Judgment Calls. Thomas H. Davenport

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СКАЧАТЬ without significant mention of the latter's role.

      All of these changes come at a time when external conditions in the world have made getting decisions right more important than ever. Businesses face ever-higher levels of competition, and in a climate of increasing economic uncertainty and volatility, markets and customers move faster than ever before. Further, the same technologies that make it easier to tap collective wisdom within organizations also create more transparency into them; the punishment for getting big decisions wrong is swift and stern.

      Of course, many things haven't changed in the world of organizational judgment. As we hope our stories will demonstrate, good judgment and consistently good decision making require such eternal verities as good leadership, strong culture and values, accountability, and good decision processes. These are widely emphasized in the decision-making literature, but rarely in combination with the four new factors that have transformed the judgment environment.

      How Organizations Are Responding

      In response to these changes, some organizations are taking the usual “head in the sand” approach. On the issue of more participation, insecure senior executives are simply reminding themselves that they are the boss, and insisting that only their judgment and decisions count. On social technologies, instead of figuring out how they can facilitate collaboration and group judgment, many firms still ban their use altogether. One survey of chief information officers found that 54 percent ban all social media use at work (though it's likely that many of their employees find a way to access Facebook anyway).¹⁹ With data and analytics, many senior executives continue to trust their gut; another survey suggested that 40 percent of decisions are still based on it—and we think that's probably lower than the true number.²⁰

      But many executives have looked around, have seen that the world is changing, and are moving with, or even ahead of, the patterns of change. The organizations we describe in this book have embraced new approaches to judgment building and have already applied it to important decisions. They're consulting more people and drawing from their expertise, adopting some form of collective leadership, applying data and analysis to decisions, and supporting it all with new technology. They are focusing on either big, strategic decisions or the daily tactical decisions that are critical to successful execution of strategy. Leaders are still exercising their responsibilities, but they are doing so in more participative and humble ways. There is no gimmickry here—the organizations we describe are all simply doing their homework in various ways, and they are getting better decision results.

      Why Look at Good Decisions?

      This book has twelve stories of how particular decisions were made and improved through activities designed to build organizational judgment. Decisions are an important lens for these judgment-building activities because they are the objective of them. If you think about it, a vast amount of organizational activity these days is ultimately intended to improve decision making. Many IT projects, for example, have this as at least an implicit goal. If you're putting in an expensive new enterprise system, building a data warehouse, constructing a knowledge management system, or installing business intelligence software, your ultimate purpose is to support better decisions within your organization. Outside of the realm of IT, perhaps your organization is trying to improve decisions via decision role clarification, reengineering a decision-oriented business process, or addressing a particular decision, such as those in a business strategy. If you have undertaken such activities and those better decisions are not actually happening, something is wrong. Perhaps you need to establish a closer connection between those activities and the actual decisions that need to be improved.

      But despite occasional problems, decisions can be improved and made well with good organizational judgment. We chose to tell stories of good decisions because we think the world needs some good examples to emulate. It's all too easy to focus on bad decisions (as we have done at the beginning of this chapter), and there is certainly no shortage of them. But we thought that readers might be tired of reading (and hearing and watching) about the bad decisions made by banks in the financial crisis, the poor judgments made by BP and its business partners that led to the oil spill in the Gulf, or the bad calls at NASA that led to the Challenger and Columbia shuttle disasters. Yes, bad decisions happen, and sometimes they can be very instructive. And we all like to read about human frailty and the troubles that ensue from it. But the world doesn't seem to be getting better at decisions, even after these poor examples have been studied in great depth. So we decided to “accentuate the positive.” The organizations we describe in this book are surely not perfect, but they seem to be making headway in the journey to better decisions.

      Instead of providing you with a checklist, we are recounting stories—perhaps not the most rigorous form of evidence, but often the most memorable type. We subscribe to the power of narrative for learning and modeling. We also believe that stories incorporate necessary context and human fabric. And does the world really need another management framework?

      That said, there is an implicit framework that emerges from these stories, or at least some common themes that we think define the new paradigm for organizational judgment. They are:

       Decision making as a participative problem-solving process. Organizational judgment at its core depends on a disciplined (if not always highly structured) process. In its various steps, the process will include, at the outset, framing the problem to be solved; pursuing the problem through iterative steps that progressively refine the questions that must be answered; engaging diversity of opinion; using fact-based analysis to weigh benefits and risks, and generate and test hypotheses; and pursuing all appropriate options based on continuous deliberation and learning until the best answer emerges. Equally important as the process per se is the need for it to be (albeit in varying degrees in different situations) participative. When organizations with good judgment make important decisions, they routinely engage a broader group than just a few top executives, if not “the crowd”; they seek multiple points of view, including contrarian ones; they work especially to include people with the best knowledge and experience, regardless of status or hierarchy; they embrace the perspective of the “front line” or key stakeholders (including partners, suppliers, and customers) who must implement and live with the decisions made.

       The opportunities of new technology and analytics. As more companies recognize the power and value of technology-enabled analysis and analytics for defining their strategy, marketing, or making other key decisions, a new standard is emerging about the integration of data analysis into the “front office” of every business. No longer the rarified provenance of “the geeks downstairs,” technology is becoming integral to decision making, and the overall judgment exercised by the organization, whatever the industry or sector.

       The power of culture. Organizations that practice great judgment inevitably have many of the key attributes and values mentioned embedded in their operating culture (respect for the problem-solving process; inclusiveness; leaders as facilitators of decisions, not “monarchs,” etc.). Some organizations come by the new kind of values and behaviors more naturally than others; in some cases, as the need for better decision making and new patterns begins to emerge, cultural change evolves hand in hand with more “democratic” and analytical approaches.

       Leaders doing the right thing and establishing the right context. The role of the leader in creating organizational judgment is often first about reframing decisions as indeed not their own exclusively. But great leaders also work to ensure that the processes and mind-sets of more distributed, problem-solving approaches key to judgment are in place and part of the norms of doing business in their enterprise. In many cases they can be seen instituting cultural change to migrate their organizations toward overall better judgment.

      We see these themes at work in different ways in different dimensions in the stories we have collected, and each chapter will СКАЧАТЬ