Making Tough Decisions

There’s increasing agreement that business intelligence and performance management technology has to go further than “just” data, analysis, and planning, to helping with the intrinsically human process of making decisions. Today, most corporate decision-making happens in meetings and conference calls, with little support from technology. As a process, it functions, but most of us would be hard-pressed to call it optimized. How can we integrate BI technology with decision-making best practice?

Today, most corporate decision-making happens in meetings and conference calls, with little support from technology. As a process, it functions, but most of us would be hard-pressed to call it optimized.

in many ways, corporate decision-making resembles the manual, time-consuming operational processes that have been replaced by automated, connected business applications. Isn’t it time that we applied some of the lessons we’ve learned while implementing ERP to the executive boardroom?

The payoff is huge: organizations make thousands of decisions every day. A little better data, and a little better analysis behind every decision can make a big difference.

Just as most technology discussions don’t talk about the decision-making process, most discussions about decision-making don’t mention technology. Here’s a case in point: SAP’s Don Bulmer recently posted on the subject of Leadership: Making the Tough Decisions. It was a great article, but we could also talk about the technology behind the principles he laid out.

So here’s Don’s three basic steps to making tough decisions, followed by my comments on how technology could – and should – help more in the future.

Understand what is the core issue, and separate facts from opinions

First, it is important to understand the ‘core issue’ associated with the business challenge that you are dealing with and gather as many facts and insights surrounding the issue as possible. At this stage in the process, it is important to separate ‘facts’ from‘opinions.’

As a leader, you are often presented with ‘facts’ that are presented to support a specific argument or point of view – which by default make them adverse. This is not to say that these adverse or ‘position-based’ facts are not valid, but they seldom represent a fully informed view of the core issue that needs to be addressed.

Any decision you make is only as good as the information you base it on. Accurate, transparent decision-making requires a strategic approach to information across the organization. If everybody comes to the meeting with their own spreadsheets and numbers defending their point of view, you’ll end up spending more time arguing about the data than about the decision itself. A “single view of the truth” across the organization, with consistent, reliable information, makes it much easier to separate fact from opinion.

Look at the decision from all angles and perspectives

Second, it is important to look at your decision options from all angles and perspectives. Many tough business decisions will have a broad effect on your business which might include: brand; reputation; relationships with employees, customers, partners, governments, etc. It is very common to overlook the total impact that a tough decision will have on your business. This is why it is important to consider many options – as you weigh the impact and trade-offs that most important decisions will require.

As a leader, this is where intuition and experience play a big role.

No computer can help you figure out all the angles of a decision, but technology can help. For example, profitability and costing analysis can help ensure that everybody involved in a decision understands the real drivers of the business: what is value-added activity, and what is not? What should you be spending time on, and what is less important? And predictive analysis can help determine what factors have historically had the most influence on the numbers at hand, and determine what might happen in the future.

Ask lots of questions of lots of people

Third, it is important to ask a lot of questions. This will help you to understand the options on the table as you make sense of the facts and sift through potential agendas/motives of people involved. Asking the right questions also helps you to measure the risk and impact that your decision will have on your business and with key relationships.

You may even consider speaking with trusted representatives from affected internal or external groups (customers, employees, partners,etc.) to get their perspective. This interaction will also help secure support and buy-in (by all parties) of your final decision once you are ready to communicate.

The ‘tougher’ the decision the more challenges you can expect to face as you communicate and implement. You will need to be prepared to help affected parties understand the rationale behind the decision and even share some of the alternatives considered and why you chose a different path.

This is the key area that technology is poised to help more with in the future. Today, there’s relatively little support within Business Intelligence industry for the process of gathering and sifting information from different people involved in decisions. Interesting technology exists today, but is not yet integrated into a whole solution. For example:

Antivia has done some very interesting work in the area of “BI 2.0” and letting people collaborate around reports and information within a BI platform
Panonica had some interesting collaboration software, with tight links to BI, back in the early 2000s, but was clearly too ahead of its time, and has since been discontinued
ExpertChoice and others have supported collaborative decision-making, but without the BI angle.

The next generation of Business Intelligence will combine the best of these different technology approaches to better support decision-making, not just information-gathering. For more information about how technology can help with decision-making, see The 5 Ingredients of Good Decision-Making, based on some research done by the Economist Intelligence Unit.