Organizational Decision Making

Thursday, July 12 2012

Leaders in organizations must make strategic decisions that consider multiple factors and a long-term perspective. In light of the ambiguity and uncertainty inherent in organizational decision making, an effective team with a systematic process is necessary in order to get the best results possible. The ambiguity arises because not all information about possible choices is ever available, and there will always be uncertainty because decisions are made for the future and no one can ever know the ultimate outcome.

To make better decisions:

  1. Understand the context.  Analyze economic, social, political, technological, demographic, and competitive trends to project light on the future. This is especially relevant if you are making decisions about mission, values, vision and strategy.
  2. Bring the right people to the table: Include those who possess key information and insights, as well as those who will lead the implementation of the decisions.
  3. Look at past and present performances of the organization to extract strengths and weaknesses. Relate them to opportunities and threats.
  4. Articulate criteria for the best choices before any ideas are put on the table; because, humans tend to latch on to solutions too early in the process.
  5. Generate lots of ideas without evaluating any of them. Ask individuals to create their own list of ideas; then have everyone share to create a comprehensive list.
  6. Have individuals score the ideas, based on the agreed criteria, to create a short list.
  7. Facilitate discussion. You are not trying to pick the best idea from the list, but to find the best elements within all the ideas in order to create new alternatives by combining them.
  8. Use consensus to make the ultimate decisions. Voting creates winners and losers.  Strategic decisions require strong efforts from everyone. Consensus ensures everyone understands, agrees, buys in, and is committed to delivering their best effort.
  9. Break the strategy down into long-term objectives describing what the organization will look like in the future.

10.  Assign a champion for every objective to define short-term goals, and create a plan to accomplish the goal.

11.  Make everyone, including the CEO, responsible to the team. Meet at least monthly for every champion to present actions and results relative to their plans and where they will be by the coming meeting.

Strategic decisions are critical to any organization. Using an effective team process to deal with the ambiguity and uncertainty will result in the best decision possible and the greatest chance of future success.