1 Introduction

Multicriteria decision making (MCDM) is a structured collaborative process and analytical framework for making complex, high-stakes decisions involving competing objectives, multiple stakeholders, and significant uncertainties. It’s a powerful tool that helps decision makers identify creative, high value strategies for all types of technical projects and business initiatives. Most importantly, MCDM increases the likelihood of achieving intended outcomes.

MCDM can be used to markedly improve the decision-making process in any organization including public corporations, private businesses, and governmental entities. When used by public corporations and private businesses, MCDM helps identify strategies that not only increase the likelihood of achieving financial objectives but also of achieving other nonfinancial objectives valuable to the company and its stakeholders.

When used by government entities, MCDM helps identify innovative strategies for improving infrastructure, increasing efficiency in delivering public services, and enhancing recreational spaces, while increasing transparency and incorporating the public voice. Ultimately, MCDM can be used by government entities to create more sustainable societies.

1.1 Our Complex World

Although there are many reasons why businesses and government entities may choose to employ MCDM, perhaps the best is that it provides a structured process for making sound decisions in an increasingly complex, interconnected, and uncertain world. There are numerous sources of these complexities, interconnections, and uncertainties (hereafter referred to as complicating factors); some examples include:

• economic globalization,

• changing laws and regulations (domestic and international),

• climate change effects (e.g., water scarcity, draughts, wildfires, and severe weather),

• worldwide pandemics,

• social media impacts (both positive and negative),

• environmental and community activism,

• advances in information technology,

• changes in consumer values, and more recently,

• increased investor, and consumer, interest in how well companies perform regarding a host of environmental, social, and governance (ESG) metrics.

These, and other complicating factors, interact in ways that can affect both business and government by:

• creating supply chain disruptions;

• changing demands for

  • manufactured products,

  • natural resources, and

  • labor skills;

• increasing inflation and price instability;

• creating stock market volatility; and

• causing increases in unemployment in some areas and industries and labor shortages in others.

Given these complicating factors and their effects, corporate managers, private business owners, and government officials can no longer afford to make decisions based simply on costs and expected financial returns. They must now consider a host of other objectives including improving ESG metrics, and increasing sustainability, resiliency, and stakeholder satisfaction. In addition, business managers must ensure that their decisions are fully aligned with their company’s vision, mission, and values. Such alignment helps maintain investor confidence, customer base, and brand image. For government officials, this alignment helps increase overall satisfaction with public services. Lastly, to be truly successful, these managers and officials must assess the risks that might prevent them from achieving their intended objectives (even when making high-quality decisions) and take proactive measures to mitigate/manage such risks during implementation.

1.2 Is a Structured Decision Process Really Necessary? Common Objections

Many leaders, business executives, and government officials would likely agree that our world is becoming increasingly complex. Also, given this complexity, it’s likely that many would agree that making high-quality decisions has never been more important. However, as practicing decision analysts, we are aware that some leaders and managers, when presented with the concept of a structured decision process, will raise objections by making statements such as:

• “It’s my job to make good decisions.”

• “I can’t trust a computer program to make decisions for me.”

• “It’s possible to make decision models reach any conclusion that you want.”

• “Garbage in, garbage out.”

• “We have our own standardized decision-making process.”

In many ways, it’s understandable that a number of leaders, managers, and officials would raise objections and make statements such as those presented earlier. Therefore, it’s important that anyone attempting to promote decision analysis within their organization be prepared to respond to such statements. To assist with this preparation, each of the earlier statements is addressed in the following sections.

1.2.1 It’s My Job to Make Good Decisions

When the concept of a structured decision process such as MCDM is first presented to leaders, business executives, and government officials, some may feel that the promoters of the decision process are suggesting that these individuals have been making poor decisions. This is not the case. Any successful business, organization, leader, executive, or manager has achieved their success by having a track record of making good decisions. However, the question is not one of good decisions versus bad decisions, but of good decisions versus even better or higher value decisions.

1.2.2 I Can’t Trust a Computer Program to Make Decisions for Me

One of the myths associated with MCDM (or any decision process that involves the use of computer modeling and analysis) is that it requires the decision makers to blindly accept the results of analysis, i.e., that decision analysis and computer modeling will somehow replace the decision maker or undermine his or her value or authority. Rather than forcing decision makers to choose a particular alternative, MCDM provides the decision makers with new insights and information for making more informed decisions. MCDM does not replace decision makers; it simply provides them with information regarding the likely outcomes associated with the various choices, thereby enabling them to make higher value decisions.

1.2.3 It’s Possible to Make Decision Models Reach Any Conclusion That You Want

This statement is often made by those highly skeptical of decision models, or any form of data analytics for that matter. Such individuals recognize that by changing the weights of various decision criteria (indication of stakeholder preferences) as well as other important input parameters such as criteria scores, capital expenditures, operating expenses, sales volume, and product prices, one could make a particular alternative look more valuable than others.

Although it’s possible that an individual or group could manipulate a decision model by changing the input parameters until their preferred alternative outranks the others, a reasonable question is “what would be the motivation?” As we will see in Chapter 4, the MCDM process is designed to create a collaborative journey of inquiry with the destination of finding the best, highest value alternative. If the model is artificially manipulated to produce a predetermined result, this essentially undermines the whole point of MCDM, or any other decision support methodology for that matter. The decision makers and facilitators would instead be engaging in an advocacy-based approach rather than the MCDM inquiry-based approach to decision making.

1.2.3.1 Advocacy-Based Approach and Potential Effect of Cognitive Biases

The terms “advocacy-based approach” and “inquiry-based decision making” are well defined by David C. Skinner in his book, Introduction to Decision Analysis. According to Skinner, the traditional decision-making process in most organizations is an advocacy-based approach. This process

involves someone in authority stating a problem to be solved or a project to be evaluated....