Effective 'Goldilocks' Decision Making

In IT, we all make lots of decisions: What tools to buy, who to hire, what to invest in. Decisions are often complex and politically sensitive, involving a large number of stakeholders. Decision making therefore is rarely as simple as just running the numbers and coming to the right answer because "right" is relative. Good decision making recognizes that each decision has two body parts: a head and a heart.

The head runs the numbers. Analytical and fact-based, head issues employ proven processes to reach reliable outcomes. They are rational, repeatable and fair. As Barry Beracha, a former CEO of US-based Sara Lee Bakery Group, once said: "In God we trust. All others bring data." The problem is, on their own, head issues are hopelessly inadequate for anything but the simplest of decisions.

That's where the heart comes in. Heart issues encompass experience, gut feel, judgement and the desire for fair and equitable outcomes. Often trading political capital and power to demonstrate or demand loyalty, they expose hidden alliances and mutual aggression. Heart arguments hinge on trust and giving people time for debate. Careful timing - knowing when to pose a question and suggest a solution - makes a big impact on the heart.

Effective decision making combines the best of head and heart to produce reliable and timely outcomes. An environment for effective decision making comprises three key elements:

Process | A systematic series of actions that is both familiar to stakeholders and repeatable serves as the backbone of decision making. With too much process, nothing ever gets decided. With too little process, none of your stakeholders will support you.

Structure | A standardized list of the stakeholders to involve in each type of decision serves to flesh out the process backbone. With too little structure, no one knows who is involved and accountable. Have too much, and death by committee ensues.

Communications | A program of messages serves to bind together process and structure by informing stakeholders about decisions under consideration, providing a conduit for civil debate on contentious issues, synchronizing activities and keeping the decision-making process moving forward. Surprisingly, too much communication reduces information dissemination to the point of unwelcome noise and is just as bad as too little when no one knows what's going on.

Getting to a Goldilocks decision-making process. "Goldilocks" was a golden haired child involved with three bears in the eponymous fairy tale: Goldilocks and the Three Bears. In this tale, little girl Goldilocks enters the home of a bear family while they - mother, father and baby bear - are out. She explores their home, finding the mother's and father's things too this or too that for her (usually two extremes, like porridge that is either too hot or too cold); but everything that belongs to the baby bear is "just right".

In our approach to decision making, "just right" is also what we are seeking to achieve. A Goldilocks decision-making process achieves the right balance between rigour and cost.

The journey to Goldilocks processes begins with diagnosing existing decision-making practices by asking yourself: Are we producing good decisions now? Are our decisions timely? Does our enterprise respect the defined processes, or have they been replaced with ad hoc processes?

Depending on the findings of this soul searching, you can then address over- or under-engineered steps. For example, if you determine that you are not making the right decisions and outcomes are not aligned with business priorities, then this could be for two reasons: either because a mechanistic process is in use that does not add value to decision making (such as a bureaucratic nightmare), or little reference to business priorities is made during decision making.

To address these issues, introduce a change to your process so that it supports evaluation of initiatives using both objective and subjective criteria that align with business strategy. This will address the inflexibility problem by encouraging subjective assessment. In addition, it will address the lack of reference to strategic business priorities by formalizing the criteria as part of the decision process.

Exceptions happen, however, so it's worth planning for them. A circumstance can arise where a quick decision is needed. A decision that at first glance looks like it is low impact can suddenly turn into a much bigger deal. Or, a left field issue emerges that does not fit the established decision approach.

Frequently, exceptions processes use informal stakeholder communications to reach a decision with ratification coming later using the standard process. Those enterprises with good decision processes document exceptions and modify their standard processes to accommodate the conditions that gave rise to the exception.

Some decisions also may have a bigger impact on the enterprise. A process that properly distinguishes these differences in impact creates a more effective decision-making environment.

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Getting to a Goldilocks decision-making structure. Process is good as far as it goes, but it is only part of the story. A Goldilocks decision-making structure that balances oversight and agility also is needed.

To help assess the effectiveness of your decision structures, ask yourself: Are we making the right decisions? Are we making timely decisions? Are decisions made with appropriate levels of oversight; that is, are decisions being made by people with the right level of seniority, or are the people making decisions too senior? Is our enterprise showing respect for and following the documented structure, or has it been replaced by ad hoc structures?

Depending on your findings, you will identify areas where your decision-making structure is just right and other areas where it is either too much or too little. Suppose you have a problem making timely decisions. Few of the decision process stages execute in a timely and predictable manner. There are two common reasons for this failure: there are either too many senior-level stakeholders involved, or there are difficulties identifying and contacting stakeholders.

To address this, look at the delegated authorities in your enterprise. Do they allow decision making at low enough levels to unclog the decision process? Also, actively engage with stakeholders to help ensure they understand their roles and responsibilities.

Getting to Goldilocks decision-making communications. Finally, to glue it all together, you need communications. The temptation here, and one that must be resisted, is to adopt a one-size-fits-all approach.

Communicating too much detail or communicating at the wrong time risks confusing stakeholders. Communicating insufficiently, late or inappropriately antagonizes them. Either way, chances of success are diminished.

Fortunately, Goldilocks comes to the rescue again. "Just right" communications delivers just the right information at just the right time to just the right people. To this end, appropriate decision making relies on stakeholder-specific messages, carefully designed around six components: who, why, what, when, how and feedback.

As for how to begin communicating like Goldilocks, ask yourself: Are we making the right decisions? Are our communications delivering the right messages to the right people? Are we delivering messages that are being understood by our stakeholders? Are we taking time to listen to feedback, and do we have a channel through which we can receive it?(Too often forgotten, listening is a very useful way of taking the "temperature" of the enterprise.)

Depending on your answers, you may uncover areas of too much or too little communication. For example, you may find that stakeholders just aren't getting the messages. If there's no evidence that they are informed about decisions or their role in the process, then the problem could be due to two reasons: the messages being delivered are either too complex for stakeholders to understand and relate to them, or they are insufficient and fail to inform stakeholders.

To address this problem, actively seek customer feedback on the decision process and outcomes. Gather feedback from stakeholders via both face-to-face discussions and formal surveys to help ensure the messages are getting across and verify what they believe and understand as a result. Also, listen to "noise" - that is, unofficial feedback and "water cooler" conversations. If noise increases or if you get the same half-truth from a number of sources, you may have a problem that improved communications can fix.

Making Goldilocks decisions. An effective IT decision-making environment helps to increase CIO credibility by establishing a virtuous cycle of process, structure and communications. Such an environment comprises: a decision-making process that achieves the right balance between rigor and cost; a decision-making structure that attains the right balance between oversight and agility; and decision-making communications that deliver the right information at the right time to the right people without overloading them with irrelevant facts.

To create an effective decision-making environment, a CIO must begin by assessing their existing one and then asking themselves: "What would Goldilocks do in a situation like this?"

Andrew Rowsell-Jones is vice president and research director for Gartner's CIO Executive Programs

Copyright © 2008 IDG Communications, Inc.

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