Agile, Business Performance Consulting, Leadership

Structured decision making for developing strategy

In the evolving and fast-moving technology sector, an increasing complaint coming from executives is their inability to develop an effective strategy due to a lack of certainty in the market.

To understand what’s going on here, let’s start by looking at what an effective strategy is and what role decision making plays in that process.

An effective strategy is an integrated set of decisions that continually positions the organization to achieve its purpose in the wider context within which it exists. But how are those decisions being made? Are they being made ad-hoc? by the executive in isolation? by internal politics? or with a structured clear apporach?

The debate also continues online as to the role of agility in an organization’s strategy. A strategy must remain relevant to be able to respond when the market shifts. Over the longer term, a cohesive story will emerge when an updated strategy remains grounded in the organization’s purpose.

Roger Martin at the Harvard Business Review recently posted on this topic and asks the question, “While executives use uncertainty as an excuse to put off making strategic choices, how do they know the competition isn’t strategizing their way to first mover advantage to limit their future options?”

By getting blindsided in an aggressive industry (see book: The Innovator’s Dilema), Martin’s suggesting some executives are missing the fact that by deciding to do nothing, they have chosen their strategy, poorly.

Now when you consider organizational agility and ability to update strategy, we see the importance of the actual strategic decision making process. Ask the questions:

  • What is your organization’s purpose? Does it have one?
  • What is the process your leadership team follows to make and communicate the organization’s strategic decisions?

When leadership teams and boards get blindsided, what often emerges is an inability to demonstrate or practice a rapid and repeatable decision making process to continually determine and update their strategy as needed.

Getting better at strategic decision making is not as hard as it sounds. A decision making process is easily learned and increasingly needed to unlock organizational performance. It should include the objective of the decision being made, its criteria, risks, value calculations, and result in an actual decision.

It then falls to the leadership of an organization to implement this tool with rigor, discipline and transparency to ensure it is used and communicated effectively internally.

Only once an organization understands how to make strategic decisions will its executives be able to regularly update and chart their course in a changing environment to seize those market opportunities.

Discussion

Trackbacks/Pingbacks

  1. Pingback: Procurement governance – not as painful as it sounds | It's more fun than a TPS report... - February 28, 2013

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: