Everyday we as individuals, and the companies we work in have to make decisions. It is a fundamental part of our existence. But are we really good at it? As I look back at my life, I’ve made some very good decisions and some bad ones. I suspect we all have. And the same applies to our business.
Personality is a part of this. I am an intuitive thinker. I go with my gut. And I’ve learned that my intuition has ‘gotten better’ as I have experienced more things . And, experts say “informed intuition” is a great asset–we even talked about it in the keynote for Gartner Symposium (login required) this year. But big decisions are rarely made on intuition alone.
Others are more data-driven. Their personalities “force” them to have a lot of data before they make decisions. And that is fine too. You need both.
Side note: My favorite leadership lesson from Colin Powell is:
Part I: “Use the formula P=40 to 70, in which P stands for the probability of success and thenumbers indicate the percentage of information acquired.”
Part II: “Once the information is in the 40 to 70 range, go with your gut.”
In business, where you are always dealing with a mix of personalities, decision making gets even more complicated. But do we ever really think about how we make decisions? Could we be taking decision making for granted, relying on our experience and credibility too heavily?
Sure, today we have access to more data and more analytical power to be more informed and more educated. There are decision support tools and dashboards and smart machines. But with all of this, do we really think about our decision making process.
I know I don’t. Or didn’t until recently.
That changed when I reconnected with an old colleague, Erik Larson. Erik has started a new company called Cloverpop that provides tools to guide better decision making. I find the company interesting, but the research they have uncovered and continue to do is what really got me thinking. Some of that research shows that there is a lot of inconsistency in approaches to decision making. We discuss. We argue. But do we really think about the process that was used to make the decision?
In particular, do we recognize the impact of bias — could our habits and preferences leave us open to mistakes or missed opportunities? You get a team together–each with their own biases and all of the sudden the discussion shifts. Sometimes it becomes all about compromise; compromise just to make a decision that many may feel is not the best one (or where much uncertainty remains in the group). And research on decisions show that bad decisions have a big impact–slowing growth, lowering profitability, and reducing the confidence of stakeholders. This is a big focus of behavioral economics research (and another good piece from HBR is here).
It turns out that there are some best practices that can be followed (but seldom are) to improve decision making in organizations. They are along the lines of:
- Managing the size of the team (I never knew (but it does make intuitive sense) that the ideal decision team size is ranges from 4 to 6 people)
- Exploring Multiple Alternatives
- Reviewing Other Perspectives
- Confirming buy-in from those that have to execute
- Communicating the decision
These practices make logical sense. How often have you seen what you thought was a great decision fail because you did not have buy-in or others involved did not understand it (or how to implement it)? How often have you made what you thought was a good decision and then, just a few weeks later, identified an alternative that might have been better? Has the decision making approach of others resulted in conflicts in teams that slow the process and a decision that seems obvious to you is never made, dragging on and on with no path to resolution?
Could a more formal process help uncover biases that are leaving us blind (or overly dismissive) of other options? In reality, it seems that many of us take decision making for granted, relying on our experience and credibility to be our guide. Sure, we go looking for data and get others involved, and maybe have some expectations about materials that will be produced and shared to support the decision. But, even in those cases, that “bias thing” could be impacting us without us knowing it.
Could defining a more standardized decision making approach, focused on around some practices that have been proven to make decisions more successful, help everyone involved in decision making break down those biases–in a productive way? Could some “structure” accelerate the time it takes to make these good decisions? For the experts that have studied this, the answer seems to be definitely yes.
This might be able to help both technology buying teams and technology providers. For technology buyers, this could be about making their team buying processes faster and less painful—and increasing the probability of project success. For technology providers, this could help make better choices in product development and in the development of your pipeline–prioritizing the opportunities you’ll pursue and those you’ll abandon. And, this could even bring buyers and providers together to help each other make decisions that are in the best interest of all.
Next time you have a big decision for your business, don’t just focus on getting the data—look at your decision making process. Apply some (or all) of these best practices and see what happens.
View Free, Relevant Gartner Research
Gartner's research helps you cut through the complexity and deliver the knowledge you need to make the right decisions quickly, and with confidence.Read Free Gartner Research
Comments or opinions expressed on this blog are those of the individual contributors only, and do not necessarily represent the views of Gartner, Inc. or its management. Readers may copy and redistribute blog postings on other blogs, or otherwise for private, non-commercial or journalistic purposes, with attribution to Gartner. This content may not be used for any other purposes in any other formats or media. The content on this blog is provided on an "as-is" basis. Gartner shall not be liable for any damages whatsoever arising out of the content or use of this blog.