Decisions in businesses are often neither well thought out, appropriate or well executed. This pack looks at some of the aspects of making effective strategic decisions

1. © 2015 - artITians
Slide 1 better business by design
Effective Strategic Decision Making
Kim Parker
Melbourne

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Slide 2 better business by design
Contents
• An Effective Decision Making Framework
• Multiple facets of a business
• What are others saying
• Relevant Statistics
• Drivers of Change
• Factors Affecting Decisions
• Understanding business touch points
• What is the future of effective decision making
• Value Proposition for establishing a decision making framework

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Slide 3 better business by design
An Effective Decision Making Framework
• Decisions and how they are executed are the
lifeline of an organisation.
• At some point in establishing a case to support a
business initiative or business change a decision
needs to be made either to proceed or to not
proceed.
Decisions
Why
What
HowWho
When
• In building the case information will have been gathered and collective knowledge
will have been applied to determine it adequacy.
• Risks will have been identified and presumably the cost of mitigation coupled with
both their impact and the likelihood of their occurring will have been established.
• A decision can be reached by balancing the benefits of the initiative against the cost
of implementation, the impact on the business if it is not and the importance of its
contribution into the realisation of Business Goals and Strategy.
• Decision needs to be also made with an appreciation of other competing initiatives in
the pipeline.
Decision making is not an activity that is universally done well

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Slide 4 better business by design
What others are saying
“Decision making is a powerful tool that can make or break a company. Some
companies are known for their risk taking, others for playing it safe. As a CFO, I always
find it challenging to strike the right balance between risk and opportunities, ambition and
capabilities.”
Patrick Dupuis: Chief Financial Officer (CFO) of PayPal
“The best decisions are those that are aligned with the strategic intent of the organisation
and developments in the market and that support the organisation’s ability to perform ..
The company that wins today is the one that makes the best decisions and is able to act
on them quickly”
Lukas Michel : 'Managing Director of i3 Performance Solutions
“Half the decisions in organisations fail. Studies of 356 decisions in medium to large
organisations in US and Canada reveal that these failure can be traced to managers
who impose solution, limit the search for alternatives, and use power to implement their
plan.
Managers who make the need for action clear at the outset, set objectives carry out
unrestricted search for solution, are more apt to be successful.”
Paul C. Nutt : Professor of Management Sciences and Public Policy and Management in the Fisher College of Business at Ohio State
University.
Good strategic decisions are made from adopting good processes

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Relevant Statistics
37% of executives say their companies are “very good or excellent at
strategy execution
53% of implementers cannot state their company’s strategy in its entirety
95% of employees in most organisations do not understand their
organisations strategy.
Source: Harvard Business Review
70% of typical organisations do not link their strategic priorities to their
budget
Source: Mark Hughes; Journal of Change Management
If strategic intent is not well articulated how can decisions be effective

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Slide 6 better business by design
Drivers of Change
External
Better decisions are required in order to address:
• Competitors from gaining market share through being more nimble.
• Reputational damage though poor execution or being ‘too slow’
• Customers demanding products and services.
• Legislative changes forcing changes
• Technical innovation opening opportunities
Internal
Decisions have resulted in outcomes that have not been beneficial to the organisation.
• Stake/Stockholders require improved Returns on Investment
• Key Performance Indicators need to be satisfied as well as time pressures.
• Increased need to remove uncertainty and unresolved ambiguity.
• Accountability to be assigned.
• Conflict needs to be better managed.
• Solution bias needs to be managed to ensure ongoing strategic alignment.
• Fear of change to be overcome to ensure progress but not change for changes
sake.

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Factors affecting Decisions
• Uncertainty / unresolved ambiguity.
• Time pressures
• Statutory/Legislative Requirements
• Conflict
• Delivery Capability
• Organisational inertia
• Defined Principles
• Ethics
Drivers
Impact
Vision &
Strategy
Capability
Process &
Role
Function &
Information
Service Delivery
Infrastructure
Cost dimensions
Financial
Resource
Customer
Operational
Benefits
Other factors

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Understanding business touch points
Decisions affect many aspects of the business. Each should be considered before
committing to a course of action
Strategy
Objective
Goal
Measure
Capability
Function
Process
•Role
•Performance
Information
•Data element
•Data Store
Technology
Application
•Application Function
•Interface
•SLA
Infrastructure
•Infrastructure Component

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What is the future of effective decision making
Desired Outcome
Implemented framework providing:
– An optimised decision making process
– A supporting Knowledge Repository.
– A Governance model ensuring compliance.
Consistently good and timely decisions.
Decision Maturity
• Increases over time
• Improved strategic alignment.
• Effective option identification & analysis
• Greater understanding of risk and
consequences.
• Better investment management

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Slide 10 better business by design
Value Proposition for establishing a
decision making framework
An established Decision Making framework allows for:
• Informed and well articulated strategic decisions to be consistently
made.
• Increased awareness of business impacts, risks and
consequences of actions.
• Enhanced capacity to learn from mistakes.
• Better targeted Investments and reduced waste. (time and money).
• Knowledgeable implementers of strategy.
• More responsiveness to changing market conditions.
• Enhanced competitiveness.
Good outcomes may result from ad-hoc decisions but there is no guarantee.
Adopting a decision framework can improve the likelihood of success