Effective Decision Making - The way of the future ...

Bain & Co surveyed 760 executives around the world in various industries and found a 95% confidence level or higher between decision effectiveness and financial results. (Harvard Business Review June 2010)

Ø  How effective is your decision making? 

ØHow is your decision making completed? 
ØWho gets the final say? 

ØWhat impacts are taken into consideration? 

ØHow long does it take your business to make a decision? 

ØAre all voices heard within the process? 

ØAs more money is involved within the decision does it take longer to make a decision?

All these elements play into effective decision making.  Our research has continued to highlight a staggering variance in decision making. It appears the larger the organisation, in many cases, the more varied and disparate the decision making is.  There is no set standard and agreement on how decisions are made.  It often comes down to each individual leader’s style and their interpretations of policy or budget constraints!  How many people are heard in the decision making varies widely and often comes down to those that talk loudest or have the most influence within the group get heard.  Decisions are often made in total isolation to other areas of the organisation, which often leads to competing strategies or deliveries which negate other deliveries.  The cost of this poor decision making is astronomical.  It is not only seen in bottom line results but also people and cultural impacts, broken processes, ineffective products and on the list goes!

Well believe it or not there are very effective decision making systems that support an organisation to truly achieve their strategies in a way that is not only effective but also dynamic.  Why dynamic?  Because our world is constantly changing and when we make a decision it will be based on the view of the world at that point in time.  However in one week, one month, or one year the view may well have changed and those decisions need to be able to be reviewed and changed to support the organisation to adapt.  This is absolutely critical.  If decisions are made and then ‘set in concrete’ the organisation will be like an oil-tanker that will take too long to be able to change direction.

Organisations need to be agile and dynamic and to be able to make decisions based on the current landscape at that point in time, but have the ability to revisit them at any stage!

The most effective decision making systems we have seen allow for all voices to be heard, are agile enough for decisions to be revisited quickly if the ‘landscape’ has changed and support an environment of ‘giving things a go’ rather than waiting until every possible what if scenario is covered.

When did your organisation last review your decision making process?  

Systems thinking is a great start but systems planning and action is critical!

What do we mean by that?  Well we have spent years listening to and witnessing organisations talk about systems thinking but not taking this thinking and turning it into action.  We often hear talk about “breaking down of silo’s” or “working together across the organisation” but rarely see the sustainable action around this.  We see evidence time and time again that if a total system approach is not considered, your newly developed strategy or transformational change will be short lived.  Multiple upstream and downstream impacts will be overlooked and will cause the approach to be unsustainable.

So what do we mean by systems thinking versus systems planning and action?  Well it really is not one versus the other.  It is about understanding that whilst it is appropriate to think about whole systems- it is even more critical to plan and implement the new system from a total systems perspective.  Think about the system but ensure when you act you create it for the system and the system should create that which you are trying to transform. 

Some key points to remember when building, transforming or changing any form of system:-

1.   Remember a system is dynamic and continually interacting with its environment.  The solution should not only depict this, but your implementation plan should allow for the capability to manage our ever-changing environment.

2.   There are many different elements that make up a system and all should be accounted for and managed throughout the transition.  From a scientific perspective these are often seen as energy, material and informational elements.  From a business perspective these elements include but are not limited to things like the way you communicate, the hierarchy of decision making, and the way you operate both culturally as well as organisationally.

3.   Your system not only needs to be able to interact and manage within its own environment, but also be able to interact and manage within other environments also.  These impacts need to be worked through and managed dynamically as well.

4.   All systems work to find a point of equilibrium or balance, but will often experience oscillating and chaotic behaviour because of their very nature.  These systems are composed of people who are operating within their own systems that are oscillating also.  Therefore it is important to acknowledge this fact but even more important to plan for and act on.

So ... Great that you are thinking about the system but don’t forget to plan and then act on it!