Some Good News About Bad Decisions
When companies fail, conventional wisdom often blames outside factors. The economy, regulatory actions, and geopolitical challenges are but three prime culprits beyond the control of decision makers.
In reality, however, it is bad decisions—factors within the control of companies themselves—that overwhelmingly cause firms to lose their leading positions. Over the past 10 years, 159 of the 500 largest companies globally by revenue have been displaced. And in many of those cases, company executives may not have realized the impact of their own decisions—or been well informed when they made them.
This observation was supported by a survey of 1,028 executives and 993 junior managers and individual contributors conducted by Cisco’s Internet Business Solutions Group (IBSG). Though many of their subordinates begged to differ, 71 percent of executives rated their performances and decision-making abilities as “good” to “excellent.” These included leaders in financial services, where 439 bank failures since 2008 continue to leave a legacy of economic malaise; and retail executives, who have seen 37 major companies file for bankruptcy protection in their industry since 2010.
The good news is that a revolution in decision making stands to change things for the better. Cisco IBSG calls it Decision-Driven Collaboration.
This new model represents a fundamental transformation in the way leaders perceive and manage collaboration in the workplace. It is supported by breakthroughs in collaboration tools, including video, mobility, social media, cloud services, and cutting-edge analytics. But it begins with recognition that everyone is a decision maker. And while the executives still make the final call, expertise from all corners of the organization is welcomed into the process.
These are the three core steps of Decision-Driven Collaboration:
- Collaborate to Engage: Identifying key contributors, soliciting input, sharing ideas. This stage is designed to frame the goals that decision makers should attain, and to identify the team members who will evaluate and execute decisions.
- Collaborate to Evaluate: Shaping the matter to be decided, considering viable alternatives. Once the objectives of a decision have been outlined and the team members with the right expertise have been identified, collaboration can focus on the matter to be decided. One crucial element is identifying alternative strategies. From there, decision makers can choose the best option.
- Collaborate to Execute: Making a clear decision, aligning the relevant parties, putting it into practice. Once alternatives have been presented, decision makers must make a decision and share it with those who will execute it, as well as with those who will be affected by it.
Decision-Driven Collaboration places a premium on how people connections are managed; how value is extracted from collaboration; and how organizations make strategic use of their human and information capital. It helps companies concentrate their collaboration efforts where they add the most value: in framing, making, and executing much better decisions. But Decision-Driven Collaboration does not imply a diffusion of authority. Rather, it is focused on increasing the intelligence of every decision taken in the business.
Once this happens, innovation and ideas flow from the bottom up, all parties have a stake in the success of the decision, and the ultimate decision makers are themselves connected and aware—before, during, and after the decision is reached.
The ultimate payoff is millions of better decisions (not just big, critical decisions, but smaller, daily ones as well) that are fact-based, highly informed, and ever more efficient and effective.
To read the complete white paper, click here.
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