Socializing your decision making process

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A good example of process socialization is about decision making. A few weeks ago I read this interesting paper from Olivier Sibony (Associate Director at McKinsey). Since the article is in French I hope Google Translator will provide you with a good english translation.

What is it about ?

Making the right decisions is key to be a successful business. Nothing new here. But Olivier Sibony provides us with interesting numbers.

. Between those who have used the analysis tools the most advanced and recognize those who were far away, the performance gap is important: 2.7 points in return on investment between them. But those who have followed a process of rigorous and objective decision showed a much higher performance: the gain is 7.3 points ROI ! In other words, there are three times more to gain by using a method of decision-making!

The impact of a good decision is obvious and its ROI clear enough to justify enteprises invest in what makes it possible. It would seem obvious that the solution is to be brought by analysis tools and the definition of relevant indicators. Nothings social here. At first sight…

Socialize ? But how ?

It appears that better decision are made if more people are involved. Beyond analysis tools, companies that get the best results :

[They] organize a real debate with participants chosen on criteria of competence (specific project), not just rank. Finally, they encourage this debate in the expression and discussion of various viewpoints, including contradictory with that of the leader.

In fact, gathering a lot of views allows to see new aspects of a problem, through different expertises. So it makes decision makers take into account issues they hadn’t thought about (decision makers make and assume decisions, but they can’t be experts in every concerned fields). Objective confrontation helps decision makers to get more contextualized informations to embrace all the paramaters and impacts. And to avoid all the traps mentioned in the article.

Don’t believe in the “magic stick myth” : business is not a teddy bear world

Be careful, decision making socialization has not to be mistaken for things like democracy or vox populi. This is note about voting, even if voting can be conceivable for certain decisions on a certain scope. But we’re talking about strategic decision that will engage the future of the company and will have to be assumed by one person. So, decision makers are helped by a collective processus but, at the end, they make decisions on their own because they will be the only people responsible for it. They may explain how they have taken the different viewpoints into account but they don’t have to. This is a good example of the articulation between networks and hierachy : the one is a way to work, to get things donce, the other is a responsability chain. They don’t preclude one another but complement one another.

It’s exactly the same for the human scope : people involved in this process are chosen according to their expertise and the processus has not to be publicized outside of this circle.

Of course, for less critical decisions, with a local impact, the process can be more public and involve a wider group of people.

Tools ?

Did we say anything about tools ? This was not a paper about enterprise 2.0 but about decision making and its impact on financial performance. But, once this logic adopted and implemented, wondering how to make it easier with the right tools makes sense.  Businesses would need to make it more flexible in order to apply it to a wider ranger of decisions and people all across the company. This implies tools to identify and engage people, to foster conversations into unformal groups (ie : that are not built regarding to the organization chart). Believe me : if things are done in this order, I think tools’ adoption won’t be an issue.

A precedent : CISCO

Does it remind you of something ? The Cisco case I’ve already mentioned here. The community (councils) system implemented by Chambers helps reducing the time needed to make a decision, to make more strategic decisions, to make better decisions, involving the more relevant people on a given field. This is a highly socialized process, which does not mean the final decision is collective.

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