Behind successful stories, be they acquisitions or product launches, there are a series of decisions that have been taken which proved to be right. These decisions could have turned out right by chance or by design, through the support of a robust decision making mechanism embedded within the organization. Given that we all are aware of the cost of making wrong decisions or the gains derived from making right decisions, we still don’t focus enough on improving Decision Making capabilities within the organization.
Decision Making Mechanisms and four Elements
Each of the four ‘Decision Making’ elements present two further options, thus providing theoretically sixteen Decision Making Mechanisms to choose from (Diagram above depicts combinations related to strategic choices).
Decision taken about an operational matter (say replacing a tyre) by an individual (driver) provoked by the dip in the reported performance (car mileage) is a decision making mechanism that is most prevalent in all enterprises and most easy to execute. It also provides limited differentiation potential.
Strategic Choices (say adding features to new product launch) made proactively by a group based on facts derived from analyzing nontraditional information sources (pattern recognition from text, speech, blogs news, taken from social media) is a decision making mechanism with immense differentiation potential, but not widely leveraged among organizations. Employing this relatively sophisticated decision making mechanism demands certain execution capabilities (say collaborative tools, web 2.0 technology, business intelligence tools, text analytics), transparent, creative and bold leadership and enabling culture (valueing experimentation, openeness and performance driven approach ). Not easy set of pre-conditions, but justifiable given the significant pay-offs!
Here is my hypothesis: Organization that has the ability to leverage more Decision Making Mechanisms, coupled with framework and discipline to choose right option to suit the context and derive desired outcomes, enjoys sustainable advantage in this uncertain, volatile, hyper-connected and demanding business environment.
Implication: Organisations should conciously work towards increasing its capability to leverage more decision making combinations.
So where does your organisation stand today? Let us do a quick check:
- Is there a preferred, predominant Decision Making mechanism promoted by your organization’s leadership, emboldened by culture that comes as a default choice?
- When was the last time your organization consciously changed or experimented with alternative Decision Making mechanism?
- Out of the potential Decision Making mechanisms, which combinations are not feasible within your organization that have potential to add value? (If only, we could..........)
- Have you consciously benchmarked differentiating Decision Making mechanisms employed by your competitor or leader in other industry?
- How many investment proposals are examined for their ability to enhance organization Decision Making Mechanisms? And tracked to its realization?
As leaders, it is time to take some tough decisions with regard to increasing the Decision Making Mechanism Choices we leverage.
Happy to hear about initiatives or programs your organisations have taken up to strengthen its Decision Making Mechanism, the core competence that matters most!
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