In 1981, a team of scientists, engineers, academics and business professionals set out to create a new kind of management consulting firm—one that would harness the power of decision science to help organizations choose the best course of action in the face of uncertainty, daunting complexity, confused preferences, and interrelated variables. The name of the new enterprise: Strategic Decisions Group.

Building on Decision Analysis (DA). Having emerged as a field of practice within decision science in 1964, decision analysis was a relatively new concept when SDG was founded.  Dr. Ronald Howard of Stanford defines DA as “the discipline comprising the philosophy, theory, methodology, and professional practice to formalize the analysis of important decisions.”

Decision Quality (DQ). By 1984, DA for specific decision situations had evolved into an established set of practices and tools, and the advances in computer modeling was making it possible to address portfolio decision problems. However, converts to the Total Quality Movement (TQM) were challenging DA’s relevance. In reevaluating its approach to DA, SDG recognized that “if you deal only with analytical complexity, you can get the ‘right’ answer—but nobody cares. Conversely, if you facilitate only in the face of organizational complexity, you can resolve conflicts and gain agreement—but it may be agreement around nonsense.” It takes more than gaining clarity to achieve a good decision.

We use DA to get to the right answer. But we recognize that in complex organizational settings, it is likely that multiple parties with different perspectives, motivations, and biases need to be involved in key decisions. We thus incorporate insights from behavioral science and an understanding of organizational dynamics—the culture, governance structures, processes, and skill-sets that enable organizations to gain alignment and commit to action on complex, high-impact decisions. The role of decision professionals must include responsibility for assuring the quality of the inputs to the decision.

DQ today. With DQ, we approach every problem through the double lens of organizational and analytical complexity, making it possible to find and commit to the course of action that “gets us the most of what we truly want” in difficult decision situations. The principles, practices, and processes of DQ can be applied to individual decisions as well as resource allocation in portfolios of decision situations. Full adoption of DQ for an organization has a transformative effect on the behaviors, governance processes, support staff, and tools related to decision-making. The benefits can be enormous.