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Chevron Receives the First Raiffa-Howard Award for Organizational Decision Quality
The year 2014 marks the 50th anniversary of Decision Analysis (DA – the discipline for achieving
clarity in complex and uncertain decision situations) founded by
Professors Howard Raiffa and Ronald Howard. The Society of Decision
Professionals created the Raiffa-Howard Award for Organizational
Decision Quality to recognize this anniversary of DA, to honor the
founders, and to advance the appreciation of DA and Decision Quality (DQ
– the extension of DA to include facilitation for gaining
organizational commitment).
The Society of Decision Professionals
(SDP) awards the inaugural Raiffa-Howard Award to Chevron Corporation
for achieving excellence in applying the principles of Decision Quality
(DQ) throughout the organization. The award is given based on a careful
evaluation by an independent panel of experienced decision
professionals. The examining panel determined that Chevron deserves the
award based on a review of Chevron’s adoption in six categories.
- The Culture makes DQ an organizational competency.
The Chevron culture is infused with DQ and reinforces DQ. DQ is
pervasive at Chevron—widely applied across businesses, functions and
geographies. It is deeply ingrained and embedded in the expected Capital
Stewardship behaviors (with over 25,000 employees trained), and is
integrated into corporate processes and standards. It is part of the
language and Chevron executives say, "DA is in our DNA.” Chevron is
committed to a set of values and behaviors termed The Chevron Way. DQ
fits well with The Chevron Way.
- Decision makers have the knowledge, clear roles, and behaviors to use DQ constructively.
Decision makers are trained in DQ, understand DQ and expect DQ evidence
in their decision recommendations. Many thousands of Chevron
executives, managers and staff members have been trained in DQ.
Executives now expect DQ and they value what it does for them. They have
defined clear decision-making roles and frequently use decision boards
for major decisions.
- Professional Decision Support staff members have the appropriate capabilities and the trust and respect of the decision makers.
Over 250 decision professionals have Decision Analyst in their job
title. About 600 professionals are active members in the internal
Chevron Decision Analysis community. Chevron is decentralized; therefore
most of the decision professionals are embedded in major projects,
operating companies, and business units. They have a few core groups
with highly experienced decision professionals who lead training,
provide mentoring and contribute special expertise when needed. They are
committed to learning and to sustaining their professional excellence.
- Effective fit-for-purpose Decision Processes engage the right people and have the rigor to achieve DQ.
The major processes—The Chevron Way, Capital Stewardship, and Project
Management System – sustain the culture and further embed DQ in the
fabric of the organization. Chevron’s assurance activities include
review of DQ. In addition, Chevron’s systematic look-back process
identifies learning opportunities.
- Tools fit the decision needs, are theoretically sound, and are adequate to meet many decision needs.
Chevron uses a broad array of tools and is exploring new ones.
- Demonstrated Benefits are apparent from Organizational Decision Quality. Chevron
has outperformed its peer group in total shareholder return for both
the last five- and 10-year periods. Chevron executives state that DQ is
an important contributor to this performance. The upstream business of
Chevron (about 90% of all capital expenditures) requires big investments
(often many billions) that need to be productive for decades. These
decisions require facing huge uncertainties. Chevron meets this
challenge with DQ.
The Society of Decision Professionals
supports decision professionals to become the trusted advisors of choice
for decision makers facing important and complex decisions. The Society
fosters collaboration, continual learning, and networking amongst its
members and other professional societies and organizations, so that as a
growing community we can bring clarity and insight to Decision-Makers.
On occasion of the golden anniversary,
the SDP thanks professors Raiffa and Howard for their roles in founding
this profession and congratulates Chevron on its remarkable achievement
in the adoption of organizational DQ. We hope that this award will
inspire many organizations to follow Chevron in adopting organizational
DQ.