Chevron receives inaugural Raiffa-Howard Award

Presentation for organizational decision quality and gala mark the 50th anniversary of decision analysis.

The Society of Decision Professionals (SDP) presented the inaugural Raiffa-Howard Award for Organizational Decision Quality to the Chevron Corporation during a gala celebration marking the 50th anniversary of decision analysis. The celebration, which included an afternoon program on the history and future of decision analysis followed by an evening dinner gala, was held Nov. 8 in San Francisco in conjunction with the 2014 INFORMS Annual Meeting.

The award recognizes “consistent and sustained excellence in decision-making throughout an organization.”

Chevron was cited for its “unique and long-term commitment to making decision quality an organizational competency contributing to the company’s outperforming its peer group in total shareholder return for both the last five- and 10-year periods. Chevron began its decision analysis initiative more than 15 years ago. Today, more than 25,000 employees have been trained in the discipline. Decision analysis is the discipline incorporating decision theory, methodology and professional practice guiding decision-making under uncertainty.”

The awards’ namesakes – Professor Howard Raiffa of Harvard University and Professor Ronald Howard of Stanford University – are widely considered co-founders of the discipline of decision analysis, which crystallized with key contributions from Raiffa and Howard in 1964. Both were on hand for the celebration, along with more than 300 other decision analysis luminaries and guests.

“While elements of decision analysis have existed for hundreds of years, it was the work of [Raiffa and Howard] beginning in 1964 that brought it into mainstream use by giving us a logical and systematic set of principles to enhance our clarity of thought and enable us to act with confidence in the face of uncertainty,” said Bill Klimack, president of the SDP, an association of professional practitioners. “Corporations and government entities now have the tools to make complex decisions.”

“Decision analysis has by now helped many thousands of decision-makers, and has created many billions of dollars of value for the economy through better business decisions and better government policies,” said Jeff Keisler, president of the Decision Analysis Society (DAS), a subdivision of INFORMS.

“The Society of Decision Professionals is delighted to honor professors Howard and Raiffa for their work that has made an indelible impression on our field and our lives,” added Jack Kloeber, vice president of SDP.

Klimack, Keisler and Kloeber are active members of INFORMS as well as SDP. INFORMS was a sponsor of the gala celebration along with DAS.

Decision analysis emerged as a distinct academic field in 1964, building on developments in statistical decision theory and game theory by Raiffa and dynamic probabilistic systems by Howard. In that year, Raiffa began teaching the first university course in decision analysis within the Economics Department at Harvard and began preparing material for his 1968 book, “Decision Analysis.”

Also in 1964, but independently, Howard conducted the first professional application of the field he called “decision analysis,” which he described in his 1966 paper, “Decision Analysis: Applied Decision Theory.” Since then, major corporations have adopted decision analysis to improve multibillion-dollar capital decisions.

Source: Raiffa-Howard Award Program