Decision Analysis

John Celona

Decision Analysis Associates, LLC

Implementation of Decision Analysis for Claims Management at Stanford Medical Center

Stanford University Medical Center self-insures and manages claims and lawsuits. Beginning five years ago, we developed and implemented a process to enable routine decision analysis of all lawsuits and claims to:

  • Drive case management strategy, including further legal and factual research and discovery
  • Set reserves for the captive insurance companies
  • Ensure that regulatory and prudential requirements for insurance companies are met
  • Set early and stable reserves and eliminate “stair-stepping” of reserves
  • Minimize the total cost of cases and claims and resolve them for less than the trial exposure

We present the methods and the results, which to date are far superior to the results from previously used actuarial methods.

Bio

John Celona has over three decades of experience as a management consultant in decision analysis and strategy development in industries ranging from A (automobiles) to Z (zinc mines). John teaches Enterprise Risk Management and Healthcare Risk Management in the Stanford Center for Professional Development and is a guest lecturer for the decision analysis courses in the School of Engineering at Stanford University. In addition, he is on faculty for the Academy of the American Society for Healthcare Risk Management (ASHRM) and American Course in Drug Development and Regulatory Sciences. John is co-author of Decision Analysis for the Professional,a textbook first published in 1987 and now in its fourth edition. John has a BS in Industrial Engineering & Engineering Management from Stanford University and a JD from Hastings College of the Law. He is a member of the California Bar Association and clerked for the Supreme Court, State of Hawaii.

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Larry Neal, Jr.

Chevron

Decision Analysis in Medical Decisions: A Personal Journey and Lessons Learned

The author discusses his experiences using decision analysis to decide between options for treating cancer, the lessons learned from that experience, and the use of these lessons helping other men navigate through their own decisions.

The author was diagnosed in late 2013 with early stage prostate cancer.  Being a practicing decision professional with 25 years of experience, he immediately began to apply the tools of his trade to the decision at hand.  Upon reflection after the treatment and recovery, his experience, while positive, was marked by many of the very same pitfalls and errors he strives to help his clients avoid.  He also gained a better insight into the objectives of medical protocols and has adapted his story and learnings to help others navigate the medical world.

Bio

Larry is currently working as a Decision Analysis Consultant in Project Resources Company (PRC), a project management consultancy internal to Chevron.    PRC manages approximately $400 Billion in major capital projects on behalf of Chevron and its partners.Larry’s career of nearly 40 years has been spent entirely in the oil and gas industry, 37 years of it with Chevron.  He holds a BS degree in Chemistry from California State University, Bakersfield, and a MS degree in Petroleum Engineering from the University of Southern California.  He is a registered Professional Engineer in the State of California and a fellow with the Society of Decision Professionals.  He has served on the board of the Society of Decision Professionals and the Council of the Decision Analysis Society of INFORMS.  Larry was a co-recipient of the DA Practice Award in 2010 and a participant in the Raiffa-Howard Award for Organizational Decision Quality awarded to Chevron in 2014.

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Max Henrion

Lumina Decision Systems, Inc.

From Controversy to Consensus: Decommissioning California’s Offshore Oil Platforms

Like many issues of energy and environment, the question of how to decommission California’s 27 offshore oil platforms became highly controversial. Complete removal was required by the original leases, but would cost over a billion dollars, and destroy the rich marine ecosystems that have grown up around the platforms. A decision analysis provided stakeholders with insights that helped form consensus for a “rigs to reefs” option — removing the platform tops and retaining the supports as artificial reefs. An enabling law was passed almost unanimously by the California Statehouse. This award-winning study illustrates the practical value of:

  • Using decision trees to clarify the options and influence diagrams to sh
  • Representing differing stakeholder preferences with a simple multi-attribute model
  • Designing better decision options
  • Providing stakeholders with an interactive visual software to explore scenarios and sensitivities to uncertainties and preferences
  • Summarizing key insights on a single page

Bio
Max Henrion is the Chief Executive Officer of Lumina Decision Systems, in Los Gatos, California. He has 30 years experience as a professor, practicing decision analyst, software designer, and entrepreneur. He is the originator of the Analytica software. He was formerly Professor at Carnegie Mellon and Vice President at Ask Jeeves (now Ask.com). He is a Member of the Board of the Society for Decision Professionals. He has an MA from Cambridge University, M.Design from the Royal College of Art, and Ph.D. from Carnegie Mellon University. He is co-author of three books, including Uncertainty: A Guide to dealing with Uncertainty in Policy and Risk Analysis (Cambridge UP, 1990), and over 60 articles in decision and risk analysis, artificial intelligence, and energy and environmental policy. His study of decommissioning offshore oil platforms won the 2014 Decision Analysis Practice Award from the Society of Decision Professionals and the Decision Analysis Society.

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Dave Leonhardi

Boeing Commercial Airplane Group

Raffia-Howard Award: Background, Criteria, and Lessons Learned from First Selection

At a time when companies in many industries offer similar products and use comparable technologies, many of the previous bases for competition are no longer viable.  More and more organizations have discovered the power of analytics to out-think and out execute the competition.  These market-leading companies see their ability to exploit analytics as their distinctive capability, which forms the basis for competition through execution and smart decision-making.

The field of Decision Analysis has a long association with Analytics due to having it’s foundation in statistical decision theory, game theory, systems engineering and dynamic probabilistic systems.  Over the last two decades, the field has moved from focusing on specific decisions to achieving organizational decision quality – the culture, governance models, processes and competencies to allow an organization to achieve decision quality in all of its decisions.

Given the importance of smart decision-making in organizations, the Society of Decision Professionals has developed the Raffia-Howard Award for Organizational Decision Quality to recognize consistent and sustained excellence in decision making throughout an organization while providing a benchmark for understanding what it takes to achieve a sustained high-level of Decision Quality in organizations.

In his talk, Leonhardi will explain the concepts of decision quality, back ground on the creation of the R-H Award, criteria associated with evaluating organizational decision quality and insights derived from being on the inaugural team of examiners who awarded the first Raffia-Howard Award to the Chevron Corporation.

Bio

David Leonhardi serves as the leader of the Strategy Consulting arm of Boeing Commercial Airplane’s Strategy Integration Group, where he leads strategy development activities associated with Future Airplane Product Lines and Production Systems, Collaborative Business Relationships, New Business Development Opportunities and Sustainability Strategies. Leonhardi has more than 30 years of experience and has served in a variety of positions within multiple Boeing organizations including Developmental Manufacturing, Airplane Production, Product Development and Marketing.  Along with Working at Boeing, David is currently an Adjunct Professor teaching classes on sustainable business strategies and new product development in Seattle University’s MBA Program, he serves on the Conference Committee for the INFORMS Conference on Business Analytics and is a member of the INFORMS Decision Analysis Society and is a Fellow in the Society for Decision Professionals. Leonhardi holds a bachelor’s degree in Organizational Behavior from Central Washington University has master’s certificates in project management from George Washington University, Advanced Project Management and Strategic Decision & Risk Management from Stanford University and is a graduate of the MIT Sloan School of Management Strategy and Innovation Program.

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Mazen Skaf

Strategic Decisions Group

Applying DA and Analytics to Develop A Dynamic, Market-Based Policy Program Enabling Balanced Growth and Job Creation for Nationals

For a G20 country, we used a decision analytic approach to develop an innovative and market-based policy program to incentivize employers to hire nationals.   Since its launch in May 2011, the program has spurred a significant increase in the rate of job creation for nationals in an economy that had a historical over-reliance on foreign labor – an increase in the range of four-fold to six-fold in the monthly rate of net new jobs created for nationals when compared to the period preceding the launch of the program. By end of Q2 2014, the total number of net new jobs created for nationals exceeded 750,000 jobs . Further, the program has had a very positive impact on the employment of females in the private sector.

The program concept origination, design, and development was obtained through a rigorous application of DA and large data set analytics. We present the methodology used developing the program and discuss the benefits and impact on the labor market.

Bio

Mazen Skaf is a partner and managing director at Strategic Decisions Group (SDG), an international management consulting firm focused on strategy development and implementation. Skaf has extensive experience in strategy, corporate development, and decision analytics. He has advised clients in a variety of industries including technology and communications, energy, biotechnology, and pharmaceuticals.  As several of his successful clients in the private sector took on cabinet-level appointments in the public sector, he has had the opportunity to work with them on transformative policy design in economic development, knowledge-based industries, optimal resource allocation, and public-private partnerships. Before joining SDG, Dr. Skaf was a member of the start-up team and a senior director of product marketing at Rapt Technologies, a leader in web media price optimization (acquired by Microsoft). Prior to that, he worked at General Motors in the Decision Support Center where he led the development of the product portfolio strategy for GM’s largest division. Most recently, he was the Chief Business Officer of TRACON Pharmaceuticals where he directed business development activities and overall corporate strategy. Dr. Skaf holds a B.S. summa cum laude in mechanical engineering from the University of Texas and an M.S. and Ph.D. in engineering-economic systems from Stanford University. In 1999, Skaf and his client Donald W. Spillman from Shell received the first INFORMS Decision Analysis Society Practice award for their work in portfolio management. He is also a Fellow of the Society of Decision Professionals.

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