A new professional discipline has emerged: decision engineering. The roots of decision engineering lie in the teachings of Peter Drucker, Edwards Deming, Bill Linvill (Stanford), Ron Howard (Stanford), and Chris Argyris (Harvard.) The field rests on more than half a century of study, teaching, experience, and observation. As the publisher at Baker Street, I want to help define and promote this discipline.The opinions expressed here are my own. They reflect the thinking of several of my colleagues in and around Stanford University, notably Jim Matheson of SmartOrg.
Decision engineeris are needed to help make decisions involving large, high-risk capital investments like new plants, new processes, new products, new services, new technology, geographic expansion, or major infrastructure changes. Decision engineers are also needed in developing decision support tools, for example, “apps” to screen loans, detect fraud, and treat diseases. Decision engineers are also needed in the public sector. Our policy decision making is woefully in need of critical thinking and collaborative design, both engineering strengths.
So what distinquishes a decision engineer from all other engineers? First, and foremost, a decision engineer has a deep appreciation for the difference between a good decision and a good outcome. His or her foocus in on helping people make better decisions. The belief is that a good decision will increase the probability of good outcomes.
Difficult business decisions are complex, dynamic, and uncertain. Computer-based structural models are our strongest tool for dealing with complexity and dynamics. Decision engineers know how to build models, design algorithms, conduct analysis, and present the results. They are grounded in the fields of systems analysis, applied probability, and decision theory. A decision engineer is a Bayesian. (If you have to look up the term “Bayesian,” then you are not a decision engineer.)
A decision engineer understands the distinction between what is normative and what is descriptive. Normative is what we “should” do. Descriptive is what we actually do. Strategic decisons have two sides: a behavioral/social/political side and a technical side. On the behavioral side, we should be guided by the norms embedded in the Mutual Learning model. On the technical side we should be guided by the norms of rational decision making.
Decision making is about the future. A decision engineer is forward looking. When faced with an uncertain future he is comfortable using future-oriented tools like expert assessments, scenarios, and computer-based structural models.
Engineers know how to exercise judgment when data is not available. Decision engineers know how to help other people assign probabilities to uncertain events and overcome cognitive biases. In terms of Daniel Kahneman, engineers know how to “slow think.”
A decision engineer is familiar with two fundamental processes: the Decision Analysis process and the Collaborative Design process. The Decision Analysis process is appropriate when the decisions are difficult but there are not many stakeholders involved. The Collaborative Design process is useful when the stakes are high and many people are involved. The Decision Analysis process is at the core of the Collaborative Design process.
The decision engineer is comfortable using a broad range of tools: decision hierarchies, strategy tables, decision diagrams, structural modeling, sensitivity analysis, probability assessment, and decision trees.
Decision engineers are constantly improving their facilitation and project management skills. Decisons are made by people, often by groups of people. Strategic decision making has become a team sport. Often the teams are large, multidisiplined and multifunctional.
Decision engineering shares the same norms and ethics as established engineering fields. However, it is different enough that it deserves the attention of educators, business, and government. Some industries are heavily populated with decison engineers and coaches: energy, pharmacuticals, insurance, finance, healthcare, and transportation. I predict that someday decision engineering will become an umbrella for a broad range of decision professionals: decision analysts, systems engineers, industrial engineers, risk managers, and the list goes on. In my humble opinion, these are all variations of decision engineering. They all subscribe to the norms of decision engineering and they are focusing their attention on how decisions should be made rather than how decisions are actually made. They will converge on normative models of thinking and behavior.
There is ample evidence that decision engineers can move smoothly into strategic executive roles. Half of the CEOs in the United States are engineers. Decision engineering is a great platform for develping the experience and skills required to take responsibility for strategic decisions.
For more about decision engineering see my recent article in the IEEE Engineering Management Review, “A New Engineering Profession is Emerging: Decision Coach.”
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