For better or worse, our decisions and those of the other members of our organization define today’s realities and tomorrow’s outcomes. In a world that is becoming increasingly knowledge based, more and more members of an organization are making impactful decisions every day; thereby extending decision-making’s importance from the executive suites to the desks of the vast majority of professionals.
Decision-making can be categorized based on the time frame in which associated actions will yield observable results. Near-term decisions are often supported by predetermined guidelines to enable more rapid decision-making while long-term decisions, clouded by the ever increasing uncertainty of changing conditions, rely more heavily on broad philosophical principles and decision-maker experience. The four general decision-making categories are:
Near-Term Decisions: decisions supported by policies, procedures, schedules, and regulatory guidelines
Category One: immediate actions taken in response to emergent conditions as directed by procedure. These decisions seek to seize advantage of momentary opportunities or avoid adverse consequences associated with rapidly changing conditions. Decisions of this type should be supported by procedural guidance whenever possible to improve consistency and predictability of response; thereby minimizing the organization’s risk exposure. Examples include: buying or selling of commodities when a target price is reached and actions taken in response to changing operating system conditions.
Category Two: day-to-day choices regarding activities and resource allocations. These decisions have immediate impact on the organization and may have unrecognized or less predictable long-range impacts. Decisions in this category are frequently supported by pre-established performance standards, policies, and schedules. Examples include: daily work scheduling and task assignment and procurement choices between vendors for a one-time purchases.
Long-Term Decisions: decisions made in the absence of procedural guidance and shaped by market trends, regulatory policies, and societal norms
Category Three: intermediate range decisions made in response to more slowly evolving trends where it is believed a particular desired outcome may be achieved in the days, weeks, or months ahead if a particular course of action is pursued today. Decisions in this category may have both near- and long-term impacts on the organization. While not directly supported by policies, procedures, or regulatory guidelines, these decisions often leverage guiding principles or intent to establish a target end state. Examples include: decisions made in response to slowly degrading equipment where failure is likely, vendor selection where contracts will be entered into for annualized periods, equipment leases other than hourly or daily rentals, monthly scheduling, and hiring and termination decisions for first line management positions and below.
Category Four: long-range or strategic decisions define near- and long-term actions seeking to achieve results that will be years in the making. While influenced by the organization’s mission, vision, values and regulatory policies, these decisions are largely shaped by broader market trends. Subsequently, decisions in this category have the highest degree of uncertainty because of their long time horizon and the increasing uncertainty associated with market prediction over time. Examples include: construction of new facilities, major equipment replacements, expansion of product lines, mergers and acquisitions, and hiring and termination decisions for senior managers and executives.
Regardless of their impact time frame and the immediacy in which they are made, all decisions go through a similar process that begins with condition recognition and ends in action. Phases of decision-making include:
Identification Phase: condition evolution, condition recognition, condition reporting
Scope and Significance Identification Phase: condition scoping, condition resolution cost-benefit and risk assessment, action need determination, action response prioritization
Action Plan Development Phase: alternative development (including cost-benefit and risk assessments for each alternative), alternative selection, and communication and action plan development (for the selected alternative)
Action Plan Implementation Phase: communication and action plan implementation, follow-up condition monitoring, decision evaluation, and action plan adjustment
Organizational Capabilities and Cultural Development Phase: decision-making process training, performance expectations established and reinforced, questioning attitude developed and reinforced, decision-making self-assessment and lessons learned communication
The final phase, Organizational Capabilities and Cultural Development, is an enabler of decision-making. This phase occurs on an ongoing basis; creating an organizational mindset that enables both the recognition of decision opportunities and helps the organization learn and grow from its decision-making successes and shortfalls. Strong execution of the Organizational Capabilities and Cultural Development Phase is a hallmark of organizational excellence.
Focus of the Decision-Making Forum
Decision-making is a complex process that when done well enhances both strategic planning and tactical business execution. Materials within this forum explore the four categories of decision-making, underlying concepts, and performance best practices and warning flags. The following articles, podcasts, documents, and resources cover those topics critical to effective decision-making.
- Evaluating Decision Options, part 1 of 3 [StrategyDriven Premium Content]
- Evaluating Decision Options, part 2 of 3 [StrategyDriven Premium Content]
- Evaluating Decision Options, part 3 of 3 [StrategyDriven Premium Content]
- Best Practice – There Can Be Only One [StrategyDriven Premium Content]
- Best Practice – Multidiscipline Teams [StrategyDriven Premium Content]
- Best Practice – Broad Commitment [StrategyDriven Premium Content]
- Best Practice – Identify the Target [StrategyDriven Premium Content]
- Best Practice – Ongoing Decision Evaluation [StrategyDriven Premium Content]
- Best Practice – Follow-up Assessments [StrategyDriven Premium Content]
- Best Practice – Identify the Decision-Maker [StrategyDriven Premium Content]
- Best Practice – Observe the Opportunity or Problem First Hand [StrategyDriven Premium Content]
- Best Practice – Never Let It Go Without Saying [StrategyDriven Premium Content]
- Best Practice – Establish Decision Execution Performance Measures [StrategyDriven Premium Content]
- Best Practice – Evaluate the Front Page Headline [StrategyDriven Premium Content]
- Best Practice – Diverse, Redundant Data Sources [StrategyDriven Premium Content]
- Best Practice – Document the Decision-Making Process [StrategyDriven Premium Content]
- Best Practice – Balanced Use of Knowledge and Experience [StrategyDriven Premium Content]
- Best Practice – Identify the Unintended Consequences [StrategyDriven Premium Content]
- Best Practice – Identify the Worst that Could Happen [StrategyDriven Premium Content]
- Best Practice – Informal Advisors [StrategyDriven Premium Content]
- Best Practice – Dealing with Assumptions [StrategyDriven Premium Content]
- Best Practice – Identify the Decision Timeframe [StrategyDriven Premium Content]
- Warning Flag – Logic Fallacies Introduction [StrategyDriven Premium Content]
- Warning Flag – The Gamblers Fallacy [StrategyDriven Premium Content]
- Warning Flag – Weak Analogies [StrategyDriven Premium Content]
- Warning Flag – ad hominem: Personal, Not Issue Attacks [StrategyDriven Premium Content]
- Warning Flag – The Silent Nod [StrategyDriven Premium Content]
StrategyDriven Expert Contributor Articles
- Decisions are Never Emotional by Sharon Drew Morgen
- Decisions, decisions – how good at them are you? by Jeffrey Gitomer
StrategyDriven Podcast – Special Edition
- Evaluating Decision Options [StrategyDriven Premium Content]
- Decision-Making Base Model [StrategyDriven Premium Content]
- Stakeholder Commitment Evaluation [StrategyDriven Premium Content]
- Opportunity and Problem Statement Development [StrategyDriven Premium Content]
- Decision Alignment Model [StrategyDriven Premium Content]
Time and again, organizations – like people – focus on overcoming weaknesses to improve performance. But like people, far more can often be gained by advancing the company’s strengths. Strength in this sense is not simply a corporate competency; rather, it is something the organization can consistently perform at world class levels.
Organizations focusing on their strengths realize several strategic advantages over their competitors. A focus on activities of strength implies reduced managerial attention and resource application to weaknesses; freeing these to further advance the company’s strengths. Workers feel a greater sense of accomplishment with the company’s increased success; improving employee engagement which often leads to an improved public image, both of which build on the strengths.
Focusing on strengths does not imply a lack of awareness or activities to eliminate weaknesses. In fact, it is important that weaknesses be reduced to a level that appropriately manages the risk of exploitation by competitors and minimizes their interference and distraction to the achievement of strength activities.
StrategyDriven contributors recommend several resources that elaborate or compliment the Focus on Strength best practice including:
Jack: Straight from the Gut
by Jack Welch
The Effective Executive: The Definitive Guide to Getting the Right Things Done
by Peter F. Drucker
Now, Discover Your Strengths
by Marcus Buckingham and Donald O. Clifton