S6E03 | What is Decision Engineering? Exploring the Many Names of Decision Science
This season was made possible in partnership with the Society of Decision Professionals.
In this episode of Ask a Decision Engineer, Michelle Florendo features voices from members of the Society of Decision Professionals to explore the diverse applications of decision analysis tools across industries. From energy utilities balancing environmental and economic trade-offs to pharmaceutical companies managing billion-dollar drug development portfolios, discover how structured decision-making frameworks are being used to tackle complex challenges in fields ranging from consumer goods to mining operations.
“It’s so fascinating to watch people struggle and struggle and struggle. And then you can come along with some simple tools to say, Hey, have you thought about this? Did you think of framing it this way? I’ve got a couple of little tricks in my large bag of tips and tricks that you can try and sometimes the magic happens and what looked like an impossibly complex decision simplifies, and then doing the right thing becomes obvious.”
S6E03 | How and where is Decision Science applied?
This episode showcases the real-world impact of decision analysis across diverse industries and applications, demonstrating how structured thinking tools help cut through complexity when there's no single "right" answer. Whether managing hundreds of product launches or navigating high-stakes drug development decisions, these frameworks provide clarity in the face of competing objectives and uncertain outcomes.
Table of Contents
Introduction
BC Hydro: Complex Utility Decisions with Basil Stumborg
Pharmaceutical Industry Applications with Eyas Raddad
Consumer Goods vs. Pharma: Volume vs. High Stakes with Tyler Ludlow
Portfolio Theory Applications with Tony Kenck
Innovation and Conflict Resolution with David Matheson
Mining Operations: Managing Spider Web Effects with Andrew Thrift
Conclusion: Universal Applications
Introduction [00:00:00]
Michelle opens this episode featuring voices from the Society of Decision Professionals, exploring how decision analysis tools are applied across various industries. From energy and pharmaceuticals to consumer products and natural resources, listeners will discover the versatility of structured decision-making approaches in tackling both large-scale strategic decisions and day-to-day operational challenges.
This season was made possible in partnership with the Society of Decision Professionals, showcasing the breadth of applications for decision science in the real world.
BC Hydro: Complex Utility Decisions with Basil Stumborg [00:01:30]
Basil Stumborg, decision analysis expert at BC Hydro (British Columbia's provincial electric utility), describes his role as helping executives navigate complex decisions where there's no single right answer. These decisions involve competing values and trade-offs that extend beyond financial considerations to include environmental impacts, indigenous rights, and economic development.
"My job is to help frame those up so the executive clearly sees what the trade-offs are, and then they can bring the corporation's values to bear when thinking about what the best option is," Basil explains.
His enthusiasm for the work comes from witnessing transformation moments when complex decisions suddenly become clear through simple frameworks and tools. This illustrates a key application area: decisions involving multiple stakeholders and objectives beyond just the bottom line.
Pharmaceutical Industry Applications with Eyas Raddad [00:04:00]
Eyas Raddad explains why decision analysis is particularly valuable in pharmaceutical development, where decisions must balance competing objectives with long feedback loops and high regulatory stakes. In drug development, teams face critical decisions about dose selection, balancing safety and efficacy, and go/no-go choices for expensive molecular projects.
Key pharmaceutical applications include:
Balancing trade-offs like safety and efficacy
Portfolio prioritization across multiple projects
Strategic decisions about therapeutic areas and indications
Managing linked decisions across related development programs
The pharmaceutical industry exemplifies how decision analysis helps when huge decisions aren't easily reversible and stakes are high, with both billions of dollars and lives on the line.
Consumer Goods vs. Pharma: Many Small Wins vs. One Critical Decision with Tyler Ludlow
Tyler Ludlow contrasts his experience applying decision analysis in consumer packaged goods versus pharmaceuticals, highlighting two different strategic approaches:
Consumer Goods (Unilever): Managing hundreds of product launches annually with the philosophy that making each individual decision better leads to overall competitive advantage. The focus is on incremental improvements across high-volume decisions.
Pharmaceuticals (Lilly): Targeting one highly successful launch per year with dramatically high rewards (several billion dollars annually). The challenge involves balancing cost, time, risk, and reward across a portfolio where current decisions enable or preclude future investment options.
This contrast demonstrates how decision analysis adapts to different industry contexts and risk profiles.
Portfolio Theory Applications with Tony Kenck
Tony Kenck explains portfolio theory's evolution from Harry Markowitz's Nobel Prize-winning work in finance to applications across diverse fields. Portfolio theory fundamentally seeks to achieve the highest return with the least risk, whether in financial investments or broader business contexts.
Applications span multiple industries:
Finance: Investment advisory and asset allocation
Pharmaceuticals and Oil & Gas: Managing exploration and development portfolios
Sports: The "Moneyball" approach to baseball team composition
Public Policy: Copenhagen Consensus approach to global challenges
The key insight is that portfolio analysis applies wherever you want to "get more for less" - maximizing benefit while minimizing cost across various measurement dimensions.
Innovation and Conflict Resolution with David Matheson
David Matheson emphasizes the dual nature of decision analysis applications: quantitative analysis combined with social conflict resolution. His work focuses on innovation and portfolio management, helping organizations move from "weird and wacky" ideas to serious business opportunities.
He highlights that while the field is known for analytical rigor, successful application often requires managing the people side of decisions, particularly when dealing with competing priorities and stakeholder conflicts.
Mining Operations: Managing Interdependencies with Andrew Thrift
Andrew Thrift describes how mining operations create complex "spider web" effects where engineering decisions reverberate across environmental, social, and regulatory dimensions. Traditional cost-and-schedule thinking proves inadequate when decisions involve:
Regional water quality issues
Indigenous participation requirements
Local government relations
Transboundary environmental concerns
Decision analysis provides tools to integrate these diverse considerations, helping teams move beyond familiar quantitative metrics to consider broader impacts. The approach works for both large-scale strategic challenges and smaller operational problems that benefit from structured thinking.
Conclusion: Universal Applications
This episode demonstrates that decision analysis applications extend far beyond any single industry or decision type. Whether managing utility trade-offs, pharmaceutical portfolios, consumer product launches, or mining operations, structured decision-making frameworks help organizations navigate complexity when there's no single "right" answer.
The common thread across all applications is the need to balance competing objectives, manage uncertainty, and make decisions that align with organizational values while considering multiple stakeholder impacts.
Key Takeaways
Decision analysis provides value wherever complex decisions involve competing objectives beyond just financial returns
Different industries require adapted approaches: high-volume incremental improvements vs. high-stakes individual decisions
Portfolio theory applications extend from finance to sports, entertainment, and public policy
Successful implementation combines quantitative analysis with social and conflict resolution skills
The "spider web effect" - where decisions create ripple effects across multiple dimensions - appears in many organizational contexts
Simple frameworks can transform seemingly impossible decisions into clear choices
Mentioned in the Podcast
Tony Kenck’s book, Strategic Business Portfolio Management (purchase in the US/UK) (purchase outside the US/UK)
Moneyball (baseball analytics)
Copenhagen Consensus (Bjorn Lomborg)
