Assessing Your Decision Process

How does your organization stack up against the performance of organizations assessed in this study? You may feel that you are performing much better than its reported average of 50% success, but how much better?

A 50% success rate is far from stellar, so that even if you are getting 60% or 70% successes, you may still be wasting a lot of money, time and effort on the still-substantial portion that do not succeed.

The first step in any effort to strengthen your management decision process should be to assess the effectiveness of your current process and identify those aspects most in need of strengthening. An assessment should give you three vital pieces of information:

The study describes a relatively rigorous and careful assessment approach used by Professor Nutt, which was required to satisfy the standards for academic review and publication. For business purposes, however, a somewhat simpler version should be adequate.

In the absence of hard data on success rates, you might simply assume that your decision process is about average — delivering successful decisions only about half the time — and proceed to develop and implement a range of measures to strengthen your process. The study offers many suggestions on ways to go about this. Doing so, however, is likely to miss the mark if you have no clear picture of the sources of weaknesses in your management decision process. You can also end up addressing process aspects that are not flawed, perhaps even damaging one or more by your "corrective" efforts.

In addition, it is very hard to evaluate progress if you do not have a baseline, or starting point, as a reference point. You can work very hard to strengthen your decision process but have not real way to determine its value.

Data for assessing the quality of a management decision process must come from recollections of those involved in past decisions, supplemented by a few summary documents related to these decisions. Compensating for faulty and fading memories of situation details is an important part of the assessment process. Memories often change over time to emphasize positive aspects and minimize problems. Biases enter into recollections. Some will offer input from a limited or too-distant viewpoint. Others will recall mainly second-hand information. Integrating and balancing such information can be a challenge.

The assessment process itself consists of interviews, document review, and process observation.

An essential precursor step, however, is a meeting of the management group involved to identify the set of decisions that will be examined in some detail. Groups and individuals who were most important in each decision and its outcomes should also be identified so that they can be contacted as needed for their input. This meeting is critical because it sets the stage for all that follows.

Interviews with a range of people identified above can then proceed. Some interviews are best done face-to-face, while others can be done effectively by phone. It may be possible in some cases to utilize questionnaires to broaden the input base. A certain number of these contacts will produce documents that elaborate on aspects of the decision and its outcome. These should be reviewed to extract information that can corroborate or extend information gathered from interviews.

Process observation should in principle be valuable for confirming tentative findings from the preceding steps. It would also be expected to generate some additional process information that was not previously noted. In practice, however, process observation at management levels rarely does either. More on this in a moment.

Few managers have any problem talking about decisions that worked out well. Unfortunately, these do not always yield much information about process deficiencies. Their main value is providing a backdrop against which aspects of decisions that were not successful may be assessed.

Getting information about decisions that had unsatisfactory outcomes is typically difficult. It opens old, often painful, issues and re-surfaces conflicts. Some organizational cultures are so failure-intolerant that those involved in weak decisions may well be gone or unavailable for assessment purposes. Recollections are often biased toward justification and blame-shifting. It can get messy.

WARNING: This is the point where you must decide whether your organization, people and culture can handle such an open, introspective assessment process. If not, then stop here. For you, what follows will likely be painful and a waste of time and effort. But, if you are willing to talk openly about what did not work and why, you can gain access to the potentially huge benefits available from this learning.

For those courageous enough to take the next step, it involves deciding which of the weaker decisions made in recent past may be suitable candidates for assessment. Requirements include:

Collecting information about decisions is usually done using some face-to-face interviews, a greater number of phone interviews and follow-ups, and where suitable, one or two questionnaires. The goal here is to develop a set of decision maps—a concise picture of each decision process and outcome. Among the information that should be gathered is:

Part of the process of summarizing this information is having involved parties confirm the summary points and interpretation, or provide clarity on conflicting viewpoints. Decision maps are helpful here since they make such review and confirmation much easier.

Not every decision being assessed will require great detail on all of the aspects listed. Some will revolve around a particular step, such as understanding the situation fully before deciding. In this case, the implementation may well have proceeded with great skill, succeeding fully in its action objectives, but the overall effort did not succeed because the actions taken were myopic from the outset.

Care should be taken to identify external factors involved in cases where the decision ultimately failed. Many decision failures are blamed on unforeseen factors and, for some of these, the blame is justified. More often, however, unforeseen factors were not seen only because of deficient initial study or, perhaps, a lack of creative input in developing action options. Because most important decisions will face a number of significant factors that could not be anticipated without clairvoyance, all need to have a enough flexibility built-in to be able to adapt to a fairly wide range of changed circumstances.

The decision maps should be organized so as to highlight the likely areas of decision process weakness in each one. Were a sufficient number of action options developed, or was an initial response pursued single-mindedly? Were important stakeholders ignored? Were affected parties consulted? Was the action plan limited in its ability to adapt to changes?

Observing a number of management groups involved in decision-making is helpful if those involved are not self-consciously attempting to do things differently because an observer is present. The more participants know about the decision process and its assessment, the less likely that they will behave in an observed meeting as they would in the absence of an observer.

For this reason, process observations should be done at the very start of the assessment process. Presence of the observer should be explained as helping provide essential background on important issues facing the organization for a study that will be explained to them shortly. Several meetings should be observed, each if possible at a different stage in its deliberations. One might be addressing a new issue. Another might be deciding on a course of action based on earlier investigations and discussion. A third might be attempting to change course as the result of an unforeseen obstacle. And, one should be a review of a recently concluded effort to assess results and extract any useful lessons.

If the assessment process outlined above sounds like a lot of work, and rather costly if you rely upon external resources to conduct it, then you may wonder how to tell whether it will be worth the cost and effort. Here are some tests:

þ Your organization's management decision success rate is unacceptably low, using the study's success criteria, but you cannot see any obvious causes.

þ Your organization has experienced some major, costly decision failures in recent past but you do not believe that the majority of these were due primarily to deficiencies of the managers involved.

þ You want to assess your management decision process to provide both a focus for making process improvements in future and a baseline for assessing the results of such efforts.

þ You are committed to making system-wide changes to address any management decision process weaknesses that may be found. Otherwise, an assessment will generally be a waste of time.

þ The CEO or COO is leading the charge here, or at least is fully committed to it.

Assessing your decision process will probably be a lot easier than strengthening it. Managers and executives are frequently the most resistant to any change that affects them and their behavior. One of the perquisites of management is being able to do things more-or-less your own way.

In the absence of strong, top-level commitment, you may find that it is better to let individual managers and executives address decision-making in their own units or for themselves, as they may be inclined. They may or may not need to do an assessment, depending upon their motivation for addressing their own decision processes.

There is at least one alternative to an assessment-based approach to strengthening management decision processes. Over many years of working with these typically smart, strong-minded, action-oriented individuals, I have found that a learn-by-doing, or dynamic, approach can be most effective. This involves integrating many of the assessment concepts just discussed within current decision processes and providing for systematic review and feedback to identify process weaknesses and devise corrective measures.

In effect, the assessment step becomes part of the strengthening process instead of a precursor step.

How many of these might be present in your organization's management decision process? An assessment such as the one that we will now outline is the only way to find out. More... è

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