Slide share Hyper-Decision Making - Short Version
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The document discusses the critical importance of effective decision-making for organizational success, emphasizing that many organizations lack a systematic approach, leading to sub-optimal outcomes. It outlines various factors influencing decision quality, including organizational culture, analytical capabilities, and the need for timely data in rapidly changing markets. The author advocates for establishing domain decision councils supported by strategic business improvement teams to enhance decision-making processes and minimize the cost of lost opportunities.
Slide share Hyper-Decision Making - Short Version
- 1. The New Strategic Imperative forThe New Strategic Imperative for Organisational Success:Organisational Success: Hyper-Decision MakingHyper-Decision Making
- 2. ““Nothing is more difficult andNothing is more difficult and therefore more precious thantherefore more precious than to be able to decide”to be able to decide” Napoleon BonaparteNapoleon Bonaparte
- 3. Whether You Like it of Not, You are CompetingWhether You Like it of Not, You are Competing for the Future and the Clock is Ticking!for the Future and the Clock is Ticking! Your Organisation’s Future may well depend on the choices you make now!
- 4. Some Truths about Decision MakingSome Truths about Decision Making
- 5. 5 . Some Truths about Decision Making:Some Truths about Decision Making: Research FindingsResearch Findings Approximately 86% of organizations do not consistently follow a formal approach to ensuring sound decisions. Source: Decision Intelligence Institute International
- 6. 6 What is the best organisational culture to support consistent, effective and efficient decision making? How should you assess the quality of a decision? What are the people competencies most critical to supporting decision making success at all levels? What is the ideal infrastructure to enhance the speed and quality of decision making? What does a ‘best practise’ decision making process look like? How do ensure it is systematic, integrated and comprehensive? What is the ideal ‘sensing system’ for your organisation – the one that will deliver, consistently, the best quality information and the right information when you need it for any decision situation? How does lack of alignment with your organisation’s purpose and vision reduce the ‘optimality’ and the ultimate impact of any decision you make? What are the unique factors about your organisation’s context and/or operating environment that will most heavily influence your decision making success or failure – making it unique and different from any other organisation? Is decision-making in your organisation at least a ‘zero-sum’ game? What this Research Does Not Tell YouWhat this Research Does Not Tell You
- 7. Why you need an excellentWhy you need an excellent ‘Sensing‘Sensing System’System’ to ensure the right actionableto ensure the right actionable information is available when you needinformation is available when you need it to drive the best decisions consistently!it to drive the best decisions consistently!
- 8. The Changing Requirements for Information Rapidly Changing Stable Stable Rapidly Changing MarketConditions (customers&competition) Technology Where is your organisation today? How fast is your operating and market environment changing? You are competing for the future. The clock is ticking. How do you ensure you are a ‘winner’ not just an ‘also ran’? Information is one of the keys to success! Increased need for “real” time data & information •Customer •Market •Competition © Dr. Ted Marra
- 9. Decision Science is Really Quite SimpleDecision Science is Really Quite Simple As there are only two DecisionsAs there are only two Decisions that can ever be made!that can ever be made!
- 10. 10 You can ‘do nothing’ or ‘do something’ – that’s it! The issue is that both have consequences! If you ‘do nothing’ what are the risks and consequences? If you ‘do something’ what will the consequences be – the ripple effect? Now - as well as in the future? That is, will your decision now preclude you from doing something important for the organisation in the future? To complicate matters, when you ‘do something’ there are always ‘multiple’ actions you can take! Which one will be closest to being optimal and how do you assess the impact or gauge the outcome? Do you have the right analytics to support you? Or are you using ‘gut feel’? How do you ensure the best outcome for your organisation? How and how well do you assess or forecast potential unintended consequences? Decision Science is Simple!Decision Science is Simple!
- 11. Critical Issues to ConsiderCritical Issues to Consider
- 12. 12 Decision making is NOT an exact science. However, the good news is that there are methodologies and tools which can significantly improve your odds of getting it right – first time, every time! Plato once said that ‘Incomplete information is worthless’. The fact of the matter is that decisions are made by the millions everyday based upon incomplete information! However, what is true is that with the dynamic and turbulent operating environments in which most organisations find themselves today, incomplete information is only one of the decision related issues they face. The others include, but are not limited to: The need for faster decisions – to be more agile Growing complexity – more variables/parameters to consider which can influence the decision made as well as the outcome achieved Ever greater risk or uncertainty as the gap between the information needed for the optimal decision and the information available – both in terms of quality and quantity - is growing Knowledge can become obsolete more quickly which is why continuous learning is key Accurately determining the desired outcome or how to achieve it is a nontrivial exercise – it cannot be based upon guesswork but must now include hard and most appropriate analytics . Critical Issues to ConsiderCritical Issues to Consider
- 13. 13 So, just how important is effective and efficient decision making to the future success of your business? (scale of 1-10) What are those strategically important positions within the organisation where you need to make the best talent to make the best decisions possible on a consistent daily or weekly basis? What is the economic value of the decisions your organisation makes every week or quarter? The costs associated with the decision? The benefits (impact) of the decisions? Are you breaking even? What do you do e.g., actions do you normally take) when the decision made does not have the desired impact? What is the cost of a bad decision – tangible as well as intangible? What if you could increase the % of ‘optimal’ decisions made in your organisation from where it is now to 80%+ on a consistent basis, would that have value? The Decision Intelligence Institute International estimates that it is not unusual for 40- 50% of decisions to be sub-optimal and/or to fail to meet their expected level of impact The sooner you can make the best – the ‘right’ decision for the organisation, the sooner you can start reaping the benefits! Sometimes, ‘small moves smartly made’ yields greater results! . Critical Issues to ConsiderCritical Issues to Consider continuedcontinued
- 14. The Critical Success FactorsThe Critical Success Factors Behind Effective Decision MakingBehind Effective Decision Making
- 15. 15 . The Critical Success FactorsThe Critical Success Factors Behind Effective Decision MakingBehind Effective Decision Making IT / Sensing System & Analytic Capability Culture: Values /beliefs & Practises Unique Business Context Alignment with Purpose & Vision Infrastructure Based on Whitepaper By Dr. Ted Marra on Hyper-Decision Making Decision Process: Systematic Integrated Comprehensive Constraint Free
- 16. The Decision Making ProcessThe Decision Making Process ““High Level” ViewHigh Level” View
- 17. 17 . The Decision Making ProcessThe Decision Making Process “High Level” View“High Level” View “Systematic, Integrated, Comprehensive” Moving Toward Hyper-Decision Making Decide** Feedback Loop to Planning and Future Decision Making and Execution • = Identify, collect and analyse the right and most comprehensive data and information; ensure that not only core decision factors but also other ‘influencing’ factors are considered; include a rigorous evaluation (not just a ‘gut feel’) of the potential consequences of alternatives including what would happen if only 50% of the desired impact occurred; the value created and/or delivered and to whom; what if we did nothing? ** = Is the decision approaching optimality? *** = Is the execution flawless? **** = Are the right , best and most advanced analytical tools being utilised for assessment? Decide**
- 18. The Truth About RiskThe Truth About Risk
- 19. 19 Complexity Number of variables/parameters and an inability to be able to separate high impact variables from low impact ones Inability to recognise inter-relationships/linkages Inability to understand ‘cause and effect’ relationships Incomplete information Dysfunctional, inappropriate ‘sensing system’ (Strategic Enterprise Information Architecture) Lack of integration of data sources and analytics ‘Sensing system’ is not comprehensive – critical pieces are missing Too much data and not enough actionable information which is needed to drive effective and efficient decision making Questionable Information Quality such as: Timeliness Reliability Accuracy Failure to identify emerging trends or see patterns in the data soon enough Lack of anticipation or failure to be proactive Use of misleading or inappropriate indicators For example: market share being used as a surrogate measure of customer satisfaction Use of high level indicators which are ‘insensitive’ to changes For example: focus on ‘profitability’ rather than the ‘drivers’ of profitability such as customer satisfaction, service quality or willingness to recommend The ‘Drivers’ of RiskThe ‘Drivers’ of Risk
- 20. The 9 Areas for Potential ValueThe 9 Areas for Potential Value Creation and Delivery as a Result ofCreation and Delivery as a Result of the Decisions You Makethe Decisions You Make
- 21. Brand Image/ Reputation Process Product Service Customer Support Technology Information The Stakeholder Experience People The 9 Areas of Opportunity to CreateThe 9 Areas of Opportunity to Create and Deliver Valueand Deliver Value From a Book By Dr. Marra The Wisdom Chronicles: Competing to Win, Volume I
- 22. The Four Signs of Decision DoomThe Four Signs of Decision Doom
- 23. 23 Lack of clarity on the desired outcome Decision process is not systematic, integrated and comprehensive Failure to appropriately consider outside influences Decision process is not systematic, integrated and comprehensive No broad exploration of consequences – positive or negative Lack of use of most appropriate advanced decision analytics and their integration into the decision process Missing feedback loops Decision process is not systematic, integrated and comprehensive The Four Signs of Decision DoomThe Four Signs of Decision Doom Blog: Decision Intelligence Institute International and comments from Dr. Marra
- 24. The Cost of Lost OpportunityThe Cost of Lost Opportunity
- 25. 25 The Four ‘Drivers’ of the cost of lost of opportunity: Timing – slow speed of decision making The ‘window of opportunity’ is missed Execution – flawed or flawless? Optimality of the decision – how far from the ideal decision are you? Lack of a formal process - one which is not systematic, integrated and comprehensive The Cost of Lost OpportunityThe Cost of Lost Opportunity
- 26. 26 The Cost of Lost OpportunityThe Cost of Lost Opportunity & How it can Work Against You& How it can Work Against You 0% 100% Planned Impact of Decision Impact lost due to slow decision making Impact lost due to poor execution Net impact of decision Impact lost due to sub-optimal decision Impact lost due to lack of having a systematic, integrated, comprehensive approach
- 27. The Focus of Decision Making:The Focus of Decision Making: Domain Decision InfrastructureDomain Decision Infrastructure And Key Decision PositionsAnd Key Decision Positions
- 28. Decision Action Modified by Dr. Ted Marra, Informed Decisions What we needto know Desired Outcomes Our Behaviours Big Decisions are about the future! Big DataBig Decisions are about the future! Big Data is about the Past – Steve Jobsis about the Past – Steve Jobs
- 29. The Focus of Decision MakingThe Focus of Decision Making Larger, more complex decisions often intersect a number of domains within an organisation. In these cases it may be appropriate to break or decompose the decision into smaller pieces – ‘small moves smartly made’ works well even with so called ‘wicked problems’ (see Steve Tendon, ‘Hyper-Productivity’) as does ensuring involvement of those most appropriate to the decision through Domain Decision Councils and their supporting SBITs (Strategic Business Improvement Teams). This approach can not only speed the decision making process but improve the quality or optimality of the decision and reduce the time requirements for senior executives. Often there is a logical sequence that can be followed or elements that can be examined in parallel. Then the pieces can be brought together in a collaborative meeting of all appropriate Domain Councils and their SBITs. Agility and resiliency must be maintained as keys to competitiveness! Operational Excellence Domain Council Relationship Mastery Domain Council Competitiveness and Growth Domain Council Human Performance Excellence Domain Council Key Decision
- 30. 30 Over the years of practise, Dr. Marra has found that forming at least four (4) key Domain Decision Councils each supported by a cross-functional strategic business improvement team of high potential individuals can not only speed decision making significantly, but get you closer to making an optimal decision – thereby minimising the ‘cost of lost opportunity’ The four Domain Decision Councils we recommend as a starting point are: Operational Excellence Council Human Performance Excellence Council Relationship Mastery Council Competitiveness and Growth Council The Value of a Domain DecisionThe Value of a Domain Decision InfrastructureInfrastructure
- 31. 31 As stated, each Council is supported by a Strategic Business ImprovementTeam (SBIT) The members of the Council represent a subset of the leadership team (management committee) They may NOT, however, always be the ‘usual suspects’. For example, the Human Performance Excellence Council may have the CIO or CTO or CFO on it. The CEO is also assigned to a Council or possibly more than one. Attendance at meetings is mandatory! The SBIT members also attend these meetings and in many cases make presentations/lead discussions to share progress or other data and information they have collected with the guidance of Council members to enhance the decision making process and monitor its impact. Development of individuals in the SBIT’s is also a prime objective – getting them ready to play larger roles in the organisation In addition to the decision making accountability of the Council and involvement of the SBIT, these two groups should also bear responsibility for helping to build the capability of the organisation in the domain area consistent with the organisations Key Business Objectives and strategies The Value of a Domain DecisionThe Value of a Domain Decision Infrastructure (continued)Infrastructure (continued)
- 32. An Example Relationship MasteryAn Example Relationship Mastery Decision Domain Council StructureDecision Domain Council Structure ““The Customer Listening Post Team”The Customer Listening Post Team” AT&T Universal Cards – A World-Class OrganisationAT&T Universal Cards – A World-Class Organisation
- 33. AT&T Universal Card Services Management Led Operations Feedback Strategies Customer Expectation Research Direct Customer Feedback Process Management Selected Feedback Strategies Data Service Examples Customer Satisfier Survey Customer Value Tree Data Source Ex. Cust. Satisfier Srvy. Benchmarking Performance Research Data Source Ex. Commendations Suggestions Complaints Non-contact Assoc. Call Monitoring Cust. Retention ERC Feedback Data Source Ex. Cust. Contact Standards Cust. Contact Monitoring Call Type Trend Data See Item 5.2 Organisation Improvement Activities Customer Listening Post Team Long Term Modification of Existing Polities/Procedures & Standards Short Term Integration of Cust. Feedback into the Strategic Planning & Product/Service Development Processes (see Item 3.1 Customer Relationship Management Strategies FeedbackLoop
- 34. Strategic Decision Making:Strategic Decision Making: The Role of the Leadership TeamThe Role of the Leadership Team
- 35. Operational Management Execution & Excellence Sensing System Strategic Thinking; Competitiveness & Growth; Teamwork Leadership Dr. Ted Marra Strategic Decision Making Create and Deliver Value; Achieve Optimality; Minimise the Cost of Lost Opportunity Business Model/Context: Purpose Values Principles of Engagement Renewal Vision Human Performance Excellence Operational Excellence Relationship Mastery One View of the Strategic DecisionOne View of the Strategic Decision Making DomainMaking Domain
- 36. Our greatest managerial failure rate comes in the step from middle to top management. Most middle managers are doing essentially the same things they did on their entrance jobs: controlling operations and fighting fires. In contrast, the top manager’s primary function is to think. The criteria for success at the top level bear little resemblance to the criteria for promotion from middle management. The new top manager, typically, has been promoted on the basis of his ability to adapt successfully. But suddenly he’s so far away from the firing line that he doesn’t know what to adapt to—so he fails. He may be an able man (or woman), but nothing in his work experience has prepared him to think. He hasn't the foggiest notion how one goes about making entrepreneurial or policy decisions. That’s why the failure rate at the senior-management level is so high. In my experience, two out of three men or women promoted to top management don’t make it; they stay middle management. They aren’t necessarily fired. Instead, they get put on the Executive Committee with a bigger office, a bigger title, a bigger salary—and a higher nuisance value because they have had no exposure to thinking! Peter Drucker on the Matter of ‘Thinking’Peter Drucker on the Matter of ‘Thinking’ The Basis of Sound and Strategic Decision MakingThe Basis of Sound and Strategic Decision Making
- 37. The Concept of Optimal DecisionsThe Concept of Optimal Decisions
- 38. 38 What is the cost of NOT making the optimal decision? What % of the decisions made by those individuals in the ‘key strategic positions’ of your organisation are optimal? Are you at least playing a ‘zero-sum’ game? How do you know? Decision making in organisations covers a continuum from Level One to Level Five where Level 5 is Hyper-Decision making Level One is characterised by such things as: People who tend to be indecisive; risk averse; or overconfident to the point of recklessness or lack discipline; or are lone wolves – not team players A process which is ad hoc; focused on firefighting; takes the path of least resistance; tends to be incremental There may be responsibility, but less accountability or sense of ownership; sometimes the focus for decision making is blurred The IT systems and databases are fragmented; representing ‘islands’ of information which are difficult to integrate; there is questionable data reliability HR systems do not recognise, reward or include in performance evaluation related to key competencies of decision making The culture tends to be blame oriented; trying to find people doing something wrong; draconian in nature . Optimal DecisionsOptimal Decisions
- 39. 39 A decision will be considered ‘optimal’ if and only if #1 and at least 4 out of the remaining 7 criteria are met: 1. The decision either creates or delivers value or both to ensure stakeholders receive benefits 2. The decision is executed flawlessly to ensure the desired and/or maximum impact/outcome is achieved 3. The decision is in alignment with or consistent with the organisation’s purpose and vision 4. All behaviours and practises in which the organisation engages throughout the formulation and execution of the decision must be consistent with the values/beliefs of the organisation 5. The decision must contribute to enhancing the competitiveness of the organisation 6. The decision must reflect/reinforce the organisation’s agility/resiliency 7. The ‘cost of lost opportunity’ is minimised 8. The decision is the right one for the business – better ensuring its long-term future Another perspective: What decision will produce the greatest value for the most stakeholders in the least time and with the least investment? . Optimal DecisionsOptimal Decisions
- 40. The Path to Hyper-Decision MakingThe Path to Hyper-Decision Making
- 41. 41 . The Path toThe Path to Hyper-DecisionHyper-Decision MakingMaking Determine the Decision Intelligence Quotient of Your Organisation +Perform Gap Analysis Identify your organisation’s key decision making positions Select an Organisational Domain for Design and Development of Pilot ‘Sensing System’ Form an SBIT and Domain Council, Assign Ownership + Provide Support as Required Design and Develop a Pilot ‘Sensing System’ including Integration of Analytical Techniques Link Pilot ‘Sensing System” to a Systematic, Integrated, Comprehensive Decision Process Assess, learn, innovate Enhance agility and resiliency Formulate and Execute Rollout Plan to other Parts of the Organisation Achieve Hyper-Decision Making & Enhanced Competitiveness Outcome: Superior Organisational Performance
- 42. A Brief Note onA Brief Note on Agility and ResiliencyAgility and Resiliency
- 43. 43 Agility and ResiliencyAgility and Resiliency Dr. Ted Marra’s ViewDr. Ted Marra’s View Agility: ‘The capability of an organisation to identify, assess and act (e.g., decide and execute) better and faster than competition’ Resiliency: ‘The capability of an organisation to anticipate/identify problems*, assess their severity and take appropriate corrective action with appropriate sense of urgency to eliminate them and prevent their reoccurrence therefore avoiding unnecessary losses or collateral damage’ Recovery and a return to a normal performance trend is key. Focus is on minimising variability in the performance trend. A documentation/audit trail is a requirement. A lessons learned session is a key to future success: What could we have done better? What could we have done differently? What could we have done faster? How could we have developed a more innovative solution and what would that have been? What would the value have been? Did we have the right people involved? * This includes ‘wicked problems’ – see Steve Tendon, ‘Tame the Flow and Hyper-Productivity’
- 44. A Senior Executives WorldA Senior Executives World Decision EnvironmentDecision Environment
- 46. Internal Organisational Working Relationships , Key Strategic Stakeholder Relationships & Segmentation Cultural Profile (e.g., behaviours and practises) and Evolution; Core purpose; Vision; Mission Agility, Resiliency Strategic Information Architecture, Big Data & Data Mining, Managing Complexity Renewal: Innovation, Adaptation; Learning, Operational Excellence, Efficiency Human Performance Excellence Leadership System, Profitable Growth, Competitiveness Strategic Alignment & Execution, All One Team Governance Strategic Capability, Value Creation and Delivery, Assessing Organisational Potential, Maintaining Competitive Advantage, Long-term Sustainability* © Dr. Ted Marra, Informed Decisions * Sustainability includes key financial measures A Look at the Exciting and Sometimes Frightening World Of Today’s Executive and Their Decision Environment