Decision making, as you might think, is the process of gatherings facts and data in order to understand which of several courses of action will get the best result. In fact, U-Mass Dartmouth defines it as follows: “Decision making is the process of making choices by identifying a decision, gathering information, and assessing alternative resolutions.” Of course, the trouble with any decision – whether personal or professional – is the fact that you can’t see into the future. Generally speaking, you can’t know how a decision will play out until it does… in the future.
We need three key things in place to make the best decisions possible, right now, when they’re needed:
- Every bit of data that can help formulate a decision, in real time.
- Every social fact that can impact the ability to execute on a decision or its likelihood of success.
- The ability to shift gears if a decision proves to be the wrong decision.
With those three things in mind, how do things happen in the real world? Some organizations are well equipped, with the right data, the right information, and the right culture to handle all three. Unfortunately, for other organizations, effective and efficient decision making can be elusive.
- Many organizations still labor with accumulating relevant data into spreadsheets. Data becomes outdated quickly, and even during the time it takes to create the basis for a decision, the data will have changed. That’s a tough spot to be in, and it is hard to overcome that when using stitched-together systems that can’t provide you with an all-up, real-time view of your world.
- Social facts are less system-driven and more people-driven. For example, did you hear a competitor is coming out with a new product? Is there a culture change needed to support a new decision? Having a format for collecting relevant social data is critical to the decision-making process.
- Many organizations make decisions and end up living – or dying – by them. If a decision is not easily made, it can’t be easily un-made, either. This is especially true when dealing with a data lag – not understanding the impact of the decision until you see the reports from last month, depending on lagging indicators, and an absence of leading indicators are all factors here.
With access to real-time data, so you can see the impact a decision has as soon as it is put into action, you have the ability to adjust, tweak, change, and, if necessary, reverse a decision and take a different path.
- Does a new pricing structure increase sales? Do we keep it, or revise it, or reject it?
- What impact is a promotion having on our revenue? Should we run that promotion again?
- How is the new supplier working out for us?
- What’s happening with our shipping costs? Is the switch we made paying off?
- Is the increase in our customer service staff having an impact in our add-on sales revenue?
When do you know the answers to questions like those?
One of my frustrations early in my career was when I was running a branch office, and I didn’t get the results of last month until the 20th of the following month. I could look at those reports and know if and where I needed to make a change, but it was nearly sixty days after the fact before I could do anything about it! Does that sound familiar? I know companies who are, even today, still wasting that thirty or sixty day window before they know they need to make a change.
I will leave you with three helpful tips that can resolve this situation, if it’s a situation you find yourself in.
- Spend quality time figuring out your leading indicators. If time-to-process impacts time-to-ship, then time-to-process is a leading indicator, and you can measure that. Implement a leading indicator dashboard.
- If your current systems don’t support a real-time, all-up view of your business, and the ability to create relevant dashboards to help you understand the data to support decisions, and the impacts of those decisions, consider switching to a system that does support that. You won’t believe the time and headache you save, or how much more efficiently your business can run.
- Look carefully at your culture. Do you have the ability to change or un-make a decision without “losing face” with your team? Transparency in certain decision processes, and asking for buy-in from those directly impacted, can have a big impact on the agility of your organization. Tweak, adjust, and pivot become much easier to do when the team understands the process that causes those actions.
As always, if you’d like to have an informal conversation about this, I’m happy to chat.