Wednesday, March 17, 2021

Ineffective Decision-Making

There are many variables in complex decision making, there are tradeoffs you have to leverage, and there is no magic formula to follow.

With exponential growth of information and frequent disruptions, decision and problem-solving in complex businesses is difficult due to various reasons such as uncertainty and ambiguity of business circumstances, lack of priority, unconscious bias, outdated knowledge, or scarcity of business insight, etc. 

Business leaders and professionals need to capture the right information, predict the trends, prevent pitfalls on the way, and follow the right processes to overcome changes.

When and under what circumstances is information not being handled properly or interpreted accurately and causes misjudgment: Information precision directly impacts decision and problem-solving effectiveness. However, in many organizations getting stuck at the low level of maturity, data is in dissimilar systems which are being migrated, converted or just staying out due to budget and time constraints. If information is unavailable, inaccurate, lost, stolen, or compromised, it will delay or decrease decision effectiveness, increase the complexity of problem-solving, and mislead the business in the wrong direction,

As to judgement, virtually nothing is certain in business, so judgement must be based on the best information available, well processed and interpreted accurately. The quality of information management is for assurance-information held is safe, secure and processes are legislatively compliant; make it possible to gain real-time insight and business foresight; adoption- to ensure the right people getting the right information to make right decisions for solving right problems. It helps decision-makers at different levels of the organization to proactively leverage information and collect knowledge and insight for making effective decisions.

When and under what circumstances do the processes show dysfunctional symbols and lead to ineffective problem-solving:
Decisions are necessary as a result of limited resources in time, knowledge, capital, and people, as well as an effective process to collect feedback, frame the right problems and spec out your options, weigh them appropriately with the right people, and actually make a decision. A process is a collection of tasks assigned to specific roles, designed to convert specific inputs into specific outputs to answer specific questions. You need a sound process to frame the decision. The entire decision-making processes include understanding the need, engaging key stakeholders, ensuring effective communication, assessing alternatives, developing consensus, planning, executing, and following up. With an effective process, if you have high quality information and visualize it in different ways, then you can capture insight and make excellent decisions.

In fact, the importance of the process becomes more acute as decisions become more complex and involve more diverse stakeholders. Too many decisions do not have the ambitious performance outcomes that were intended. The decision is not necessarily bad, but the flow and sequence of the subsidiary decision implementations all encounter a different set of context dynamics. Thus, important business processes are reviewed regularly, refined regularly, so the dysfunctional symbols of processes are detected and optimized on time. Business becomes more transparent across functions and helps to improve decision and problem-solving effectiveness.

When and under what circumstances do the logical thoughts of decision-makers become clouded with mistaken judgments (beliefs) and strategic choices: Decision making is dynamic and tough nowadays. If you still leverage linear thinking to understand the digital dynamic, misjudgment is inevitable. We all have a cognitive bias, whether individually or collectively, such truths derived by imperfect people using imperfect processes will necessarily leave a measure of uncertainty. When uncritical thinking patterns such as reflexive thinking, wishful thinking, or group thinking, etc are detected, misjudgment or misunderstanding, will significantly decrease decision maturity.

In today’s digital world, decision logic is often nonlinear and multidimensional. Psychologically, ego perhaps clouds the vision and blocks critical thinking and leads to misjudgment or ineffective decision making. Low EQ causes non-critical thinking and creates blind spots. Trends and discovery of hidden connections" might be the new critical thinking that includes imaginative or resourceful thinking. It's important to dig through the root cause by asking why you make mistakes, why there is the difference, and how to realign or reorient thinking to make sound judgment, find and develop people for whom convenience is no motivation.

The characteristic of decision-making is to embrace the collective insight for achieving decision-making effectiveness and maturity. There are many variables in complex decision making, there are tradeoffs you have to leverage, and there is no magic formula to follow. 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 and solve the right problems effectively.



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