76 of 82 people found the following review helpful
on February 22, 1999
I had the pleasure of reading this book last year as assigned material in a graduate business course taught by Ralph Keeney. My degree is in information systems management and, frankly, I took Managerial Decision Analysis only because I needed 3 elective credits to graduate. In retrospect, however, the course was among the most beneficial to me and Smart Choices was certainly the most relevant book I read in graduate school. I say it was the most relevant because it demonstrates how to define problems and make decisions not simply as a business leader, but as an individual. The PROACT approach is a valuable tool for making formal decisions like "Which career path should I choose?" or "Which software package should I recommend to my client?" But the mentality that the approach engenders is pervasive. You will find yourself unwittingly applying elements of it to questions like "How should I spend time with my kids this weekend?" or "What is the best Valentine's Day gift for my wife?" The greatest benefit to me has been the piece of mind that comes with knowing that I don't just make better decisions -- I am now a better decision maker.
42 of 44 people found the following review helpful
on July 1, 1999
I have read many books on decision analysis - however, the 3 authors managed to condense the most relevant points in one book, without academic speak. The famous Kahnmann & Tversky's Heuristics and Biases are nicely summarised in the final chapter. The case studies are easy to relate to. Definitely a professional book written for the layman. No need for a PhD to understand this!
36 of 39 people found the following review helpful
on January 29, 2000
This is an excellent book. The title may make this appear to be one of the too-numerous mass-market books which claim to offer advice on business and personal decision-making but actually offer lots of specific admonitions which are based on values which the reader may not share (example: anything by Steven Covey). This book, however, doesn't try to sell you any of the the authors' values; instead it teaches you an effective process that you can use to analyze any decision-making situation and make the choices which are most effective for achieving your objectives, whatever they may be. The book treats the subject in the same systematic way that it might be treated in an academic decision theory text, only it is written in plain language which can be read quickly and easily comprehended by the general reader. It finishes with a summary outline (they call it a "roadmap") which is a useful quick reference.
16 of 17 people found the following review helpful
There are a lot of books about decision making and problem solving, and the vast majority of them are mediocre. There are a number of decent, readable accounts that give some simple tips and teach you about psychological principles, but these typically have very little in the way of solid tools. We all know it gets boring when the math starts or when we have start doing drills to learn basic skills. And the more specific they get with their methods, the less useful it becomes for our own problems. Books that cater to our creative side can help us learn how to break out of ruts, but they are weaker on helping us make good decisions more consistently.
Then there are systematic formal approaches by academics based on mathematical techniques, and these tend to be the equivalent of textbooks. Decision theory, mathematical modelling, strategy, optimization, probability, statistics, etc.. Great stuff. You can get a lot out of them if you put in the study, as far as useful tools and skills for hypothetical problems, but actually applying their lessons when you face a real problem is another matter. And as with most academic learning, practical transfer is left as an exercise for the reader. Also applying formal methods in situations where we already have good instincts, that often rubs us the wrong way. Using a spreadsheet to choose a mate? If you actually were to study systematic decision making and acquire the skills and habits for using those tools, you would surely make more decisions more consistently. But would you be wiser at knowing when to use these methods?
Smart Choices is closer to the first type of book, a practical guide to principles, but it has the soul of a textbook. No footnotes, bibligraphy, or exercises. But it does treat the subject matter very seriously. Maybe that's also part of why many of the reviewers on Amazon found the book boring. The authors' discipline in focusing on what really works while building on solid theory is clear throughout the book. As a result of this unique approach, this book has two great strengths in my opinion.
First, it is a surprisingly concise and admirably simple presentation of decision theory, with virtually no mathematics required. That's a signficant accomplishment in itself. The authors are deep experts in the technical aspects formal decision making, but have chosen a small set of simple tools to illustrate very general principles. When dealing with uncertainty, you create a risk profile for each alternative, listing the likelihood and consequences of each outcome for that alternative. Ok, not exactly rocket science, but who among us ever thinks of actually doing that to help them think through uncertainty? If you can't decide from the risk profile, you create a decision tree by identifying the things you can control and the things that remain uncertain, and their consequences. Very basic tools and advice and very powerful, with some practical advice for dealing with the messy details. It isn't so much the tools themselves that are the point here, it is the straightforward advice the authors offer on how and when to use them. There is a lot of experience condensed into a small book here.
The second strength of this book is that the authors make an unusually successful effort to bridge the different kinds of decision making genres, offering not only the outline of a formal process to guide you and specific tools to use within the process, but very clear practical explanations of why the steps are done as they are. The book begins with the usual mantra of systematic decision methods: having a process is better than not having a process. Sort of like having a map is better than not having a map. Ok. But before they jump into the how-to part that makes this a small practical guide, they also make their process criteria explicit. The process must help you to:
1. Focus on what's important
2. be logical and consistent
3. acknowledge objective and subjective factors, and blend analytical with intuitive thinking
4. require only as much information and analysis as neccessary to resolve the dilemma
5. encourage and guide the gathering of relevant information and informed opinion
6. be straightforward, reliable, easy to use, and flexible
This sounds great, but how can a formal decision process accomplish these things? And do the authors really provide one that manages this feat? It is their systematic and serious attempt to actually meet these 6 criteria, and their relative success at achieving it that makes for the greatest strength of this book.
The way they attempt this is to define each of their process step in very flexible terms, focusing on the critical relationships between the factors. Some trigger leads you to a loose problem definition with its associated concerns. The problem definition helps you identify means objectives (how you intend to meet your concerns). Means objectives help you figure out your more fundamental objectives. The objectives help you generate alternatives that meet those objectives. Analyzing consequences in various ways helps you evaluate the alternatives and even go back to generate new ones. Alternatives often have consequences that meet different objectives in different ways, so we have ways of helping to make tradeoffs. There is a lot of theory and experience buried into these seemingly simple ideas, and it would be very easy to miss the value of this if the reader hasn't seen decision theory done less expertly in many other books. It is very easy to make the process too simple, too complicated, too rigid, or not provide enough guidance. I think the authors get it pretty much just right.
The reason it works in this book, in my opinion, is that by explaining the process in clear terms and not just providing the tools, the flexibility of the process becomes much clearer. It becomes obvious from the examples why you want to keep looking for better alternatives even in the later stages of the process, even as you eliminate alternatives that just won't work or just aren't as good as others. It becomes clear where and how to consider uncertainty. It becomes more evident where various thinking traps make their way into the process by causing us to persevere at the wrong problem, by not considering important objectives, but not looking closely enough at the consequences of each alternative, by not considering tradeoffs, by missing relationships between decisions, or by failing to account for your own personal risk tolerance. The guidelines for the process help you avoid each of these problems by helping you focus on the right things at the right point in the process, but without making it so rigid that you fall into a completely different trap.
There is no magic problem solving or decision making method that will solve your problems for you, but following the advice in this book will at the very least help you focus on the right things, ask the right questions at the right time during the process, and help explain your decisions better to others as well as to yourself. There are books that provide more details on specific tools, but this book stands out for its clear and practical presentation of the overall process of making decisions.
30 of 35 people found the following review helpful
on September 30, 2009
The first 75 pages or so of this book are pretty boring. As someone else noted, immediately after reading them you wonder what it was you just read, because the writing feels very meaningless. The one message I took away from it was, carefully think about how you phrase a problem. True enough, but that is also kind of obvious.
One thing especially annoying about the book was that they role-played with a couple seeking to buy a new home because they were having a new baby. The problem as they describe is whether to renovate, buy a new home, if so which home, etc etc. The examples, although real in some aspects, do not go into enough depth. The case studies such as this one feel artificially canned to demonstrate a point. The case studies could have been a LOT better throughout the book, and would have made the book from an OK product to something really good.
Methods in this book, although systematic and useful, don't directly map to real life. They do however point you in the direction you need to go, which is to start writing things down in a clear coherent fashion (in terms of stating problems), and creating tables to visually see solutions to these problems compared against each other.
This book gets pretty good when it gets into the process of comparing alternatives. The ideas about putting solutions into tables, assigning numerical values to qualitative information, and then eliminating dominated alternatives is great. It clearly illustrates how to compare direct alternatives to each other, and there is very little room for screwing this up. Really good stuff, made the book worth reading.
After that however, I don't really buy into their risk analysis section. The assumptions behind the risk forecasting aren't clearly articulated and I'm not so sure that the future can be forecasted with percentages at ALL (as in a 40% chance that I win a lawsuit). I have a very high degree of skepticism to any numerical forecasting done in this fashion.
The linked decision section is not that great either.
In the end what makes this book really good is demonstrating how to compare direct alternatives - i.e. if you have a choice between 4 houses, or 3 jobs, or 6 car mechanics - this book will show you how to narrow it down to 1 choice in an extremely well thought out and articulated manner. I guess it makes the book worth reading, although much of the rest of it is boring.
My only criticism is that often times choices, (the choice of a job for example) will necessarily involve other decisions, such as what city to live in, what apartment or house to rent, that are tightly interwoven... Moving from top level decisions to bottom level decisions (like city first, then job, then apartment) is not always so clear cut. For example, the same decision tree could be (job first, city second, then apartment). Better case studies with a bit more complex problems would have helped a little bit in this regard.
26 of 30 people found the following review helpful
on April 10, 2005
The authors of the book "Smart Choices" (Hammond, Keeney and Raiffa) look at decision making as a disciplined informational affair. If you gather information according to their template you will make better decisions about some things. But they give only passing mention to the fact that decision-making is largely a psychological affair. Information handling (the topic of the decision) is opposed by psychological (emotional) determinants of decision-making. In the gap between these two factors, most people are driven more by emotions than by "rational factors" about information.
The motivation in decision-making is about what people want. The choices made are the expressions of motives - and motives are, by definition, psychological machinery. Psychological machinery is emotional. Period. If you consider the logic of TV's CSI show or Lieutenant Columbo, for example, any behavior depends on three things: motive, means and opportunity. The authors of this book have concentrated on the means for making a good decision. Opportunity to make a decision is taken for granted. But they have deleted the systematic emotional bias that disables so many motives of so many people so much of the time.
The downside of this excellent book is that the authors use the outline of their book in a way similar to the way pilots use a preflight checklist - to insure they will operate the machinery of their aircraft properly. Few human and interpersonal situations respond to "checklist logic". People are not normally as well organized as a well-maintained aircraft. People reach closure on decisions with emotional logic independent of the literal facts - in more cases than not. People have strong emotional habits and those emotions dictate the choices, not the information. That is, emotions frame the overall decision-making stage which relegate "rational" checklists to bit players in the story of the decision process. Relatively few individuals are able to shift the balance toward the rational end of the gap and away from emotional dominance. Emotional tune-ups, done by a trained professional, do more to improve decisions than any rational checklist possibly can.
52 of 63 people found the following review helpful
I am a corporate strategy consultant and an author of business books and articles. As a young man, I was taught all of the techniques described in this book in their most complex form. I loved the ideas, and have used them with great success for the last 30 years. Professor Raiffa is someone I admire greatly, as a result. I was delighted to find that this book addresses these complex tools in their simplest possible form, and applies the lessons to everyday living (especially the most important decisions that most people have to make). I immediately bought copies for everyone in my family as a way to help coach them in how to have more effective lives. You should do the same. I also suggest that you use the book as a model the next time that an important decision comes up that your whole family should participate in. This will not only help you develop better choices, but it will greatly improve the communications in your family about the decision. I strongly hope that the authors will write a similarly simple version for business people. I know a few hundred people to whom I would like to give such a book.
25 of 29 people found the following review helpful
on April 12, 1999
When I started reading this book, I was bored and disappointed with the examples. The process of decision making -- problem, objectives, alternatives, consequences, and tradeoffs -- seemed obvious. And the examples were silly: Should John and Jane Doe buy a house? I wasn't interested, but when I continued reading, some parts, such as the chapters about risk and uncertainty, grasped me. I also found that just enumerating the decision making process made it a lot easier. The PrOACT solution is very intelligent. Even if you've never heard of decision theory, you use the system. By quantifying it and understanding how you make decisions, you'll naturally become a better decision maker. You'll know that there are alternatives to eating the whole cheesecake, or what the real reason you're putting off that assignment is. I run a website, called the Wall Street Wizard, [...] and it's helped me craft a better, more perceptive site because of my decisions on a daily basis. And it can help you. One of the best decisions you'll make is to buy this book.
11 of 11 people found the following review helpful
on February 11, 1999
As an executive I am faced with making key decisions almost every day. In many complex decisions there is almost always conflict between logical analysis vs. intuitive processing while there is a shortage of perfect information and time. Smart Decisions lays out a simple, clear and practical framework and process for decision making. Although many of the concepts are not novel, the power is that the book links various tools and technigues as discrete decision making steps. Each step builds on the next. They greatly enhance the concepts through many practical examples for making business and personal decisions. I highly recommend this book!
17 of 19 people found the following review helpful
on September 2, 2005
Many have written extensive reviews on this book that I believe are accurate. Using the relevant decision research, the authors have successfully produced this accessible guide. The book is a practical introduction to decisions for anyone interested in approaching problems in business and life in a structured manner. While footnotes do not appear, related research confirms the validity of the authors' methods. For an introduction into the research, I recommend the Harvard Business Review on Decision Making from the HBS Press that includes a paper by the authors detailing the even swap method.
My only criticism is the compressed feel of the text particularly in the "Uncertainty" and "Linked Decisions" chapters. For most of the book, the authors did an outstanding job of condensing a great deal of information into a flowing, informative book.