When you are ready to a make decision, an entirely new set of issues emerge. People have already developed their vested interests in certain outcomes. If, however, you can figure out what will shape the decision before it happens, you have a fighting chance of making a solid case for Strategic thinking and decision making for an organization.
To have a more simple, clear, and streamlined decision-making exercise, answering certain strategic thinking questions early on will enable fast forwarding more quickly from debating and deciding into implementation and results!
Addressing questions like
- “Who owns making the decision?”
- “Who will the decision impact?”
- “Who should contribute to making the decision?”
- “What criteria will we use to make the decision?”
- “What levels or conditions across the criteria will signal making one decision or the other?”,
well before you are on the verge of making a decision would go a long way to this effect.
Strategic thinking and decision making go hand in hand; one decision-making solution to recommend when you are within an area of strategic certainty is based on research from Keith Stanovic, Emeritus Professor of Applied Psychology and Human Development, University of Toronto and former Canada Research Chair of Applied Cognitive Science and Richard West, professor emeritus of graduate psychology, University of Toronto, in which they identified System 1 and System 2 thinking. System 1 refers to how most people operate in their daily lives based on intuition. These decisions are rapid, automatic, reactive, implicit and driven by emotional associations.
In contrast, System 2 is the more labored, deliberate, explicit, evidence-based decision-making process. This normally consists of six logical steps: Define the problem, Identify the top criteria needed to, adequately compare your options, rank the significance of the criteria according to weighted averages, generate a list of the available options, assign ratings to the options, and compare them head to head, and, choose the highest number. In many cases, however, business leaders have to make critical decisions with no data to compare because it’s never been done. Problems like that require a new kind of Strategic thinking and decision making along with a new kind of strategic leadership.
When you are trying to innovate radically – in the face of strategic uncertainty – you by definition do not have any prior data to use as your basis. That’s where the hypothesis-based approach, comes into play. The hypothesis-based approach is closely related to idea of “fail fast and fail often.” By running rapid tests of simplified models, you learn more that any amount of theorizing.
A revolutionary way to execute innovation is spending less time and resources on desk analysis and moving directly into testing hypotheses. That reorders the idea selection-phase to protect your company from decisions based on gut-feelings backed up by confirmation bias. Now you can begin to build a culture where employees conduct experiments instead of just float ideas. You’ll select the most practical innovation pathway based on proven hypotheses instead of unproven ideas and turn them into innovation project with higher probability to succeed and create longer lasting business value.
Most managers have a preference stemming from their own experiences and successes in implementing a given strategy paradigm. So, open your mind to this broader range of paradigms for your tool kit in the context of Strategic thinking and decision making. Is your future predictable or not? Can you control it, or will the environment control you?