“Digital Valley” Book Tuning VI: Three Aspects in Making Effective Decisions ~ Future of CIO

Saturday, May 7, 2016

“Digital Valley” Book Tuning VI: Three Aspects in Making Effective Decisions

11:38 PM Pearl Zhu No comments

Even with the best systems and processes, there are no guarantees that you will make good decisions.

At today’s digital new normal -uncertainty, complexity, velocity, and ambiguity, the capability to make effective decisions becomes a more crucial leadership competency. There is fuzziness in the decision because there is fuzziness in conflicting criteria. An effective decision can be defined as an action you take that is logically consistent with the alternative you perceive, the information you get and the preference you have. A decision is a plan to change something in your current situation. A"decision" has lots of connotations of finality. What seems to mark those good problems solvers out from others is their ability to frame issues, problems, and decision options and turn them into potential opportunities, tangible outcomes, and inspirational change & transformation. What are the logical steps in making effective decisions, though?

Information –Insight – Decision-making scenario: The distinction between the decision quality and the outcome is important. If the decision-making scenario is well designed and executed, you have the highest probability of getting the best outcome in the state of knowledge accessible at the time of decision. Information and decision-making are intimately connected and interdependent. The information allows you to build an actionable insight as for how to move from one level to the other. Information as input to the decision-making does not absolutely determine the decision but allows the decision-maker to exercise their judgment. It applies to the context and environment in which decisions are made. Information, inclusive of data, as input is the primary driver of decisions when it applies to automated systems, not human beings. In the human context, information drives awareness, which can include all of these characteristics such as, uncertainty, surprise, difficulty, and entropy although it can also trigger a sense of confidence, confirmation, validation, verification. For decision-making to be effective, the decision-maker must have enough knowledge to make their decisions rich in information and significantly different from the available data. Because how effective the decision is depends on how capable the decision maker can climb the knowledge pyramid from data to information to insight and wisdom.

Brainstorm possible options and alternative solutions: There is too often a tendency to take a one-size-fits-all approach to decision making, which includes a linear and static decision which commits to a singular path. Decision-making today needs to take a systematic approach, but via nonlinear, collective thinking, the mix of analytics and intuition, and group contribution. Consider and compare the advantages and disadvantages of all options. Select the best option - avoid vagueness or indecisiveness. The thing, however, that the human brain cannot do, is to do a comparative assessment of many decision criteria - both quantitative and subjective, concurrently across many options, initiatives or programs etc, but the advanced decision intelligence tools can help. When leveraging the tool weighing tradeoffs, it's important that the team has determined the relative importance of each factor. Teams. Especially with the heterogeneous team setting, work because they bring different perspectives and knowledge to the table. They help to balance out the biases that from which the poor decisions are made. A decision is arguably a choice between two or more options. The greater majority of these options are circumstantially provided. One alternative may have 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. So effective decision making needs to well blend both information and intuition; think fast and slow accordingly.

Any decision made needs to be applicable in a timely manner: Decisions are necessary as a result of limited resources in time, knowledge, capital, and people. There is no such thing as a perfect decision, but it is always crucial to make the timely decision in order to take the best action you could. People with different personalities approach decision making in different ways. And some have difficulty making any decision at all, which is in and of itself a passive decision “not to decide.” Making the decision in a timely manner requires resource awareness. Resource limitations are significant and decision makers who are not cognoscente of what they can or cannot do will always make a bad decision. Effective resource allocation and utilization is an important factor for a timely decision making. Sometimes internal factors which may influence the decision process include, such as the goals of the decision maker, decision situation, decision context, relevant knowledge, as well as the organizational capabilities and resources. On the other hand, external factors can influence strategic decision-making as well, including technology factors, political and legal conditions, and competition and consumer demands.

Even with the best systems and processes, there are no guarantees that you will make good decisions, indeed the fact that something requires a decision will mean that there will be a bunch of associated risks to manage. Thus, the digital decision-making style is hybrid, you need to leverage sufficient information, and multiple perspectives, analyze and synthesize for making the right decisions at the right time by the right people.