Wednesday, February 3, 2016

CIO’s Digital Agenda XXXVII: How to Improve Decision Making Effectiveness

The greatest danger in times of turbulence is not the turbulence; it is to act with yesterday’s logic.  -Peter Drucker
One significant effect of digitization is increased velocity, complexity, unpredictability, and a need for a faster response to changes in business and industry based on effective and efficient decision making.  The questions to check: Do you distinguish between decision making and possibly 'problem defining' processes? Or does your decision-making processes inherently include a phase for 'problem defining'? Or is it jumbled together and thus confusion is the result? And how to improve decision-making effectiveness overall?

How to Improve Decision Making Effectiveness

  •  How to Frame the Right Questions for Decision Making-: One of the most important tasks for management is to make decisions, however, across the sectors, many business leaders fail to make effective decisions, or part of problems is that they frame the wrong question; which means they intend to do things right before doing the right things’ or they try to figure out the ‘HOW,” instead of digging through “WHY” first. Business problems" are usually difficult. Indeed, part of the difficulty is that businesses often try to use decision-making processes to define the problem, and in doing so often fail to really define the problem. The problem then just becomes the output of decision-making processes. You then try to solve that problem - using more decision-making logic and wonder why the actions we have taken have made the situation worse. So first things first, how to frame the right questions for decision making?

  • The Decision Making Scenario: Either at an individual level or corporate level, people have to make a decision, large or small even at daily basis. The precursor to 'What is the decision' is 'Why do we need a decision'? Which is preceded by the framing question 'What is the problem that we need to solve.' And then technically, HOW to make better decisions. So the issue of the issue is: Decision power is a mind-power. How to improve it?

  • A Collection of Insightful Decision Quotes: It's very hard for people to make hard decisions because they do not take the time to think about what they believe, or what they stand for... You can't make up your mind because you are not fully committed to what you believe and in what you know to be right. "The greatest danger in times of turbulence is not the turbulence; it is to act with yesterday’s logic."  -Peter Drucker

  • Analytics-based Decision Science: Although decision making is both art and science; intuition and analysis, thinking fast and thinking slow. Due to the complexity and interdependence of digital nature, the decision becomes more science than art, the whole purpose of analytics is to make better decisions based on data, big or small; wide or narrow; you can call it with any name like decision theory, science, and technology. The point is, how can it optimize decision-making scenario and improve decision effectiveness?

  • What’s the Magic Formula to Make the Right Decision?: Having all the facts to make the best decision is a utopia we would all like. But as the saying goes, if you don't move swiftly someone may eat your lunch. Technically, how should you weigh in the data and gut feeling to make the effective decision at the right time?
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