Three steps to a better decision-making environment

19 October 2020 Consultancy.uk

Managers make hundreds of decisions every day, consciously and subconsciously, both aware of consequences and ignorant of them. Irrespective of how decisions are made, getting them right is key. Gavin Fallon, General Manager UK, Nordics & South Africa at Board International, shares three steps for better decision-making.

Some people are great at decision-making, some are not. To be decisive is a positive; who wants to be labelled indecisive? This is particularly true at a business level. We praise the leaders who make firm decisions quickly, who can analyse different inputs and make the right choice. Increasingly, it seems, we attribute a company’s future fate to decisions they made years before.

Consider Blockbuster turning down an offer to buy Netflix, Motorola resisting the rise of smartphones, Yahoo not licensing Google’s search technology in the late 90s – all decisions regularly held up as proof of how the wrong choice leads directly to also-ran status, if not complete obsolescence.

What is the biggest challenge for your organisation in decision-making?

And yet it is rarely one moment that seals a company’s fate. More often than not, the choices we hear about are merely the most notable of a whole raft of decisions, all influenced by the culture unique to that organisation.

The common threads of decision-making

That said, there will be some common themes that rear their head within any decision-making process, all of which influence an organisation’s ability to make decisions quickly and correctly. The number of stakeholders involved, collaboration within the business, the availability of data and other intelligence, and the types of tools available to assist in decision-making and dissemination are all factors.

Plus, there is the type of decision to consider, whether strategic, tactical, or operational, and who has responsibility for decision-making. A CEO that makes lots of decisions at multiple levels may be effective in ensuring their word is seen as final, but the overall process will be much slower if a large number of tactical and operational choices have to go through such a senior executive, as well as strategic ones.

Who is responsibile for making decisions in your organisation?

Added to this is the wider context of business today – we are all operating in markets that are under constant disruption for a variety of political, social, and public health reasons. There is a need for fast, effective decision-making. The pandemic demonstrated what could happen – decisions that previously took many months and several committees were being made in days, if not hours.

Operating at a pandemic state of crisis is neither sustainable nor beneficial in the medium term. That means businesses need to have in place proper procedures and processes that facilitate accurate, timely decision-making.

Unfortunately, our latest report, ‘The State of Decision-Making’, suggests this isn’t always the case. While the majority of respondents said their decisions had a global impact, the process behind those choices is rarely uniform. Just over half use data and insights, yet what is worrying is that nearly half involve gut feeling in some way. At a time when businesses are creating data continuously, this failure to use it properly can lead to missed opportunities – a major issue when trying to excel in uncertain markets.

When making decisions, what are you most likely to rely on?

Also concerning was the challenges respondents faced when making decisions. Not enough data and insights available was the biggest obstacle for more than a quarter of respondents, while a similar number were let down by a lack of collaboration between departments. Having too many people involved was a major issue for one in five.

What about the tools they were using? Overall, internal reports came top, followed closely by spreadsheets. While these have been staples of business decision-making for many years, there is always the issue of how the data gets into these formats. With spreadsheets, in particular, often relying on manual input, it is little wonder that other research has found that up to 90 percent of all spreadsheets have errors that affect their results.

It is also telling that nearly one in five of the respondents to the survey felt that less reliance on spreadsheets would improve their decision-making process.

Which of the following do you think would improve the decision-making process in your organisation?

Three ways to fix decision-making

At a time when being able to make fast, effective decisions genuinely means the difference between success and failure, the results provide evidence that many organisations operate with a culture and processes that hinder, rather than help, decision-making. What, then, do businesses need to consider if they are to improve this critical issue?

Firstly, they need to establish a culture where only those that are absolutely necessary can be part of a decision. That doesn’t mean a select cabal dictating all company policy; it means having a clear understanding of roles, responsibility, and accountability in the decision-making process, and where the boundaries of individual remits fall.

Secondly, those with decision-making responsibility need to commit to using data and insights appropriately. Gut feelings can provide guidance, but it should be timely, accurate data that informs and provides evidence to support decisions.

Thirdly, that data needs to be captured and deployed in tools that are fit for purpose. That means ones that brings interactive reporting, planning, forecasting, and predictive analytics. By doing this through integrated business planning, senior leaders have full visibility of the entire company’s performance, allowing them to take into account everything from KPIs to operations, access instant insights, and make decisions in real-time.

Creating the right decision-making environment

Everyone wants to make the right decisions, but many businesses struggle to create the right environment in which to do so. To overcome the obstacles companies’ face, they need to establish the right culture, integrate data effectively, and deploy the right tools. Accurate, timely decisions are increasingly the difference between success and failure, and it is critical organisations make the right choices at a time when few will get a second chance.


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