Making Decisions That Work For You!

Guest Post by Ed Perkins (first posted on CERM ® RISK INSIGHTS – reposted here with permission)

There is a lot of literature written on decision making, ‘how to’, best practices, process, factors and so to follow to make ‘good’ decisions.  We have been exploring ‘risk based’  decision making in these blogs.  We have looked at factors, process, frameworks, psychology and bias.

But we have not discussed perhaps the most important aspect of any decision – implementation or that double edged word ‘execution.’  (Of course this assumes that the decision maker wants something to actually happen as a result of the decision, but that is a topic for another day).

Let’s use the nicer word – Implementation – which implies there is a course of ACTION, with a timeframe for results to be produced or to occur.

WHAT COULD GO WRONG?

The decision has been made, orders given – implement it – what could possibly go wrong?  Well there is a whole taxonomy of things that could make the implementation go sideways.  Resources are not provided, the alternative chosen is too risky for immediate application, unknown factors arise (or known ones that were conveniently ignored).  And perhaps most importantly, but also mostly ignored – can the organization actually perform the steps necessary to achieve the decision?  So, things to think about include:

• Do you have the right talent?  People are not plug and play.
• Timeframes must be realistic.  Even if a company culture is receptive to change or has agreed to an ambitious schedule, there is a limit to the amount of change a person, organization or technology can absorb before rate of change becomes destabilizing.

This issue – of organizational capability – is especially evident when implementation involves new/changed  process, procedures, or compliance.  Organizational culture goes hand in hand with capability.

MECHANISTIC VS. ORGANIC QUALITY THINKING

A recent CERM® Insights post, ‘Mechanistic vs. Organic Quality Thinking'[1] discussed the effects of organizational culture applied to processes and quality.  Mechanistic cultures can be described as ‘closed’ with a high degree of procedures and control, where organic cultures as ‘open’, with less formality and more adaptability.

The authors note that the “essential difference between robots (the mechanical ‘cogs in a machine’ approach) and an organic approach is the degree of involvement and variability in behaviour of people”.  In reality, no organization can operate exclusively in each approach, as the authors note “organisations, and parts of them, are all at different positions on the continuum from Organic / open management systems at one end of the scale to Mechanistic / closed management systems at the other”.

These management approaches reflect and also create the organizational culture. Organizational culture is one of the most important aspects of decision making. Culture affects how effective key management decisions are (or how they “stick”).

Capability maturity models (aka CMMs) are popular to describe organizational culture and the ability of organizations to behave (perform) in a repeatable (mechanistic) manner. Organizational maturity level has a very important impact on the successful implementation of decisions.  The more mature (and repeatable) the organization, the more on the mechanistic end of the continuum it is.

No matter how good your risk-based decision making, if the implementation requires more ‘rigor’ in process repeatability from the organization than it is culturally capable of giving (performing), then your decisions are either in vain or will require a long and painful adaptation.

This is especially evident with decisions to enforce compliance with regulations and best practices, requiring a high degree of rigor, which employees may not see as adding value to the product or service they provide.

There is an organic approach to CMM that works with both Mechanistic and Organic organizations.

If an organization has to change to remain effective, then you won’t have long to wait for something to break.. When something goes wrong, employees will be happy to accept an appropriate, possibly incremental, addition of a process rather than worrying about becoming the scapegoat for the breakage.

Watch for a discussion of ‘Organic CMM’ in a future post.

Reference:

[1] Mechanistic vs. Organic Quality Thinking – Ian Rosam / Rob Peddle; CERM® Risk Insights #33;