The art of decision-making

How did your organisation go about making recent decisions? When it comes to choosing what the organisation should do, or choosing how to go about doing it, it can be hard to balance competing priorities of confidence and speed.

When these priorities are mismatched you get one of two problems: 

1. Too much speed / Too little confidence: jumping to the first solution that can be deemed satisfactory/sufficient rather than identifying what solutions may exist – aka “satisficing”1

2. Too much confidence / Too little speed – spending tons of money and time on consulting, modelling, analysis, prototyping, without actually making much progress – aka  “analysis paralysis”

The obvious response is to seek a middle ground with a balanced amount of speed and confidence. However, decision processes tend to be binary with organisations opting between “in-house” vs “outsourced” regarding who makes the decision; and between “gut feel” and “fact-based” in relation to how they make a decision. In-house teams are usually time-poor, and lack insights from outside their organisation. These factors made them biased towards satisficing. Consultants usually bring insights from outside the organisation, along with substantial levels of resourcing and analytical horse-power. These factors can result in a process that is heavy on analysis.

Digitally extended teams, that enable organisations to gather specific insights from experts that are hand-picked for each decision, offer a middle choice. These techniques are relatively new, and made possible by the proliferation of professionals with online, searchable profiles, and by business models that provide search, engagement, interviewing and insight compilation from sets of hand-picked experts. The number of organisations that adopt these models is rapidly expanding – having originally gained traction with PE, investment and strategy consulting firms, the cost and speed advantages are now being picked up by decision makers across a wide range of organisation type and size. GLG was the trailblazer in this market – now there are over 100 such firms operating around the globe.

Internal teams can quickly and cost-effectively augment their internal perspectives with insights from outside the organisation via experts assembled virtually from around the world and across adjacent industries. These insights surface new options, provide intelligence on likely outcomes, inform implementation planning and ultimately enable more confident decisions. Knowledge harnessed through interviews can be assembled quickly and cost-effectively, yet still offer a substantial improvement in confidence. Adding this third option to decision-making processes makes it easier to match the right process to the right decisions. 

Here’s a rough guide for alignment of decision-making approach to different decision type:

  • Simpler, more commonly made within the organisation, rely predominantly on the insight that can be gathered from internal sources, or relatively lower value – an internal team making more “gut feel” style decisions based on existing organisation data/analysis works best. These teams can leverage topic reports etc. and can usually be made with investments of up to 1 week and $5k
  • More complex, less frequently addressed by the organisation, rely on insight about external factors (such as competitors, markets or technologies not already well understood), or have higher value – an internal team, informed with knowledge sourced from external experts gives a useful blend of speed and confidence. Internal teams work with insight surfacing businesses to pin-point answers to the questions that determine decisions. This input involves investments of $20-80k and 2-4 weeks
  • Highly complex, one-off type decisions, that involve a complex blend in internal and external factors, and are extremely high-value – a highly specialist consulting team will enable fast progress. These teams will often harness expert insights themselves, but bring additional, on-the-ground horsepower to the analysis that needs to take place. This type of decision might involve $150k (or much more) and take 4-12 weeks.

2020 has thrown up substantial and lasting disruption – so decision-makers are under pressure. What would be the impact on your organisation if you could increase the speed AND the confidence of decision making?

Note 1: Satisficing is a term used first by Economist Herbert Simon in 1956 – we think it should be better known!

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