Monday, October 24, 2016

Five Principles to Reach Decision Maturity

Decision maturity is to ensure the right decisions have been made by the right people at the right time with the right mix of information and intuition.

One significant effect of digitization is increased velocity, complexity, ambiguity, unpredictability, and a need for a faster response to changes in business and industry based on effective and efficient decision making. How is that possible? Decision making is both art and science, especially for business leaders, making either strategic or tactical decision effectively is one of the most critical responsibilities facing them every day. How to set principles and guidelines in reaching the high level of decision maturity in your organization?

Frame the right questions before hunting for the right answers: Inappropriate framing is being the root cause of most bad decisions. Often time, people rush up to make decisions or jump to the conclusion even without understanding the real issues. Many times, framing the right question is one of the most crucial steps in decision-making. It is the step decision makers can slow down and think through the implications of their intuitive, subjective assumptions. This is particularly important for strategic decision-making. In the senior position, stay on strategic focus, CXOs should be able to understand the real issue, count on the answer and understand the scope of the answer and any constraints on validity or accuracy. But that too should be part of the answer. That said, knowing enough about analytic processes provides insight and improves decision-making scenario in orde to make effective decisions consistently.
Leverage Systems Thinking and multidimensional thinking process in strategic decision making: Systems thinking is nothing more than the good combination of analytic and synthetic thinking, integral and holistic thinking, to understand the interconnectivity between parts and the whole, see the trees without missing the forest. Decision makers have to leverage different variables, try to identify the parts of a system and how those parts are connected, look at things from different angles, think about how change over time has influenced the current situation, also try to identify potential unintended consequences of decisions and actions. This holistic examination of issues/problems takes time, but worth the effort for avoiding blind spots and  improving decision effectiveness and reaching decision maturity.

Collective insight is invaluable: One interpretation of information may differ greatly from another interpretation of that same information. Avoid group thinking syndrome caused by homogeneous team setting in decision making. It is always beneficial to communication, interpretation and accuracy of overall results when multiple heads with cognitive difference come together to interpret and define data sources and outcomes. The more engaged the business leader in accessing information and understanding where it is extracted and how it is compiled, the better and more understood the results. Decisions are still made by people, so the challenge is to get the relevant people communicating with each other more efficiently, and making the best use of the digital tools.

Intuition has its place in decision making, but clarify your gut: What might be identified as "intuition" is probably subconscious rapid assessment through a decision tree to come up with an appropriate and timely response to an unfolding situation. Your gut feeling will play a role, but by asking simple questions like how do you know, what evidence do you have, is it your opinion or a fact, makes decisions less biased. Breaking the "problem down," rather than making one big "gut decision," can reveal inappropriate bias, and creates an audit trail. More work needs to be done on creating a healthy environment for intuition to be valued and respected if people are moving up the level of decision maturity, not in the other way. In practice, more often than not,  it’s about striking the right balance of both analytics and intuition for making effective decisions.

Making the effective decisions TIMELY:  It is often said that a wrong decision taken at the right time is better than a right decision taken at the wrong time. Behind every decision, there is always an element of uncertainty and doubt. It is up to the decision maker how he/she handles it. Reaction-to-action time would be enhanced by one's upwards learning curve or accumulation of such information, at the same time "speed" may be offset or enhanced by new problem-solving approaches/tools used. But significantly, decisions are to be made on time, and this is more imperative, when uncertainty and doubts are major hindrances to decision making. You can't wait for all the information, data, etc., ready to take a decision. No decision in the world outlives the time, place and persons constituents on the basis of which it was made. Timing is always critical for decision making effectiveness.

Decision maturity is to ensure the right decisions have been made by the right people at the right time with the right mix of information and intuition. There is fuzziness in the decisions because there is fuzziness in conflicting criteria. At the Digital Era, making decisions in digital ways means to leverage multidimensional thinking processes, advanced decision tools, the human’s intuition-gut feelings, and add the “wisdom’ in the decision process to improve the overall effectiveness of decision making.



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