Structured Decision Making with Interpretive Structural Modeling

Preface

The pace and complexity of life is increasing dramatically due to fierce competition, globalization, and unprecedented choice. Success in this environment is dependent upon making sound, timely decisions.

In the business world, managers often postpone major decisions, fearing that a wrong choice could harm the business and their career. Similarly, in our personal lives, many important decisions are put off or made by default. Lack of insight and understanding of a complex issue is a common reason why people postpone making major decisions.

An astounding tool, known only in select circles of management consultants, can help remedy this situation. This tool is called Interpretive Structural Modeling (ISM). ISM can bring diverse ideas together to provide thorough understanding of complex issues, leading to better olutions and decisions. ISM also forms the core of a powerful method that focuses the knowledge of a group to create outstanding results.

Widespread use of ISM can provide significant benefits to the world community, from delivering better products with faster market introduction, to understanding and correcting problems such as global warming. Every knowledge worker and consulting professional should have access to this powerful tool. Unfortunately, suitable literature is not available for a new user to learn ISM without going through several trial and error cycles. This book is intended to fill that gap.

Table of Contents

1. INTRODUCTION
   1. What is Interpretive Structure Modeling (ISM)?
      1. Conceptual View of ISM
      2. Why does ISM Work so Well?
      3. Decision Making Processes
      4. Is ISM a Computer Tool?
      5. Tools for Ideas and Numbers
2. COMPLEX PROBLEMS & SOLUTION FORMING PROCESSES
   1. Complex Problems
      1. Information Related Barriers
      2. Organizational Barriers
   2. Approaches to a Solution
      1. Perception Issues
      2. Dealing with Perception Issues
      3. Dealing with Information Barriers
   3. Useful Group Practices
   4. Problem Solving Environment
      1. Social Environment
      2. Physical Environment
      3. Problem Solving Steps:
3. APPLICATIONS OF INTERPRETIVE STRUCTURAL MODELING
   1. ISM as a Transform Function
   2. ISM Applications & Examples
   3. Personal uses of ISM
      1. Example - Personal Values Analysis
   4. Strategic Planning with ISM
      1. The Strategic Planning Process
      2. Role of Strategic Planners
   5. Scenario Planning with ISM
      1. Traditional Method of Scenario Planning
      2. ISM Based Scenario Planning
   6. ISM & Other Management Problem Solving Techniques
4. CREATING AN INTERPRETIVE STRUCTURAL MODEL (ISM)
   1. Introduction
   2. ISM and Complementary Skills
      1. Skills Needed for Group based Application of ISM
   3. Description of ISM Steps
      1. Step 1 - Define the Problem or Issue to be Analyzed
      2. Step 2 - Create List of Ideas
      3. Step 3 - Research Ideas to Understand Significance
      4. Step 4 - Construct the ISM
      5. Step 5 - Creating Action Plans
5. EXAMPLE - USING ISM FOR BUSINESS RE-ENGINEERING 95
   1. Introduction
   2. Example
      1. The First Meeting
      2. Trial ISM Construction (before the session)
      3. Session Planning
      4. Session 1 - Idea Generation and Preliminary Screening
      5. Session 2 - Construction of ISM
      6. Session 3 - Decisions
6. ISM AND OTHER MANAGEMENT TOOLS
   1. Sequencing and Prioritization
   2. Affinity Diagram
   3. Venn Diagram
   4. Priority Structure
   5. Activity Network Diagram
   6. Interrelationship Diagram
   7. Cross Impact Table
   8. Flowcharts
   9. Root Cause Analysis
      1. Fishbone Diagram
      2. Impact Map
   10. Tree Diagram
   11. Impact Wheel
   12. Intent Structure
   13. Nominal Group Technique (NGT)
7. APPENDIX A - EXPLORING HUMAN THINKING
   1. Visual Mapping
   2. Diversity of Ideas
8. APPENDIX B - BACKGROUND AND THEORETICAL BASIS OF ISM
   1. Background
   2. Transitive Logic
9. APPENDIX C - SAMPLE TEMPLATES
   1. AdTech Idea Sheet
   2. Project Planning Template
10. APPENDIX D - QUESTIONS FOR SESSION FEEDBACK
11. APPENDIX E - EXAMPLE ISM APPLICATIONS
    1. Applications of Interactive Management in Planning for a University Department
    2. Group Processes for Making Public Expenditure Reduction Decisions
       1. Application Example
    3. A Culturally Sensitive Approach to Tribal Governance Issue Management
       1. Day 1 - Examine the problems related to tribal governance
       2. Day 2 - Generate options to resolve the tribal governance situation
       3. Session Outcomes
12. APPENDIX F - SOURCE OF ISM SOFTWARE
13. APPENDIX G - EXAMPLE SOLUTION
14. GLOSSARY
15. INDEX
16. REFERENCES

List of Figures

Figure 1-1: Conceptual View of ISM
Figure 1-2: Fundamental steps to construct an effective ISM
Figure 1-3: Example ISM Voting screen
Figure 1-4: Example Interpretive Structural Model
Figure 1-5: Decision-Making Processes

Figure 2-1: Messy problem involving several groups

Figure 3-1: ISM Transforms Complex Problems into Linear Problems
Figure 3-2: Sandra's ISM
Figure 3-3: Strategic Planning Process
Figure 3-4: Traditional Scenario Planning Process
Figure 3-5: Traditional Scenario Planning with ISM
Figure 3-6: ISM based Scenario Planning with Multiple Uncertainties

Figure 4-1: Facilitation Skills for Team-based ISM
Figure 4-2: Process to create a useful list of ideas
Figure 4-3: Idea Sheets with stickers showing Importance and Lack of Information
Figure 4-4: Scatter-graph of Idea Sheets
Figure 4-5: Example screen used to construct ISM
Figure 4-6: Example Voting Screen for Business Investment Strategy Developement
Figure 4-7: Estimating Time Needed for Voting

Figure 5-1: Outline of Sessions
Figure 5-2: Process Diagram
Figure 5-3: Idea Sheet Flow during Idea Generation Phase
Figure 5-4: Wall Graph of Ideas
Figure 5-5: Voting Screen
Figure 5-6: AdTech ISM

Figure 6-1: Example Venn Diagram
Figure 6-2: Example Impact Wheel

List of Tables

Table 1: Comparison of Operations for Ideas and for Numbers
Table 2: Implementation of Problem Solving Steps
Table 3: Management Tools and their Strengths
Table 4: ISM Applications
Table 5: ISM & Other Problem Solving Techniques
Table 6: Wording the Context
Table 7: Example ISM Control Phrases
Table 8: SWOT template example
Table 9: Action / Implementation Plan template example
Table 10: Template for Feasibility analysis
Table 11: Summary of Ideas for Implementation Planning
Table 12: Implementation Summary
Table 13: Example Cross Impact Table