Who Should Decide?

When we make decisions, we need solid facts. We believe in rational decision-making and want all the facts on the table, timely and accurately. The quality of the decisions will be better when the decision-making process is rational and the facts are in place.

Such thinking seems perfectly solid and logical but, in fact, it is severely flawed. First of all, it is well known that people don’t decide rationally. Their feelings, insights and hidden motives always affect their decisions. Second, surprisingly few people are capable of complex logical thinking. In other words, even if we could put our feelings aside our logic would still, in high probability, be flawed. Third, accurate, correct, and timely facts are seldom available for decision-making. If we wait for all the data to come it may already be too late to make the decision. Fourth, it is quite common that our “correct data” later on turns out to be incorrect or incorrectly understood. This is because interpretation of data usually depends on the decision-making context.

So? Should we just throw the data away and follow our instincts? Or should be automate the collection and analysis of data in order to avoid mistakes? Or should we seek advice from someone wiser?  I believe it all depends on the type of the decision.

"I believe it all depends on the type of the decision.

Decision-making is easiest when data is correct and accurate enough and negative impact of a possibly wrong decision is reasonably small. In such decision-making situations a computer program or a reasonably trained clerk with written instructions is at least equally competent as a seasoned manager. This is especially true when the decision-making situations are repetitive by nature.

Nowadays one can use technology to a very great extent in order to improve amount, quality, and timeliness of decision-making data. This means, that number of decisions that can be automated is actually bigger than ever before.

On the other hand, today’s workplace tends to be full of highly educated people that lack the authority to make any bigger decisions. This is because they tend to make wrong decisions if allowed to decide alone. This tendency of intelligent, well-trained people to make wrong decisions is a result of management errors. It is a management flaw that people do not understand their scope of authority. It is a management flaw that people don’t bear full responsibility for their decisions. It is a management flaw that people cannot use the data that is available to them. It is a management flaw that people don’t understand the strategic context of their decision-making. And it is definitely a management flaw to put a person in a responsible decision-making position if he or she does not possess the skills needed for good decisions.

"Nowadays decision-making is one of the least valued critical business skills.

Nowadays decision-making is one of the least valued critical business skills. It can be taught, it can be learned, and it can even be automated. Yet, the most competent decision-makers spend a wealth of their time making very operational decisions. In some companies the most significant business decisions may be practically speaking outsourced to external business consultants. Companies where people are systematically coached in decision-making are rare. Investment in decision-making is an obvious place to improve business performance significantly and sustainably.