Decision timing improves decision quality

December 2008 » Feature Articles
The timing of decisions can have as much financial or scheduling impact on a project as the decisions themselves. Yet, project owners and engineers often do not recognize the effects of poor decision timing during project execution. Decision timing affects the schedule, pace, budget, design, agency approval, and construction progress. Decisions made at the wrong time disrupt work flow, create delays, bring about rework, and upset standard work sequences, all of which results in increased cost.
Bradley Novacek, P.E.

Making major decisions early in the project-planning process and with input from the design team minimizes delays, rework, and costs.

The timing of decisions can have as much financial or scheduling impact on a project as the decisions themselves. Yet, project owners and engineers often do not recognize the effects of poor decision timing during project execution. Decision timing affects the schedule, pace, budget, design, agency approval, and construction progress. Decisions made at the wrong time disrupt work flow, create delays, bring about rework, and upset standard work sequences, all of which results in increased cost.

Plan decisions
Decision planning provides the following four benefits:

  • establishes independent goals (proactive management);
  • sets measurement standards;
  • converts values to action; and
  • allows orderly commitment of limited resources.


Without a plan, counterproductive decisions may be made. If you maximize planning efforts, you can have pre-planned responses to many potential issues. You will also have produced a much more optimized plan.

Don’t confuse scheduling with decision planning. A schedule is only an event sequence. If the event sequence is poorly conceived because of poor planning and decision-making, the related decisions can appear haphazard and be damaging. Mistakes are most obvious when completed improvements get ripped out and replaced.

Many decision-making processes have been developed, ranging from simple to sophisticated. Among the techniques are Paired Comparison Analysis (T-chart), Grid Analysis, PMI, Least Drawbacks Method (the fable of Buridan’s ass), Measured Criteria, Decision Matrix Analysis, Cost/Benefit Analysis, Delphi Techniques, Chance, FIBER, Intuition, and Pareto Analysis (see "References" below). Each technique fits certain decision situations better than others. Decision-makers should select the appropriate technique to fit the decision faced. Experienced decision-makers are familiar with many types and use them skillfully.

Project and decision stages
Projects have four major steps—planning, engineering, design, and construction. Planning is about wide-open thinking and conceptualization. Engineering proves those ideas will work. Design puts those ideas together into a product. Construction makes the product come into existence. For best results, issue identification, thinking, and decision-making for each project stage should be occurring in the preceding stage to the extent practical.

Most major decisions should be made in a project’s planning stage. Delaying major project decisions until later stages as a standard practice can be disastrous (see Figure 1). Dealing with major issues in a project’s planning stage typically results in a better project because the main performance pressures—budget and schedule—are usually lowest while enthusiasm is typically highest. This situation allows for significantly greater and better creative thinking.


How about discovering during construction that a motor control center cannot be installed unless the room is built around it or that a 500-pound valve cannot be installed (or replaced) because the opening is too small or in the wrong location? This condition is actually a result of bad planning and bad decision-making, not bad design per se. At the time the component’s idea was conceived, thought should have gone into the surrounding conditions. Project owners and engineers need to recognize the critical role that early project concept and goal discussion have on the final design and deal with it successfully. A conceptual design and decision process executed with the proper goal in mind—design planning and decision-making for project success—will result in good decisions and, therefore, positive outcomes.

Early project stages are strategic decision times. An organization’s top levels should be involved and the approach should focus on direction, expectations, goals, philosophies, and values. Consider project feasibility challenges or impacts (physical, technical, political, environmental) on the goals and expectations. These strategic decisions need sound decision-making support. An owner should want and expect to involve the design team in preparing supporting data. A penny saved here is worth thousands or millions of dollars later.

Tactical decisions come next. These decisions are more project focused and involve mid-level to lower-level team members. Typical decisions include methods to accomplish project expectations and firm project goals, and to establish general design requirements, as well as schedules. A failure to spend time and effort on conceptual and preliminary designs here can lead to a series of rushed or poor decisions later. Long lead time and project phasing issues should come to light here, as should any particular challenges (physical, technical, political, environmental, marketing) presented by the project. Plans to deal with different scenarios should be developed to keep the project moving forward as well as possible. Tactical decisions will re-appear periodically on large multi-phase projects. Watch for them and recognize their importance.

Operational decisions are the last decisions made. These involve the project execution team and involve project improvement planning, design, construction, and marketing details. These month-to-month decisions (or perhaps more appropriately, year-to-year decisions with daily update) should make a project flow smoothly. If the project flow is jerky and fraught with significant rework or re-thought, then something (a person, process, or action) is messing up the flow or needs improvement. Tactical decisions can have high costs if they have to be dealt with at the operational level.

Robert Harris points out in "Decision Making Techniques," that if nearly all thinking and decision-making is taking place at the operational level or stage, then not enough strategic or tactical thinking and planning is occurring.

’But I don’t want to plan!’
If you fail to plan your decisions, your decision-making choices will most likely be by chance, be the path of least resistance, and be mere intuition. Why? Because these are the methods most likely to be used when a person is placed under pressure of schedule or budget. The worst-case decisions are chance decisions. Do you want your project outcomes to be decided by chance?

Intuition should not be confused with experience. Intuition has a place in decision-making, but should come into play only after another decision-making method is used and the results are ambiguous. Many people say they are using intuition when they really are substituting perceived experience and making a poorly informed decision.

The Arizona Department of Transportation took advantage of a weak structural construction market in 1995 and realized a multi-million-dollar savings by deciding to build several freeway bridges (left) prior to roadway construction (right).  

Timing really is important
How important is decision timing on decision quality? The following two examples illustrate possible impacts.

Developer W considered expanding his project area by a few hundred acres, but the adjacent owner rejected the purchase offer. The sewer serving that area was in final design and the developer’s project manager decided to ignore the possible expansion area and size a 1,200-foot-long trunk sewer segment serving the area one size smaller and 4 feet shallower because it saved $10,000. A year later, that decision cost a few hundred thousand dollars when the in-service but overcapacity sewer had to be replaced to serve an expanded service area once the developer bought the adjacent land.

Developer D needed to build a water pump station, 2 miles of transmission main, and a reservoir to serve land he wanted to sell in Phase 3 of a project. But the economy was horrible. Developer D hired an engineer to evaluate the dilemma and explore ideas. The engineer suggested an interim facility design change that increased by $20,000 the cost of some pump station facilities but delayed $750,000 in transmission main and reservoir costs for three years, when the market was significantly stronger.

What creates problems like the first example? Many factors, but most can be traced to poor decision timing, many times coupled with ego, sunken cost fallacies, or poor organizational communication. Improved decision timing cannot solve ego, organizational, or communication shortcomings, but it can help make up for them.

What produced the second example’s positive outcome? Primarily trust, shared knowledge, creativeness, and timing were involved. The owner trusted the engineer to be creative, shared the challenge faced, and asked and paid for help before further effort was expended on an old plan.

Preferred timing
A land development project provides an example to examine appropriate decision timing. The project planning or conceptual stage should be home to many important decisions. Schedules, themes, goals, investment return, project vision, overall agency requirements, budgets, and general construction sequences are typical issues that get attention. Some people call this the "bubble diagram" stage.

Early conceptual plans and development cost estimates can help reach informed decisions. One large national developer was known for spending significant efforts at this stage. The developer typically asked consultants to prepare multiple development schemes complete with concept layouts, rough master plans, and detailed construction cost estimates to help analyze investment return, project challenges, and cost optimization. This approach resulted in significant early decision-focused thought, speeding planning stage document submittals, and improving the approval process.

The preliminary design stage should have a few remaining major decisions. Detailed construction phasing, construction coordination, cash flow, master planning, development programming and layout, design criteria selection, variances, and such, are typical considerations culminating in the development’s master plan creation. More jurisdictions are asking for detailed thought at this level to include as part of their development process to support their public involvement or information programs. Some developers view this thinking exercise as an expensive burden, while others embrace the chance to think through, plan, and engineer their projects in more detail.

During final design, very few major decisions should be required unless circumstances drastically change—for example, a faltering economy changes the target market, an adverse lawsuit decision is announced, or a development ordinance or policy changes. The final design period and beyond is a costly time for major decision-making since design is advanced and time is critical. Decisions here should be primarily final, small alternative selections and implementation of earlier discussions and decisions. Waiting until a parcel’s final design is nearly complete is not the time to check to see where the serving sewer stub is and what lies between it and the parcel.

Weaknesses in the process
Most process weaknesses can be related back to personal or organizational traits (confidence, ego, expectations) that affect timeliness. Examples include the following:

  • poor group organization and limits on responsibility (Who really controls the project or process?);
  • poor group dynamics, egos, and interaction;
  • poor personal organization and decision-making skills; and
  • poor (dysfunctional?) business models or approaches.


Maybe the worst decision-making process is the ill-advised practice of attempting to delegate or assign decision-making to others under the guise of project coordination (a vague term at best). Some owners perceive a significant cost savings will come their way if they require the design team to "coordinate" the design and resolve all conflicts as part of its standard service and fee. This practice usually leads to poor team communication, significant coordination issues, much slower design progress, and significant finger-pointing because no one with a real investment in the project is scheduled to, charged with, or compensated for decision-making. Data is exchanged, but who makes decisions? Is the last one who sends data the one who has to make the decision? Does the civil engineer’s design have to change or is it the architect’s layout?

This practice usually signals inexperience, fear of accountability, laziness, missing knowledge, or internal dissension on the owner’s part. Project or development risk belongs to the owner, not the design team, because the owner reaps the associated reward or return on investment. If an owner wants to delegate risk, then the owner needs to be willing to delegate reward (via compensation) also.


Bradley Novacek, P.E., is a senior project manager and chief development services engineer at Stanley Consultants. He can be reached at novacekbradley@stanleygroup.com.



SIDEBAR: How can decision-making be improved?

  • Identify issues and options early in the process. Time delays almost always lead to budget impacts that are usually detrimental.
  • Involve all appropriate parties in the process. Decisions concerning major project facets or components usually have expensive ripple effects that are not always evident but should be considered.
  • Remember that time is not always a friend. The reluctance or inability to decide can make time decide for you, and time is not always an economical decision-maker.
  • Decisions proceed faster with supporting information. Be willing to pay for good collaboration and research and you will receive the rewards it brings. Ask and listen to your design team. Pay your design team to be the "idea" people. Use your consultants as consultants.
  • Communicate among the team, internally and externally. An informed team is a helpful team. Share and discuss possible changes with the design team early to identify ramifications. A particular decision’s ripple effects are not always obvious at first glance and to one team member. Money is rarely saved by ignoring the design team or limiting the information shared.
  • Be willing to pay for input and ideas. Commodity design gets you commodity decisions. Ask and pay your design team to think!
  • Successful owners and developers (and engineers) use future-based decisions. If an alternative outcome exists, consider it and plan for it. Don’t focus on one or two small cost savings that could have much more costly solutions if the outcome changes. Real design economy produces flexible infrastructure.


SIDEBAR: References
Harris, Robert, "Decision Making Techniques," VirtualSalt, March 12, 2001, www.virtualsalt.com/crebook6.htm.

Raghunathan, Ajan, "Decision Making Techniques." Psychology4all, 2001, www.psychology4all.com/DMTechs.htm.

"Six Thinking Hats," "Effective Decision Making," and "Decision Making Techniques," Mind Tools, 1995-2008, www.mindtools.com/pages/main/newMN_TED.htm.


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