Guide to Making Better Life Decisions", Broadway Books, 2002
Labels:
decision-making,
MADM,
MCDM,
MODM,
trade study
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