Embedding a Unified Decision-Making Process
ENABLING HIGH-QUALITY DECISION-MAKING
Media reporting and senate inquiries have amplified the scrutiny on decision-making within organisations by customers, regulators, and the public.
Leaders are no longer judged on the quality of their own decisions, but the quality of all decisions made within their organisation and those made in organisations within their supply chain.
In a McKinsey survey of more than 1,200 managers across a range of global companies, it was revealed that there were growing levels of frustration with:
- Broken decision-making processes.
- The slow pace of decision-making deliberations, and;
- The uneven quality of decision-making outcomes.
Fewer than half of the survey respondents said that decisions are timely, and 61 percent said that at least half the time spent making them is ineffective.
The outcomes of poor decisions can be seen in high profile crisis events that disrupt business operations, impact strategy, diminish market value, and in some cases, lead to the resignation of executives and board members. In many Post Incident Reviews (PIRs) the root cause is poor decision-making and a lack of critical thinking.
PIRs often highlight the ‘blind spots’ that come from not having a holistic view of the situation, and not considering all known information and impacts, before decisions are made.
The push to distributed decision-making, ‘agile ways of working’, reliance on technology and the interdependencies within the supply chain mean that executives now have little control or visibility over how decisions are made and the quality of those decisions, within their organisation and within their supply chain.
And yet, a Bain & Company survey of executives worldwide from 760 companies revealed:
- A company’s past decision effectiveness is 95 percent correlated with financial performance one year in the future.
- Companies that were most effective at decision-making and execution generated average total shareholder returns nearly six percentage points higher than those of other firms.
- Many companies have enormous scope to improve their performance. Top-quintile companies score an average of 71 out of 100 in decision effectiveness. Companies in the other four quintiles score, on average, 30 and below.
The survey demonstrated that most organisations have the potential to more than double their decision-making effectiveness.
Janellis research on decision making
Janellis held a series of Critical Thinking Labs with leaders from a cross-section of organisations and feedback on decision making within their organisations includes:
- “Decisions are made without clarity and without knowledge of who is accountable and responsible”
- “We can be too quick to make decisions without considering the facts and/or impacts”
- “We can be too slow to make decisions”
- “The quality of information is not bad, but we get overwhelmed with information”
- “We find that people rarely think through the problem and go straight to known remedies”
- “There is a lack of ‘cut-through’ and decisions are often made with bias”
- “There is no structure in our decision-making”
Participating leaders acknowledged the value of critical thinking skills, that underpin high quality decision-making and:
- The need for a framework that allows for robust, ‘safe’ and respectful conversations
- A framework that helps teams understand broader impacts across the business and to find ‘common ground’ when making decisions
- To meet the needs of the regulators who want stronger accountability, greater controls and robustness of decisions
EMEDDING A UNIFIED DECISION-MAKING PROCESS
Good decision-making is underpinned by critical thinking capabilities.
The World Economic Forum’s Future of Jobs Report ranked Critical Thinking second in its Top 10 Skills for jobs and a recent McKinsey global survey of business leaders revealed Critical Thinking and Problem Solving were the top two skills leaders most wanted from their employees.
Skills that underpin good decision-making:
Analysing: understanding the facts, assumptions, and gaps in information.
Verifying: searching and validating information from multiple sources.
Clarifying: to identify the ‘main issue or opportunity’ and exclude unimportant information.
Actioning: identifying immediate actions with incomplete or conflicting information.
Forecasting: planning for a range of potential scenarios and solutions.
Problem-solving: developing creative solutions and strategies to problems.
Perceiving: awareness of the broader impacts across the enterprise.
Collaborating: ‘active’ listening and building a ‘shared’ view.
Synthesising: ‘cutting through’ to develop a common operating picture.
Prioritising: agreeing on most important and longer-term issues and reaching consensus on key ‘critical’ decisions.
Planning: developing plans to action key items.
Communicating: identifying and communicating effectively with all key stakeholders.
Harvard Business Review (HBR) research
As part of a HBR submission on ‘best practice’ organisational resilience, a review of all projects
undertaken by Janellis with key clients revealed that:
- Many executive leaders already have strong intuitive critical thinking skills, honed through years of experience in making complex decisions.
- High quality decision making is underpinned by critical thinking skills.
- The Janellis Decision Support Tool is the process that has provided the most immediate and enduring value across industries and regions.
- Strategy, transformation and project team members apply their critical thinking skills to successfully execute on strategic initiatives.
- First responders and those responsible for protecting life and assets typically have instinctive critical thinking skills.
- Critical Thinking skills are valuable across all industries, at all levels of an organisation and for all types of decisions.
The value of a Unified Decision-making process
- Aligns cross-functional teams on complex decisions that may require many inputs
- It provides a common language to improve decision-making within and across teams.
- It enables team-based critical thinking by drawing upon the diverse skills and experience of the teams.
- Ensures that decisions are fact-based and data-driven and that all impact areas are considered
- Improves productivity and assists with the prioritisation of investments and resources
- Teams can re-orient strategy using real-time data
- Uplifts capability for team members with emerging and developing critical thinking skills.
- Provides a record of how decisions are made and ensures they are transparent and defendable.
Embedding a unified decision-making process
Leaders can embed a unified decision-making process across the enterprise in a cost-effective and efficient way by drawing upon the expertise that exists, using current business challenges and utilising technology. Key steps include:
- Business Critical. Elevate high-quality decision-making to ‘business critical’ and reach agreement at the executive and board level to embed a standardised, best practice approach to decision-making across the organisation.
- Decision-Making Framework. Identify a decision- making framework that enables critical thinking that can be used within all teams all levels of the organisation to build capability. The framework needs to be effective for rapid decision-making as well more complex problem solving and decision-making. The framework should be a simple, intuitive way to make decisions that balances both risk and opportunity, considers impacts and drives outcomes.
- Capability Assessment. Identify key personnel within the business who exhibit high-quality decision-making who can role model and champion the desired skills and behaviours. Ensure their intuitive skills are applied against the framework to provide transparency and visibility of how the decision-making thinking is occurring and to create social learning opportunities for others. Identify the high priority teams who are managing the greatest number of complex decisions and include them in a pilot program.
- Deliver a High Priority Pilot. Deliver a pilot program for high priority teams using scenario-based activities, based on current strategic projects and challenges, to gain immediate value from the process and to accelerate the capability uplift.
- Enterprise Program. Undertake an enterprise uplift program that draws upon the key learnings from the pilot program. Include social learning opportunities, scenario-based planning, and utilise leaders who have the demonstrated critical thinking skills.
- Embed Capability. Embed the process and uplift capability through an Accreditation Program that includes access to eLearning and aide memoires and technology to consolidate and maintain high- quality decision-making.
WHITE PAPER DOWNLOAD
Summary
A unified framework that ensures consistent high-quality decision making, maximises shareholder returns, provides regulatory assurance, manages risks and develops skills for the future.
Teams equipped with a unified framework can simultaneously drive strategy and manage risk, applying and developing the critical thinking skills that executive leaders have refined over years. While not every decision can be flawless, a unified framework would demonstrate that leaders have taken all reasonable steps to balance strategic pursuits with risk management.
Resources
Evolution of the Decision Support Tool
About Janellis
Janellis have been working with leaders across the public and private sector to help execute strategy and build resilience since 1999.
We have niche expertise in working with executive leadership teams and boards to prepare for and respond to some of the most complex risks and challenges. Many of the organisations we work with are owners and operators of critical infrastructure.
The Janellis Decision Support Tool has been used by leaders since 2007 in industries including aviation; banking and finance; construction; critical infrastructure; education; emergency services; energy; health; insurance; hydro;
manufacturing property; retail; superannuation; transport; utilities; telecommunications and water.
The tool enables team-based critical thinking to occur and is used by executive leadership teams, risk and response teams, transformation and project teams and board members.
Why is it important?
“Team-based critical thinking allows us to be both agile and robust in our decision making, drawing upon the brains trust of the organisation”
CEO
Energy Company
“Critical thinking skills are essential skills for our organisation when responding to the rapid onset of change”
Managing Director
Critical Infrastructure
“By developing our critical thinking capabilities our teams can manage difficult situations well and also see the opportunities to execute strategy more efficiently”
Executive Leader
Insurance
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