This is part 3 of my initial 5-part series prepping the groundwork to support the IT community to thrive into the future of work.
Business management is all about making decisions. Lots of them. How well they are made determine organizational success. Strategy development and objective settings relies on the ability to operationalize in the real world. Being explicit how we make and improve our decisions is critical to staying market relevant.
Organizations have a portfolio of decisions that need to be made. The nature of the type of scenario analysis that we undertake as part of risk management is in support of various types of different decisions that need to be made. There are different types of tooling and approaches to structuring the process to optimize the time everyone spends making decisions. Ultimately, framing the decision process well improves the odds of a successful outcome. What kind of decisions are made that need support? There are various, crossing the spectrum between strategic, operational, and tactical dimensions or perspective. Scenario analysis feeds into various types of decision-making processes. And these various types occur on both the executive level and across different departments and groups spread across strategic, tactical, and operational decisions.
For the thousands of decisions that are made every day across groups for big and small matters, it is useful to frame these various decisions to optimize the results. Successful businesses normally are disciplined about how they go about making decisions. One of the ways of improving the successful outcomes of decisions that businesses make is to create decision frameworks. These frameworks, designed and built from the inside, define decision criteria and process. This can be done for both decisions that need to be made every day and big consequential ones.
They don’t have to be complicated. The benefit is it makes clear who will make the final decision, who is involved, what the key elements are, and timelines. All decisions need information to help with the process. Sometimes that information is not readily available. When more information is needed, a useful tool to leverage is the value of information (VOI), which is the difference in economic value between the best courses of action with and without the additional information. The quality of your decisions can be improved by using the VOI. Our decision-making processes should leverage the VOI to make good use of our finite time and money in making decisions.
All decisions are made using some type of model, often unconsciously and inconsistently. We have an opportunity to be more deliberate in how our decisions are made so we can improve future business outcomes. We should intentionally model our decisions. In the next blog post I will discuss the management of risk.
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