Decision-making and Chinese astrology

What are the factors that influence decision-making in organisations?

Well, hopefully not…

Blog 20 media Dilbert

I have described previously an action research project that I conducted within a large organisation. The project was conducted in two phases and the objective of the first phase was to develop a deep understanding of how decisions are made within the organisation, particularly to identify the factors that support or inhibit good decision-making.

The participants in the project, a group of 29 volunteers within the middle management level, all based at the organisation’s global headquarters, captured information about organisational decisions over a period of one month, logging a total of nearly 300 decisions. For each decision, information was captured on the following aspects of the decision:

  • Importance
  • Complexity
  • Who was involved
  • Who was the decision-maker
  • What were the circumstances of the decision and the factors that influenced it
  • What was the decision-making process used
  • Quality of the decision-making process
  • Whether or not a decision was made
  • Quality of the decision made
  • Time taken to make the decision

By analysing the resulting mass of information about the organisation’s decisions, it was possible to identify where correlations existed between pairs of any of the factors listed above.

Now, since we are talking about correlations, they do not provide any indication of causation. However, for some of the correlated pairs of factors it seems reasonable to hypothesise causal relationships, or, at least, opportunities to influence the outcomes of decision-making processes, such as whether or not a decision is made, or the quality of the decision, by influencing some of the circumstances under which the decisions are made.

The following diagram represents the main relationships that were identified, with correlations represented by:

  • Orange box: the factors within this box were all positively correlated with each other.
  • Arrows: these shows correlations between pairs of variables in different boxes. The associated positive and negative signs indicate a positive or negative correlation.

The assumed causal relationships are indicated by the direction of the arrows.

Blog 20 media factors model generalised

What opportunities do these findings suggest for making better decisions within organisations?

Some of the opportunities implied by these findings won’t seem like rocket science to anyone. For example, the research suggests that better decisions will be obtained by:

  • Ensuring that a reasonable amount of rational consideration is given to a decision.
  • Identifying situations involving strong emotions or complex or obstructive organisational politics and taking steps to reduce any negative impact from these on the decision-making process.
  • Ensuring that participants in the decision-making are clear regarding who will be the decision-maker(s) and what will be the decision-making process followed.

However, some of the other findings may be less obvious to many people, for example:

  • Decisions that have been discussed previously and are being revisited are associated with less good decision-making processes, have a lower likelihood of a decision being reached, and result in decisions that are perceived to be poorer on average. We might ask which came first: the need to revisit the decision or the poor decision-making process? Either way, seeing lots of decisions being revisited should be a big warning sign for organisations.
  • Explicit reference to the organisation’s values was found to improve the perceived quality of the decision-making process, the likelihood that a decision was made, and the perceived quality of the decisions that were made. The ELECTIA approach to decision-making makes alignment to values a central part of decision-making. What more can values-centred organisations do to ensure that employees reflect on and are guided by the organisation’s values?
  • The use of standard approaches to making decisions, such as frameworks or guiding principles, had a positive impact on the perceived quality of the decision-making process, on the likelihood of a decision being made, and on the perceived quality of the decisions that were made. In the first phase of this action research project, no standard decision-making approach was promoted or mandated, and a standard approach was used spontaneously in only around 10% of the decisions recorded, with no consistency in which decision-making approach was adopted. However, in the second phase of the project, the participants were asked to apply the ELECTIA approach in order to assess its impact on organisational decision-making. The impact was found to be very positive.

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