The High Cost of a Poor Decision Making Framework

In my career, I have seen first-hand the high cost of organizations failing to make decisions. Several factors lead to organizations being hamstrung in moving forward on intiatives. Consider the following comments or requests executives make when in the process of making decisions:

• We need to get more information.
• Our organization is unique.
• What if we make the wrong choice?
• Let's understand all of the impacts before moving forward.

These concepts and ideas sound great and have merit, however, in today's speed of business the failure to make decisions or the long drawn out process of decision making can be extremely costly. In addition, failure to decide and extending the length of a project or initiative can add both substantial costs and risks to meeting organizational objectives.

Taking More Time Does Not Generate Better Decision-Making

Executive decision-making can be a lengthy and drawn out process, however, frequently that is not the answer to improving the effectiveness or quality of the solution. Time, in and of itself does not equate to more effective decision-making. In fact, introducing more time to the decision-making process may lead to symptoms or organizational plodding:

• Procrastination.
• Lengthy vendor or solution comparisons.
• SWOT analysis on other tools and solutions meeting similar business problems.
• Vendor sales pitches to solve problems within the organization that do not exist.

Employ Laser-Focus on the Business Problem

Efficiency in solving business problems is best facilitated in providing laser-focus on identifying and validating the business problem. Define the core issue facing the organization. Do Not immediately jump to solutions once you think you understand the problem. Drill down and validate some key facts surrounding the identified issue:

• What is the core business problem that must be addressed?
• Why is this a problem? - Hint: This is the most important question you must ask.
• What happens if we don't address this problem.
• What value does solving this problem bring to the organization?

Focusing on the business problem will provide context around the issue-at-hand and provide context surrounding the priority that should be placed on solving the identified problem. If you cannot effectively identify the value gained or negative positive impacts of not solving the problem, additional validation effort should be spent in this area, however, this need not be a lengthy exercise. Defining and validating core business problems should be able to be completed in hours or days, perhaps one to two weeks if additional research and data mining are required.

Proceed to Potential Solutions

Once a business problem has been appropriately defined and validated, identify potential solutions. Consider solutions tailored to the problem rather than market-trends, sales presentations, or whimsical market analysis. Remember, you are solving a problem that is specifically related to your business. It is easy to jump on the trend bandwagon of seeking a solution because it is hot or important in the market, however, it is more prudent, cost-effective, and efficient to select a solution alternative that is directly targeted to the problem identified. Organizations pay executives and leaders to solve problems and make decisions that have the most effective impact on their business. It is better to seek solutions to actual business problems rather than to offer a solution that is looking for a problem.

Adding Improper Solutions Magnifies Problems that Already Exist

In my professional experience I have seen countless examples of organizations selecting software or tools for their organization to solve a problem that the organization does not have. In the end when the solution misses the mark of solving a specific business problem, the issue that existed prior to the implementation of the new solution is now magnified because it has escaped being managed by both a prior and a new solution. In fact, the application of a new solution that does not solve a core business problem, now elevates the business problem to new heights in the organization creating new managerial nightmares, headaches, and sleepless nights because the solution does not solve the key problem.

Changing Course in Solving Business Problems

As I have witnessed organizations utilize either prescriptive or adaptive approaches to problem-solving, the approach to change management is equally critical in making course corrections as it was in making the original decision. This should never be the case. The steps to identify and validate the business problem that were identified previously should not be skipped when changing a course of action or altering previous decisions. Every organization should be open and flexible to changing and making course corrections as they learn new information, however, going back to the initial discovery and identification of the core business problem is equally important when changing a decision as it was in making the original decision.

Don't Skip Problem Identification and Validation When Making Course Corrections

While executive decision-making is often too cumbersome when identifying core business problems, an interesting dynamic can occur in making changes to the original decision. Organizations can develop a knee-jerk reaction to changing courses of action based upon new information, upper-level feedback, or market trends. The most important advice I can give in this scenario is to avoid a knee-jerk reaction when making course corrections from you original business decisions. It is now more critical than ever to re-evaluate the core business problem and validate that it has been identified correctly. Apply the value and risk criteria identified previously to the business problem at hand. Consider all solution alternatives that may be applicable. Then make a decision on the best course of action.

Create a Process that Works for your organization

To ensure your organization is able to make decisions in a timely manner and adapt and adjust to changes and external pressures be sure to create a process that focuses on the business problem rather than the solution. When you are able to effectively identify the problem(s) you are facing, the approach you take to evaluate solutions will be more efficient and more effective. You will have a laser-focus on the problem at hand and when you need to change course you will provide the necessary due diligence to ensure that course corrections are issue driven.

The last thing you want to do is bring unsolved problems that existed before implementing a change initiative into the new solution environment.

Comments and questions on this topic are welcome.