How to Optimize the Organizational Decision Making Process under Conditions of Uncertainty

Dotan Sagi

In a perfect world, organizational decision making would be easy – having complete and accurate data would lead to the optimal choice between all potential alternatives.

In reality, however, the decision making process includes more than calculating probabilities, predicting what would 'happen if', and choosing between possible alternatives.

The decision making process itself contains three components (that people are not always aware of) that have a significant impact on our ability to progress towards strategic goals:

(1) the complexity of the organizational processes;

(2) the dynamics between the people involved;

(3) the ability to adapt when changes are required.

Decision making does not occur in isolation from the internal and external organizational environments; it is a continuous process that needs to be executed by mid-level managers and other personnel to impact the organization's strategic goal.

This complexity creates the need to expand the levels of decision making to more practical avenues and – most importantly - to include an understanding of how people make decisions. Business professionals must consider routine behaviors and connect desired outcomes to the people's interaction within the organization.

It is, therefore, crucial to consider how personnel will react to the decisions made, how their actions and interactions will contribute to (or detract from) goal achievement, and how they'll manage to adjust the process when facing shifting conditions and unexpected events.

Organizations' generally inefficient use of time and money, coupled with a broad tendency to fall short in achieving the desired Key Performance Indicators(KPIs), necessitates a shift from the current, familiar decision making path. Such non-optimal outcomes reflect a non-optimal flow of internal interactions amongst and between managers and workers, who often make their own daily decisions in parallel. This highlights the fundamental and critical uncertainty top management faces when making decisions.

For example - how can we know that a given decision can be implemented without interrupting or disrupting the existing workflow processes?

How can we see the big picture and make interrelated decisions to other ongoing processes without burdening specific departments or teams, aggravating complex processes, or complicating the achievement of strategic goals?

Identifying Existing Process Chokepoints

Just as an Olympic athlete's muscles and movements are measured after each competition to calculate improvement and endurance, so should an organization measure, collect, and analyze data to gain an accurate sense of what is happening at any given time and why.

Because processes are implemented by people - measuring their behavior, their interactions with others, and what they do as well as what they do not do - will lead to understanding how 'smooth' or 'natural' processes flow in the organization. Moreover, when the need arises to make changes to ongoing processes, such measurements enable an understanding of who, when, and how to handle the alterations optimally.

The idea is to identify potential chokepoints – areas in the process that are not implemented optimally. This capability is incredibly impactful when moving from strategic planning to tactical and operational planning.

Understanding Why Chokepoints Exist

Organizational processes are inherently based on dependency and adaptation - two concepts that mutually impact and complement each other. Given the intrinsic dependence between parts or stages in any process, any shift from the original plan needs an adaptive response from other units.

The complexity in the daily organizational operations (based on a network of processes carried out by many people from different departments or/and teams), is prone to chokepoints, primarily when carrying out an unplanned action.

Such chokepoints could arise if someone were late to act or to make a decision, if someone made a call that was not their responsibility, or if someone communicated ineffectively. These actions are not planned and are not part of the everyday decision making process, yet their impact on the rest of the process and the organization's strategic goal can be critical.

Taking Confident Actions / Optimizing Business Processes

To minimize delays, mistakes, wasted resources, burnout, and turnover, an organization must first be aware of the human behavior that underlies the organization's routine processes. Measuring personnel's actual behavioral responses to daily operations, including their interactions with each other, the stress levels managers and workers experience, and their levels of involvement in the planned activities, will serve to minimize such suboptimal outcomes.

This data highlights the gaps between theoretical planning and practical performance, while detailing the organization’s level of risk of failing to attain strategic goals. For example– consider the reasoning behind why two managers don’t interact with each other- how does this affect the progress of the more essential processes?

Also consider the impending retirement of a senior manager - anticipating the retirement of such a job function must be considered preemptively, as their successor would likely lack their predecessor’s informal connections and work relations. The newcomers' ability to quickly adapt to evolving problems would typically require time and experience to align with the ability of the retiring manager. Retaining professional knowledge within the organization is essential to the organizational process of decision making.

Analyze, Understand, Implement, Repeat

Planning for and making strategic decisions should follow the organization's routines, work standards, capabilities, and daily workflows.

KPIs that are disconnected from actual live performance and internal/external organizational interaction are much more likely to fail than KPIs that are based on human behavior and interactions.

Overcoming such complexity requires a keen awareness of the daily operations and interactions between workers and managers. Knowing who influences whom, understanding the general sentiment in the interactions, and identifying who regularly complies (and doesn't comply)with deadlines will lead to better planning, better goal attainment, and better decision making processes – adapted to your organization.

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