Monday, May 4, 2020

Forecast-Based Decision-Making

Decision effectiveness relies on an agreed common approach, not a predetermined set of "one size fits all" planning.

A decision is needed when there is uncertainty. Decision-making is both art and science. As a matter of fact, decision-making is one of the most critical and sophisticated activities for business leaders and professionals today, and at the strategic level, the outcome of decision making will directly make an impact on the survival or thriving of the business.

In essence, decision-making is about the future, here are a couple of perspectives on forecast-based decision-making.




Creating engagement around insight & foresight; not reporting the fact: With the overwhelming growth of data and shortened knowledge cycle, decision-makers need to have updated information that can be refined as business insight and foresight. In practice, "information" as input to the decision-making does not absolutely determine the decision, but it allows the decision-maker to exercise their judgment. They can also create engagement around insight & foresight for leading effective decision making.

The speed of change is increasing, the goal of business forecasting is about predicting what will happen and how to act on it by making effective decisions. The business context reflects both complexity and chaos, each of these contexts requires in-depth collective insight and foresight into effective decision making. It is the step-wise scenario of information –insight/foresight – decision making.

Enabling scenario and forecasting to promote decision alternatives: A decision is arguably a choice between two or more options. The great majority of these options are circumstantially provided. Thus, the information-driven forecast helps to clarify what the possible outcomes of making a certain choice are, as well as how to handle different problem-solving scenarios, etc. What seems to mark that good decision-making out from others is their ability to frame issues, make decision options, take actions, and bring up tangible outcomes.

An effective decision can be defined as an action you take that is logically consistent with the alternative you perceive. A"decision" has lots of connotations of finality. One alternative perhaps has a lot more strengths than another, but all those strengths together may not be nearly as important as the one or two strengths that another alternative has. Therefore, it’s important to dispassionately examine alternatives via fact-finding, analysis, structured planning, objective evaluations, and scientific comparison.

Focusing on making the complex radically simpler for the purposes of pattern detection or pattern breakage: Patterns are defined as "solutions of problems in a context" with a body of "descriptions of forces.” Pattern detection is often about looking for something “hidden,” which is not always so obvious in order to improve decision effectiveness. In other cases, perhaps you need to break down some outdated mindsets, old habits or patterns in order to make better decisions and take alternative approaches to solve problems.

It is the very perspective to develop visualization methods which can leverage multi-factors in discovering patterns or hidden meanings in either internal decision factors such as decision goals and situation, decision context, relevant knowledge, resource, and capability, etc, or the external factors such as technical factors, political and legal conditions, competition and consumer demands, etc. To avoid the trap of emotional turbulence or individual perception, you have to think critically and look holistically at the problem domain in order to discover patterns via digging beneath the superficial layer, leveraging insight and foresight, acting on the system with the pattern language applied to improve decision maturity.

Decision effectiveness relies on an agreed common approach, not a predetermined set of "one size fits all" planning. Ineffective decision-making becomes one of the biggest root causes to fail businesses due to dynamic business reality with "VUCA" characteristics. The forecast-based decision-making scenario includes understanding the need, setting good principles and guidance, engaging key stakeholders, harnessing effective communication, leveraging information to forecast, and assessing alternatives to improve decision management effectiveness and efficiency.


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