Charlie Alfred’s Weblog

Value Modeling Intro

Organizations, collaborations, and technology-based systems all share some important characteristics:

  • They are all intentional systems.  In other words, they are a collection of interdependent parts with the ability to choose how to achieve many goals at one time
  • In order to fulfill their intent, they need an effective overall strategy and detailed design.
  • The intent of the system frequently is influenced by entities which fall outside of the system (aka stakeholders).
  • In most cases, there are many such entities, and they often don’t have the same wants and priorities.
  • A system and its stakeholders exist within a larger environment, which constraints each party’s behavior and frequently drives their intent.

A common approach to making strategy and design decisions for a system looks something like the following progression.  In many cases, results from downstream process steps are used as feedback to alter upstream process steps:

Vision => Objectives => Requirements => Design => Execution

The steps in the above sequence have something quite interesting in common.  Do you see what it is?

These steps are all decisive.  They are all results-oriented.  They all represent definitive, conclusive activities.  In other words, they are (or ought to be) the end result of a carefully considered thought process.  This thought process should represent a progression of questions:

  • Why?       Why are we heading in this direction?   Why will other people want what we offer?
  • What?      What capabilities will we offer?  What will we do when problems occur?
  • How?       How will we provide these benefits? How will we overcome obstacles?

When viewed in this light, four things should be clear

  1. Decisions at every step in this progression must face constraints and uncertainties.
  2. Constraints usually force tradeoffs – give up some of one thing in order to get more of something else.
  3. Uncertainties lead to risks, which if significant enough, force more tradeoffs – give up something now to protect against the chance of something worse later.
  4. Even though why drives what and how, tradeoffs involving how are critical for what and why.

As a result, the process of formulating strategy and design for a system requires expertise in a number of subject matters.  For example, some of the domains which a local restaurant must master are: advertising, customer service, food preparation, procurement (food and supplies), health requirements, and accounting. 

The complexity of these subject matters depends on how many there are, how interdependent they are, and how deeply they must be understood to spot key tradeoffs.  When this complexity is relatively low, a solution-oriented, top-down decision process (e.g. Vision => Objectives => Requirements => Design => Execution) can work pretty well, even if several people are involved.  This is because the participants are able to find common ground with which to communicate, and manage tradeoffs and risk.

However, as complexity increases, the top-down, solution-driven process becomes much more difficult to perform effectively.  If you’ve ever watched several people (who focus on different subject matters) argue about a solution, you know precisely what I mean.  While Steven Covey advised us to “begin with the end in mind”, he also advised us to “seek first to understand, then to be understood.”  Discussions focused on making decisions are necessary, but not sufficient.  In order to make effective decisions, the problem must be well understood.

Value models are a set of techniques which address the problem describe above.  The next few blog entries will describe the core concepts, and show why value models are an important tool for people who influence or define the direction for an intentional system.

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2 Comments

  1. Although not strictly related,I have recently been thinking about the decision process myself, focused on a different aspect. The thing is, the decisions such as the ones you mentioned are important ones, which need to be communicated. Most of the time, thing being communicated is the decision result, but not the data or process that results in the decision itself, which is far more important, in order to share the decisive points and also to learn from wrong decisions.

    I think if a methodological approach is used regarding decision making and is collaborated the right way, having many parameters may be less painful.

    Some more thoughts:
    http://xwiki.atcevik.com/xwiki/bin/view/Main/LackofDecisionMakingStrategy
    http://xwiki.atcevik.com/xwiki/bin/view/Main/ThoughtsaboutaDecisionMakingMethodology

    Comment by Alp Timurhan Çevik — May 10, 2009 @ 6:22 pm

    • Hi Alp,

      I really liked the two links you left for me, and I posted a comment on each. Value Modeling and Rational Decision Processes do share a lot in common, in spite of the fact that their focus differs.

      In fact, I’ll bet that if you have a group decision where each decision maker exposes their thought process, you would be able to use value models to identify the differences in their preferences. Or, if the purpose of the group decision was to make a proposal to a 3rd party (e.g. customer, executive), then you could also used value models to identify the objectives of the decision..

      Best Regards,
      Charlie

      Comment by charliealfred — May 11, 2009 @ 12:29 pm


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