Judgment Calls. Thomas H. Davenport

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СКАЧАТЬ Burrill thinks they might have hit on a winner with the revised version of the house, so he's now building another home with the same plan. The Expanded Oxford has become a model of its own now—one of about twelve that WGB buyers can choose from. Like all designs and modifications, it has been captured in the company's computer-aided design (CAD) repository.

      Unlike other suburban builders who construct the same designs over and over again, Burrill is always tinkering with and improving the house designs he builds. He initially hires an independent designer to create a CAD-based design, but thereafter the plan will constantly be revised based on feedback. Even when a house design sells well, Burrill and other WGB employees will talk to customers who live in the house, subcontractors, and anyone who sees the designs about what they think.

      As with the Expanded Oxford, WGB will often make improvements to the designs and incorporate them into the CAD system. They are even willing to make changes for individual customers, although they think of themselves as production builders more than custom. “People are particular and want changes at this price level,” Burrill notes. All changes are stored as CAD files, so they can be reused easily.

      For example, one customer liked the overall design of a house, but didn't want a formal living room or dining room. So WGB accommodated the buyer, designing and building a big country kitchen and a bigger family room. Now that plan is available in the system for any other customers who want it. Further, the request and others like it have prompted the WGB team to deemphasize formal living rooms in general. In many of the available designs, what was formerly the living room has been downsized into a room that could be a library, study, or home office.

      Another Group Judgment Call

      Burrill doesn't only use the group consultation approach on design decisions. He tries to employ it on any topic on which others might have good insights. For example, a recent consultative decision involved setting a price for the resale of a condominium that WGB had built in the 1980s. Both Burrill's mother and his daughter Vanessa had lived in it at various times, and now it was on the market. An offer from a potential buyer had come in, but it was substantially below the asking price. Should Burrill accept, reject, or counter the offer?

      Burrill had his own feelings about the offer, but he knew that others in the business were knowledgeable about the condo. Vanessa had both lived there and met the potential buyer. Joe, who handled sales at one point for WGB, had sold many of the condos when they were built. So Burrill convened a meeting with his daughters and Joe.

      Burrill's consultation with his informal advisory panel revealed some differences of opinion. Vanessa and Erica wanted to keep the price high and reject the offer. Joe was inclined to sell it at the offering price. Greg Burrill was inclined to compromise a bit. “Maybe when we tell them about the improvements we've put in the unit, they'd be inclined to go a bit higher. We've put in new windows, new granite countertops, and new appliances. Let's invite them over to the unit and try to get them to raise their offer a bit.”

      Burrill had listened to the opinions of his colleague and daughters, but knew the final decision was his own. “Vanessa lived there and really loved it, so she may be a little sentimental about it. She and Erica, being in marketing and sales, want to make sure that the prices stay up at the complex. I understand that. But I don't want to have it stay on the market for six months.”

      There was certainly no rancor in the decision process. After Greg Burrill announced his intention to negotiate with the potential buyers in an e-mail to the consulted parties, the conciliatory response was rapid. Vanessa Burrill called her father a few minutes later, saying, “Dad, here's some text you might want to use in the e-mail to the buyers.”

      Reflections on WGB Homes's Organizational Judgment

      As WGB Homes's story illustrates, even small, family-run businesses can benefit from activities to improve organizational judgment. In fact, when one bad decision can sink a company, good decisions are particularly critical.

      The hallmark of decision making at WGB Homes is involvement by multiple knowledgeable parties. Greg Burrill, the CEO, has confidence in his own judgment, but he knows that better judgment derives from broader participation. It often makes sense to consult other expert sources in making a decision, and to build in processes and contexts for soliciting and discussing decision alternatives. Greg Burrill still makes the final decision, but he looks for insights and expertise in every place he can find it. A senior executive in an organization can and should listen to many opinions and sources of wisdom, but he or she still needs to make the call in the end.

      The WGB story also illustrates a key aspect of decision process design: to delay decision making until more information is available, or to lower the cost of changing your mind if you decide your initial decision was suboptimal. This is, in effect, a way to minimize the cost of poor organizational judgment. It happened only rarely at WGB Homes, but the uncompleted home made it relatively easy to address.

      WGB captures its design decisions in its CAD system. When a new or modified design is created, it's captured in digital form so that it can be used again—or serve as the basis for yet another modification. It's a form of knowledge management for house designs—and since WGB is a small firm, virtually any organization with design processes ought to be able to do something similar.

      So Burrill's consultation with his informal advisory panel is a great example of building organizational judgment, and his late-configuration approach is a great way to lower the cost of decision making. The company's CAD system is a way to capture good design decisions so they can be reused with little effort. Think of all of the decisions in your company that might be improved if everyone with a good idea were consulted, if plans stayed flexible until the last minute, and if the firm's knowledge had been captured and stored for later reuse. It's a management approach that works for companies and organizations of any size.

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