Creating an Effective Decision Making Environment

Decisions. Information. Governance. What is the point?

The point is to establish the infrastructure and processes for an organization to learn, adapt, and ultimately make effective and timely decisions. Organizations are constantly faced with a myriad of decisions from the many tactical decisions we make every day to the few strategic, "bet-the-farm" decisions we make less frequently. Decisions are rarely made with perfect information. The real challenge is to create the right environment in order to make the best decisions possible given the circumstances and to ensure that the sum total of the decisions made moves the organization in the direction it seeks to go. Put another way, an effective decision making environment is guided by the goals and culture of the organization and leverages the right technology and processes.

Mark Kozak-Holland wrote a great series of ten articles for DM Review from November 2005 to December 2007 to illustrate this point. The series is titled "Winston Churcill's Decision-Making Environment" and provides a vivid picture of an effective decision making environment. Kozak-Holland takes us back to the early days of World War II, shortly after Churchill has been swept to power and faces a daunting task - how to protect Britain from an imminent invasion by a numerically superior German force with about half of the aircraft needed to defend the homeland.

In the articles, Kozak-Holland does a great job of capturing the key components of the British decision making machine - Bentley Prior (RAF Fighter Command), Bletchley Park (code breakers), Whitehall (fighter supply chain), and Storey's Gate (Churchill's headquarters) - and the tight communication and process interrelationships among the different components. What emerges is a picture of a highly effective decision making environment that is operating under extreme conditions. However, through the use of the leading technology and operational processes of the day, the environment performs brilliantly and allows the British to prosecute the early campaign in a way far beyond the limited resources available.

The articles provide an excellent example of how an effective decision making environment can be a significant competitive asset. While most of our organizations face less dire circumstances than Churchill faced, Kozak-Holland's articles are certainly worth the read.

I would like to hear how you feel the principles raised are evident (or not) in your organization.

E2.o NewsBytes

Several weeks ago, I made a post in our E2.o theme titled: Mass Collaboration meets the Experts.

On Wednesday, Knowledge@Wharton published a great article on the topic (brought to my attention by Experientia) titled: The Experts vs. the Amateurs: A Tug of War over the Future of Media. Though the article is more Web2.o oriented than E2.o oriented, it does a nice job of laying out the juxtaposition of expert and amateur content as complementary means to an end. It concludes:

Despite hand wringing over professional and amateur content, the reality is that consumers will use and appreciate both.

Another item that I would like to suggest reading was a press release (the actual story would be better but I don’t have access to it), about The Conference Board Review's March/April 2008 cover story, which showed online on Forbes. The title was The Future of Advice. I ran across this story when reading a post on the topic in Ross Mayfield’s weblog. Mayfield concludes his post, titled Advice is a Conversation, with the comment:

I'm not sure how we lost our way with BI and decision support tools and forgot that advice is a conversation.

These themes are exactly what TalkDIG and the DIG2008 conference in May aim to address. We are trying to spark the dialog that rightly positions INFORMATON, in all of its manifestations, as a core enabler of successful business strategy and execution.

Join the dialog. What do you think?

Importance of having accurate data to drive decisions

I recently read an article in the Boston Globe discussing the unexpected rise in costs related to the state's universal healthcare plan. The program requires that every single state resident have healthcare coverage (a soon-to-be national topic based on the outcome of the presidential elections). What the article highlights is that the anticipated costs of the program could double and that the state has not budgeted for the increase in costs. The primary driver of the increased budget is that the state underestimated the number of state residents that do not have healthcare coverage. The legislature had two numbers to use to drive the budget model, one source being the state's estimate of 460,000 and the second source being the US Census Bureau estimate of 748,000. Unfortunately for the state, they used a number somewhere in between and they are now realizing that their budget will be short.

Beyond the political nature of the article, what I find interesting about this situation is you can clearly see the importance of having accurate data when making a decision. More appropriately said, the state had already made a decision to provide universal healthcare for every state resident, but because of the poor quality of data, how they allocated resources (i.e. money) is being significantly impacted.