Tuesday, November 15, 2016

Proactive Decision-Making

Poor decision making is often caused by ineffective processes, lack of knowledge or resources, cognitive gaps, unconscious bias, or procrastination, etc.

Digital leaders and professionals spend a significant amount of time on all levels of decision-making -strategic decisions, operational decisions or tactical decisions on the daily basis. Statistically, business decision effectiveness (especially large strategic decisions) is low, poor decision making is often caused by ineffective processes, lack of knowledge or resources, cognitive gaps, unconscious bias, or procrastination, etc. We live in the digital era with "VUCA" characteristics, decision-making is more science than art. So how to take a proactive and step-wise approach for decision-making, in order improving decision effectiveness and maturity?

Framing the right question is the first step in proactive decision-making: Framing the real issue needs to be solved is often the first step in making decisions. Sometimes decision-makers take passive thinking which is about taking things as they come and not really asking questions or analyzing the information presented for its value. The opposite of passive thinking is critical thinking - Critical thinking is a proactive thought process, which is analyzing, looking beyond the surface, not just accepting things at face value but asking questions and being active in their thought processes. Critical thinking implies some systematic methodology and multidimensional thought processes, employing and applying the criteria deemed appropriate by the thinkers involved, to arrive at the tangible and reproducible truth, the commonly accepted objective, testable or measurable, time-bound reality. Therefore, it's crucial to leverage real critical thinking, because it helps to identify blind spots in decision making and gain an in-depth understanding of the real issue in a proactive way.

Leveraging information and technology in decision-making processes: Good decision-making often takes both intuition and analytics. At traditional companies, both strategic decisions and operations decisions are often based on static or even outdated information available and the “gut feeling” of decision makers. Now at the dawn of the digital era, the abundance of information flow, click-away knowledge, and the more advanced digital technologies make it possible to gain real-time insight and business foresight if organizations are truly being digitized underneath, at the process level. It helps decision-makers at a different level of the organization to proactively leverage information, relevant & interdisciplinary knowledge and collective insight for making effective decisions in a scientific way.

Decision-making is also situation-driven: Decision making is situational, nothing is clear or concise. At the strategic level, therefore, the decision is not about good vs bad outcomes. It is important to identify the bottleneck in proactive decision-making scenario and choking point in decision-related communication or delegation. Both information and gut-feeling have their role in effective decision-making. The companies that are working to bridge the decision gap will be the most successful business going forward. It’s about how to leverage both internal and external factors, information and intuition in making sound judgment, minimizing risks, maximizing opportunities, navigating direction and taking actions to move the business and the world forward. From doing the decision analysis to optimizing business processes, all need to be well aligned in order to make effective decisions timely, be optimistically cautious, the leader’s positive tones can amplify collective human capabilities in the organization and takes calculated risk in making sound judgment and achieving decision maturity. And ultimately decision-effectiveness helps the business gain the business competitive advantage for the long run .

Decision-making is difficult due to varying reasons such as uncertainty and ambiguity of business circumstances, fear of failures, unsure about priority, unconscious bias, lack of knowledge or profound thinking process, etc. The more important the decision, the more you need to have all the data, perform all the preparation, an increase of confidence of success but the search for perfection is the enemy of decision-making, take a structural approach to making continuous improvement for deciding wisely, proactivly, timely and collectively.

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