Which costs less the $130 or the $1700 coffee maker?

Coffee MachineThe answer is obvious, you say? Stick with me here.

I wanted to buy a coffee maker that would make one fresh cup at a time, fully automatic and self-cleaning. The obvious choice is the popular Keurig machine, which Amazon is selling for $126.50. Insert a K-cup, push the button and that’s it. The extravagant option is a Jura-Capresso C9, an impressive machine that makes espresso drinks as well, discounted on Amazon for (gulp!) $1,698. It holds a good stock of beans and water. Push the button and it grinds, tamps, brews and cleans up after itself.

I really need to figure in the cost of the coffee to get a reasonable cost comparison for this purchase decision. I drink at least three cups of coffee per day and keep a coffee machine at least five years. That comes out to 5,475 cups of coffee over the five-year period (Yowee!). I put together a spreadsheet to calculate the cost of each machine, including the coffee, over this five-year period. Here it is, coffeecompare. You can change the numbers in blue if you drink more or less coffee per day or keep a machine a longer or shorter time. That will give you your own total cost.

I like Starbucks Verona blend, so I used that for the comparison. The best price on the K-cups on Amazon is $67.98 for a package of 96 K-cups, which comes out to $.71 per cup. The cost per cup of coffee beans was a little trickier. Starbucks claims 64 cups per pound, which works out to 4 cups per ounce. The best price on Verona beans on Amazon was $37.99 for three 12-ounce bags. That’s 36 ounces at 4 cups per ounce, or 144 cups of coffee. That works out to $0.26 per cup. Finally, I added the cost of the machine and the cost of all the coffee and got the true cost of each machine over five years.

coffee compareThe expensive machine saved hundreds of dollars! The five-year cost of the Keurig would be $4003 and the Jura-Capresso would be $3142. Try the spreadsheet with your own numbers and see what you get. The more coffee you drink, the better the Jura-Capresso (or any other machine that uses bulk coffee) will look. If you don’t drink much coffee, the Keurig is the better deal.

This is an example of how the answer can change radically if you consider what’s called life-cycle costs, all those ongoing expenses that we tend not to think about, things like monthly service or toner cartridges.

By the way, cost is not the only factor in this choice. You may choose the Keurig because you enjoy a variety of coffee roasts and flavors. You may choose the Jura-Capresso because you like an occasional cappuccino. In fact, I used to be in the habit of getting a cappuccino at Starbucks several evenings a week. I estimated the cost of doing this for five years, and that turned out to cost even more than either of the coffee makers. Yes, my old Jura-Capresso, which I thought was an outrageous splurge, paid for itself a couple of years ago and is now making me coffee for 26 cents a cup.

Black Friday

Black fridaystamp

Last Monday I happened to drive by the local Best Buy and saw tents set up outside, the beginning of the line for Black Friday. I’m sorry I didn’t stop to talk to the people. I’m interested in how people make decisions, of course, and I wondered how they had decided to spend four days camped next to a parking lot to save a few bucks. Did they take off from work? What were they buying and how much were they going to save?

Every decision to do something is a balancing act between what you are giving up (here, possibly vacation days) and what you are gaining (maybe a cheap television). On the surface, at least, this one is overwhelmingly negative. Yet there are people all over the country doing this. There must be more to it than this.

The only thing I’ve ever done like this was to sleep on a Pasadena sidewalk to bag a front row view of the Rose Parade. The added benefit there was an all-night party with all the other people doing the same thing. In fact, I slept through the parade and still thought it was worthwhile.

New Apple products will often bring in lines of people days before the items go on sale. Apple fans are almost religious in their devotion. Even as far back as the 80’s, Apple marketers were called “evangelists.” These events then become a meeting of the faithful. There is definitely a party atmosphere among like-minded people, with the hope that Steve Wozniak or some other Apple deity will show up. I would guess some people show up even if they don’t plan to buy anything.

So, is there a benefit in the very act of camping out and being one of the first through the doors? Or are the advertisers just really good in getting us to act irrationally?

I’d be interested in hearing from you if you camped out in anticipation of Black Friday. What did you give up to be there? What did you gain directly through your purchases? What else did you get out of the experience? Bragging rights? Adventure? Camaraderie?

 

Why can’t I have it all?

Log cabin in a wooded setting during the autumn seasonRomantic couple having dinnerWhen I was young, I thought that when I finally got a job and made some money I could get what I wanted. Now I have a job and some money—not a lot of money, but enough to buy things I never expected to have, like a house and a new car. I should be able to buy my dream house. My needs are modest. Here’s what I want: A simple house in the woods, quiet, peaceful, and surrounded by nature…and within walking distance of fine restaurants and world-class live theater.

It doesn’t exist! Even if I were as rich as Midas or Bill Gates, I couldn’t have it. Conflicting goals. We run up against them all the time. The problem is that sometimes we don’t recognize the conflict until we’ve made the decision.

Drawn by the goal of peace and nature, I bought a cabin in the mountains. Ah, quiet and fresh air, the smell of pine trees. After a few days, I started to miss getting together with people with similar interests, speaking, training, technology, analysis, playing music, personal growth. I started to ask around, “What do people DO around here?” “Oh, fishing, hiking, boating.” “What about the symphony?” “The what?” “Where can you get a nice dinner around here? “Pizza or burgers?” It’s way too easy to focus on a goal that you don’t have and forget that what you have right now may be meeting some really important goals.

Fortunately, I still had my house in the city. Otherwise I would have had to give up on some of my key social and cultural goals. This just goes to show the importance of understanding all your goals (met and unmet) before making a decision. It also demonstrates that you usually have conflicting goals in any important decision.

Did you ever make a decision and later realize that you forgot about some important goals? How do you make sure you’ve considered all the important goals and constraints (without making yourself crazy)? How do you make a decision when you can’t meet all your goals because they’re in conflict?

The runaway bridal shower

shower2My daughter just commandeered my house and yard for a bridal shower for a good friend. I can remember a time (Now, doesn’t that make me sound old!) when a bridal shower was simply held in somebody’s apartment. Everybody sat around on mismatched folding chairs with plates balanced on their laps and had cake and punch. Nice and simple.

I’ve watched my daughter stress out the last few weeks putting together this big production. You couldn’t walk through the family room for all the art projects in progress for the decorations, favors and games. There was food to arrange, tables to rent, games to create. There was a theme and colors. There were 50 people invited. The other bridesmaids were not pulling their weight. People were not getting the invitations in the mail for some reason and would need to be called.

I’m proud to say that my daughter is a take-charge person. She’s a decision maker. She figures out what needs to be done and how to do it. The problem is that she’s also a take-over person. She sees what needs to be done and picks up the slack and takes over from the slackers. As a result, she was doing most of the work herself, as she often does.

I’ve seen this in myself and others. Being a take-charge person comes with the risk of becoming a take-over person and burning yourself out. Part of being an effective decision maker is assessing the costs in money, time, energy, and lost opportunities. How much is good enough? What is the benefit of what we are planning to do? Is it worth it? Will this make the party more enjoyable? Will it make the bride-to-be feel special? Will people enjoy this or am I just showing off?

Saturday was the shower. I woke up early and came into the family room and found three young women madly cooking and decorating. There was stuff all over the house, so I ate breakfast outside. Was this going to be ready by the 11:00 party? I couldn’t imagine.

Somehow everything was ready when the guests arrived. There was a festive champagne buffet brunch with a waffle bar and a chocolate fountain. Beautifully decorated tables sat on the grass under a white canopy. Everyone had a good time and the bride was thrilled.

Afterwards, I asked my daughter whether it was worth all the weeks of work and stress. She said, yes, it was all worth it because her friend deserved it.

What do you think? Have celebrations become overly elaborate and stressful or is it all worth it? How do you keep yourself from becoming a take-over person?

Overwhelmed? Big decisions in little time

notime“Aaaaugh! I can’t go through seven steps to make a decision. Do you know how many decisions I have to make every day? I can’t spend any time on them,” he wailed. Have you ever felt like that? I have. In an earlier post I passed on several techniques for making a decision in a minute, but a few times every day I bump up against some issues that need more than that.

Here’s the good news. You can actually go through the seven steps in ten minutes or less to make a moderately complex decision.

Step Activity Time
0: Preparation Get pencil and paper 30 sec.
1: Mission Write down the issue or question 30 sec.
2: End-time We already set this for 10 minutes 0 sec.
3: Goals List as many goals, considerations, constraints and criteria as you can 1 min.
4: Alternatives List as many alternatives as you can 1 min.
5: Visualization Pick the 3 to 5 most important goals and the 3 to 5 most promising alternatives 1 min.
5: Visualization Lay out a grid with the key alternatives across the top and the key goals down the left side. 1 min.
5: Visualization Imagine each alternative as though it has happened. Put a score from 1 to 10 (10 being the best) in each cell reflecting how well you imagine the alternative meeting the goal. 2 min.
6: Insight Compare the scores for each alternative with the others and choose the best. 2 min.
7. Make it happen You have your answer. Get out of that chair and go do something about it. 1 min.

Listen to your gut. Much of this is subjective. The scores you give in the Visualization step are a subjective rating based on your expectations and your emotional reactions to the images you have created for yourself.

If the winner is not obvious in the Insight step, add up the scores. If the top two are close, pick the one that does best on your most important goal.

That’s it. You can do several of these a day. Relax, take a deep breath and then move forward.

Do you have techniques for quick decisions that you can share? How do you do it?

 

Time to shoot the engineers

deadlineWhen I was working as a mission analyst on major aerospace systems, there was a sign that someone had posted on the wall that read, “There comes a time in every project when you must shoot the engineers and begin production.” This was a warning to the engineers, who always wanted to build the perfect system and would continue tweaking it as long as they could. This often was true of the analysts as well, myself included. We never had all the answers. We always wanted to do one more trade study. This was not only expensive, but it jeopardized the schedule. This was such a prevalent problem that folks developed an acronym for it (as aerospace folks are wont to do): T2SE (Time to Shoot the Engineers).

This is the same thing that happens to decision-makers. We often think, “If I spend a little more time on this decision, I’ll get all the information I need and be able to make an infallible decision,” or “I’m going to keep working on this until everybody is in full agreement on the right solution.”

Here is the sad truth.

  • There is no such thing as an infallible decision.
  • No one ever has all the information needed.
  • No single decision will make everybody happy.

Repeat these to yourself until you internalize them. So many otherwise good decisions never took off because the decision-maker could never get enough information or consensus. Usually you won’t. That’s real life. Accept it.

The power of “good enough.”

Sir R. A. Watson-Watt, the inventor of radar, described how a “good enough” design led to a turning point in World War II. “The best design had to be rejected because it would never be achieved, and … the ‘second best’ would be achieved too late to be used by the armed forces when they needed it. The third best would be adequate and was available in time, and it was what won the Battle of Britain.”

The same is true of your decisions. A “good enough” decision acted on is better than a perfect decision that never comes. Part of the art of effective decision-making is determining how much time you’ll give yourself and your team to come to a conclusion. Many decisions, such as choosing a shirt to wear, can be made in a minute or so. Others, such as buying a house, moving to another city, taking a job, or getting married, need and deserve more time. A complex decision might take months. Here are some questions to help you set a reasonable deadline.

How much time does the decision deserve?

What are the possible consequences of the decision? What might change or go wrong that will affect the consequences? What is the potential payoff? What is the cost of a poor choice? How hard is it to back out? What will it cost to back out? Will there be future opportunities?

How much time does the decision need?

Do you have all the information you need to make an informed decision? If not, how long will it take to get it? Who else needs to give you input? How long will it take to get that input? Remember that you will never have all the information you need. Focus on the information that you can get readily and that drives the decision.

Will you need time to think, research, analyze, or discuss? I know it is trite, but for any significant decision I recommend you “sleep on it,” even if you’ve done a full analysis and come up with the answer. You’ll have a different viewpoint in the morning. See if your answer still looks good then. Allow yourself time to approach the question from several different perspectives, to look at it while wearing each of the Six Thinking Hats or to discuss it with people with a variety of thinking styles, backgrounds or expertise.

How much time does the decision allow?

Is there a hard deadline after which the opportunity will disappear? Is the decision a part of a series of tasks that will get hung up if you delay? Is somebody waiting for your answer? What is the cost of delay? Is there a first-mover advantage?

One of my colleagues recently submitted a proposal for a government contract. The deadline for submittal was noon on a certain day. The team worked on it steadily up until the last minute, getting it sent out at 11:45 am. Unfortunately, the deadline was noon East Coast time, and they sent it out at 11:45 California time. They missed the deadline by less than three hours and were ineligible. They may have had a phenomenal proposal, but nobody read it. Death by deadline.

Often, the deadline is not so obvious. Waiting merely has its costs. The risks include losing momentum, rudely making people wait, delaying subsequent tasks that have a hard deadline, missing opportunities, and delaying the benefits of the action, such as income. Ask yourself, “What do I lose by postponing the decision another day (or week, or month)? What do I gain?”

Decision day arrives

Effective decision-making is both art and science, but now the one thing you need is courage. Often I come to the deadline I’ve set for myself on a big decision, one based on dissatisfaction, opportunity, or goals, and think, “I can’t decide yet. I don’t have all the answers. I don’t know how it’s going to work out. I can’t get everybody to agree.” Then I have to remind myself that I’ll never have full knowledge or complete agreement, and, most of all, that I had promised myself to act at this time with whatever I have. This is what people are talking about when they praise a leader for being “decisive.” It’s choosing a direction and moving forward.

Did you ever find yourself hung up, spinning your wheels, waiting for the clouds to clear so you can move on? How did you get past it? Do you set decision deadlines for yourself?

Saying nay to the naysayers

challenges

Have you ever had a crazy dream, an impossible goal for yourself?

I did. When I started my consulting services, I realized that for the first time in my life I could work on whatever I chose. But what did I want to do? Decision analysis, certainly. But what else? I thought about my long-term goals and realized that ever since I was 15 years old I wanted to do scholarly research in mathematics. Don’t laugh! I know, you are probably thinking, “She can do whatever she wants and she wants to do math?” I got that reaction from a lot of people.

I can’t explain it, but that’s my long-term passion and I’d let it slip away. That’s easy to do. My family wasn’t asking for it. My colleagues weren’t asking for it. My clients weren’t asking for it. It was just my own little private passion, buried under all the other demands on my life. Then a few years ago, someone asked me about some math research that I had done many years before, and that lit a little spark. It reminded me of my forgotten goal and I, bam, planted a signpost and built my own crossroads. I visualized my alternatives. On one hand, my consulting business with lots of time for traveling and relaxing. That looked nice. As I visualized the other path, the one leading to my crazy goal, it was covered with warning signs: You’re too old! You’re not a man! You’ve been away from it for 30 years! You’ll never catch up! No one will take you seriously! But in the far distance, beyond all the warning signs I saw beautiful research, new ideas, the borders of knowledge being pushed forward. I had to do it. It hasn’t been easy, but after a couple of years I discovered and developed some new research findings. I even presented my findings to an international math conference in Germany. It was all very exciting and fun.

I was lucky to have someone remind me about my crazy dream, because that reminded me to dig it up out of the clutter of daily life. There are two barriers between you and your goals. One is the naysayers who tell you it’s stupid or can’t be done. The other is the ease at which all our dreams get swallowed up by the demands of daily life.

Do you have a crazy dream? I’ll bet it’s not as off-the-wall as mine! Have you rediscovered it after many years? What was the trigger that brought it back to life?