Transforming decision-making processes within organizations

Although decision making frameworks have been evolving throughout the years, and it is possible that soon AI and Cognitive Capabilities will be playing a major role in the field, the important components that allow to assess not only the outcome but the process itself remains the same. Moreover, organizations tend to evaluate only the outcome, the results of the decision made, but the decision-making processes are hardly ever challenged or even assessed. What is more, there are key drivers that will set the decision-making framework in which organizations will make decisions. Furthermore, data is essential to make grounded decisions, but organizations tend to focus on data quantity instead of quality and integrity as well as usually all the efforts are devoted to providing information requested by regional and global levels, instead of using the data to gain process knowledge and performance feedback at a local level. Therefore, the current decision-making context for most organization is not one without data, but with issues regarding to data’s quality and integrity which increases the chances of having wrong decisions as well as diminishes the effectiveness of the decision-making process. However, is not enough having data with quality and integrity to ensure timely decisions in place, in search of global alignment reporting processes have not only become bureaucratic but also prevent the organization for making timely decisions.     

Effective decisions: data quality and integrity

To begin with, it is important to understand that excess of data without quality and integrity could be even more dangerous than not having data and relying completely on expert’s judgement. Even though today “data should not be used as a drunk uses a lamppost” because meaningful insights can be obtained from data and it is not “only” used as support, without quality and integrity as well as with the belief that data by itself can be enlightening without experts’ support, organizations can make worst decisions than by relying on experts’ judgement. In addition, the “black-box” model which assumes that all relevant information for decision making is contained in the data, therefore the experts (SMEs) new role is being just a “data” supplier, is at the heart of data quality and integrity issues. Moreover, best decision will be grounded on both data and experts’ knowledge, because the interaction between SMEs and data will ensure not only quality and integrity of “living” and “in-used” data but also will drive SMEs and organizational learning process by gaining process knowledge and performance feedback. Furthermore, the “black-box” model is not only “over-rating” the value of data but also of the reporting process' one, in detriment of both SMEs and the process itself, by reducing the firsts to data suppliers and the later to a “black-box” that can be managed from elsewhere only by using data.  

Timely decision-making processes: empowerment and transparency

Another aspect to consider, is the unintended effect that centralization processes in search of global alignment had on both empowerment and transparency. Since reporting processes are usually ran on monthly, quarterly and yearly basis, the visibility of processes’ performance is reduced only to that revision “windows”. What is more, the already mentioned “black-box” model not only broke the relationship and interaction between SMEs and data, but also disempowered the later by reducing them to only data suppliers instead of being main users of them. Moreover, SMEs disempowerment reduced their accountability not only in decision making but also in acting based on process current performance. Furthermore, SMEs’ lack of engagement with data as well as the use of the later “only” for reporting purposes, led to delays in uploading data to ERPs and other systems, limiting organization’s ability to have real-time information from process performance. Since the information is not use real-time, there is no need for uploading data ASAP to increase performance transparency. In addition, SMEs’ disempowerment makes impossible for an organization to make timely decisions, because performance reviews are “retrospectives” not assessing the current process performance but what happened in the past. Therefore, the delays between data gathering and analysing as well as reporting and finally acting, end up reducing not only process performance but also organizational agility and adaptability.     

Deploying effective and timely decision-making processes

Although data’s value has been enhanced with technology to be more than a support for decision making and meaningful insights can come from the data, it is important to keep people’s value not only as data suppliers but also as the first line of analysis. Firstly, by making the SMEs the first users of the data the organization is ensuring their accountability regarding data quality and integrity. Moreover, the organization should not only be looking for SMEs’ accountability for data outputs, but also for SME’s active engagement in the data gathering process. Furthermore, it is essential to strengthen the relationship between SMEs and data, by helping the first to see the later as an enabler to drive both their learning about the process and continuous improvement. Secondly, the organization should reach a balance between alignment and agility, considering that the ability to adapt and cope with changes in the environment, heavily relied in the later. What is more, it is essential to empower local levels by developing both analytics and problem-solving capabilities. Moreover, the empowerment requires not only to delegate acting upon the issues, but also decide about them which will require to analyse data. Therefore, daily and weekly performance reviews must be deployed to increase transparency in performance, enabling local analysis and decision making, which can afterwards be completed with those performed at regional and global levels. I would like to conclude with Peter Drucker’s quote “Most discussions of decision making assume that only senior executives make decisions or that only senior executives’ decisions matter. This is a dangerous mistake”.

Thanks for Reading. 

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Kind Regards.

Marcelo