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What We Liked

A valuable lesson in structured decision analysis

To explain the decision analysis process, the authors describe an incident taken from the well-known children's book Winnie the Pooh.[6] Because it is so illustrative of the process as well as being charming, we have extracted the authors' description of the story, with corresponding decision analysis headings:[7]

Phases of the decision analysis process
As you may recall, Pooh dropped in on Rabbit one day and ended up jammed in Rabbit's doorway after helping himself to all of Rabbit's honey. For Pooh, it was supposed to be a very short project:

1. Visit Rabbit;
2. Consume honey; and
3. Go home.

But Pooh, being Pooh, ate too much honey during the "consume honey" activity.

This is a good example of the psychological bias of overconfidence. As a result of this event, the trivial activity ("go home") could not be accomplished as scheduled, for Pooh was firmly wedged in the doorway. Now Pooh and his friends had a decision to make: They had to select the best alternative to solve this problem.

Christopher Robin's project team

PHASE 1 - Decision Framing
Step 1.1 Identifying potential problems and opportunities
In our Pooh example, the problem was clear. Pooh was stuck and was not happy about it (neither was Rabbit). Both of them need Pooh to be removed from Rabbit's house as soon as possible.

Step 1.2, Assessing the Business Situation
Who or what could be used to get Pooh out of his predicament? Of course, it could be Christopher Robin and Pooh's other friends. Wise Owl also had some project management experience. In addition, Gopher had the expertise and tools to provide some engineering work.

Step 1.3, Determining project objectives, tradeoffs and success criteria
In Pooh's situation the success criteria were:

• Remove Pooh from the doorway as soon as possible.
• Do not harm Pooh during this process (safety concern).
• Do not damage Rabbit's dwelling.

Step 1.4 Identifying Uncertainties
In this project, i.e. removing Pooh, we primarily have uncertainties in time, as well as uncertainties in cost.

Step 1.5 Generating Alternatives
Pooh needed to be removed one way or another. He could not be stuck in Rabbit's doorway forever. Therefore, project scope was a constraint. There was, however, the possibility of bringing in additional resources to accelerate the project. As a result, we have three potential project scenarios:

• External contractor Gopher digs out Pooh.
• Gopher blasts Pooh out with dynamite.
• Christopher Robin's suggestion waiting until Pooh loses enough weight and is slim enough to slip through the doorway.

PHASE 2 - Modeling the situation
Step 2.1 Creating Models for each project alternative
In the Pooh removal project, a schedule for each alternative was needed.

• Based on Owl's request, Gopher estimated the duration of the excavation alternative. He did a review of the site and performed some exploratory excavation. He estimated that the work would take two or three days. He also performed a cost analysis. He based his calculation on his hourly rate and estimated project duration. He also added overtime and 10% for contingency.
• Gopher estimated that using dynamite would lead to a quick removal of Pooh, but with uncertain effects on Rabbit's doorway and Pooh's rear end.
• The slimming alternative, suggested by Christopher Robin, seemed to have the least risk and cost, but the longest duration.

Step2.2 Quantifying the uncertainties

• Gopher estimated the uncertainty in duration of the excavation as a range (between two and three days).
• The blasting alternative had minimal uncertainties in estimating duration.
• There were several uncertainties with the last alternative (Pooh's slimming down). Nobody knew for certain how long before Pooh's stout frame would melt away enough to free him from the door. They were also faced with the prospect that Pooh would continue to eat (on the sly) during the course of the project. That risk, which should be given both a high impact and a high probability, could significantly increase project duration.

PHASE 3 - Quantitative analysis
Step 3.1 Determining what is most important
In the Pooh situation, the risk associated with feeding Pooh would probably have the most effect on the project duration and was therefore a critical risk. To mitigate this risk, Rabbit set up a poster, "Do Not Feed Bear."

Step 3.2 Quantifying risks associated with the project
Here is the result of the analysis of Pooh's project based on the success criteria identified during the decision framing stage. There were three alternatives:

1. "Excavate Pooh." There was a 100% chance of damaging Rabbit's home, a significant chance of harming Pooh, and a very significant chance that the project would be completed within a few days.
2. "Blast out Pooh." There was a 100% chance of damaging Rabbit's home, a very significant chance of harming Pooh, and a very significant chance that the project would be completed almost instantly.
3. "Slim down Pooh." There was zero chance of damaging Rabbit's home, zero chance of harming Pooh (although he might have an extended period of relative deprivation), and large uncertainties in the project duration.

Step 3.3 Determining the value of new information
For example, Gopher needed to estimate the duration of the excavation project to remove Pooh from the doorway. Gopher could perform exploratory excavation, but it could be costly and time consuming. This analytical technique helps establish the value of new information how much money can be saved if additional information is obtained through an exploratory excavation.

Step 3.4 Deciding on a course of action
In the Pooh example, the decision was based on multiple criteria. The safety of Pooh was the first priority; therefore, the blasting alternative had to be rejected. The excavation alternative was also rejected because it did not provide adequate safety and could cause substantial damage to Rabbit's house. Therefore, despite concerns about project duration, the slimming down alternative was selected.

Interestingly, in a Russian cartoon version of the same Pooh story made in the early 1970s, Pooh's friends and Pooh himself decided that he would not be able to withstand the deprivation imposed by the slimming alternative, so they just yanked him out, causing a great deal of structural damage to Rabbit's house in the process.

Does this say something interesting about the differences between Western and Soviet psychology? Or perhaps the producers of the cartoon were on a limited budget and decided that having the characters forcefully dislodge Pooh was cheaper to produce and therefore a better choice.

PHASE 4 - Implementing, monitoring and review
Step 4.1 Project implementation and monitoring
Pooh's friends continually checked Pooh's slowly shrinking girth, trying to estimate when he would be slim enough to pop out. Eventually, when their measurements indicated that the time was ripe, they managed to extract Pooh without damage to either Rabbit's home or Pooh himself.

Step 4.2 Review of the decision experience
Apparently, in this situation, the decision was correct. Some small things could have been done better. For example, the sign "Do Not Feed Bear" could have been installed at the beginning of the project rather than after Gopher's offer of food to Pooh.

Interestingly, it is not until page 214 that we learn that activities can have different "states"[8] and that this "state" can serve as a precondition for a certain event. A precondition implies that an event can occur only if the activity is in a certain state. In addition, preconditions can be related to certain environmental factors.

So, in our Winnie the Pooh example, Pooh was trying to exit Rabbit's house and became stuck after consuming too much honey. The event "Pooh stuck" has the precondition "very narrow doorway." As you can see, "very narrow doorway" is not an event; it is an environmental factor. But without a narrow doorway, the risk "Pooh stuck" could not have occurred.

Sometimes, if you want to mitigate a risk, it is enough to remove the preconditions required for it to occur. In this case, if Rabbit had widened his doorway before Pooh's visit, or hidden his honey, the event "Pooh stuck" would not have occurred!

But in any case, we ourselves are not satisfied. It is our view that in Step 1.5, Generating Alternatives, Christopher Robin's project team failed to do due diligence in identifying all the feasible alternatives. There is one that would have had immediate effect, do no more than temporary discomfort to Bear, and release him in short order with the added advantage of teaching him a lasting lesson. That choice? Give Bear a massive dose of purgative!

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