September 12, 2016

4 Steps to Making Great Business Decisions

Post by: Bita Massoudi

Context

A strategic business decision is a crucial direction-setting decision. It’s a decision that bears high risk, it involves a certain level of uncertainty, and it’s costly to undo once the decision is made. The effects of the decision to differentiate the company from its competitors will not be known for some time and it’s ability to succeed depends on the organization’s ability to implement the decision outcome effectively.

Sadly, research has shown that most strategic decisions fail to deliver the expected tangible outcomes. At the end, the team fails to create a clear decision and decision making efforts fail without clear-cut deliverables. Everyone is left frustrated and demoralized.

Typical efforts behind strategic decisions fail because decision makers take shortcuts or don’t follow best practices. Project teams tend to spend too much effort on gathering historical data. They focus on developing a winning scenario and a single implementation plan instead of considering several different alternatives. Without clear upfront dialogue with the right stakeholders, teams end up churning on recommendations.

Good decisions are built on shared understanding of the business. Good strategic decisions produce several different alternatives to arrive at the best decision outcome. Alternatives are evaluated under a range of future scenarios. The right people are involved in the decision making at the right time. As a result, they produce good decision outcomes that are durable and stand the test of time because there is buy-in from the organization for implementation. Good strategic business decisions must recognize business uncertainties and ambiguities.

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