Making good decisions is such a crucial element of running a business that it has even given rise to a synonym for members of the C-suite: decision-makers. But the activity has become significantly more complex in recent years, as Raconteur research shows, with more people involved than ever before and the level of knowledge each decision-maker needs becoming greater.
To understand how smart organisations can deal with this complexity, Raconteur hosted a panel at StrategyFest with three business leaders to explore how to navigate decision-making on a global level, how using data can help and whether too many cooks really do spoil the broth.
- Kristen Brown (KB): vice-president of strategy, Schneider Electric UK&I
- Pete Williams (PW): director of data, Penguin Random House
- Karim Zuhri (KZ): general manager and chief operating officer, Cascade
Raconteur’s research found that, on average, 11 people are involved in each business decision. Is this really effective?
I think there are positives and negatives to having a lot of people involved. The positive is that everyone feels heard and that they are part of the decision, which aids buy-in. The negative is that it can compromise the final decision because you want to please everyone.
Most importantly, having a lot of people can delay decision-making. For me, a fast decision is much better than a very good but late decision. If we are bringing 11 people into the room to make a decision, we need to end up with one decision-maker, or at least someone who can have the final say.
Are there tools that organisations can use to streamline decision-making in these larger groups?
I think data is vital. You would expect me to say that, being a data leader – but my mantra is about better and faster decision-making, about making sure people are informed.
What’s important is that you’ve got the right information to make the right decision. At that point, it doesn’t matter whether you’ve got one or 15 people; if you’ve got the right information, it’s going to look like common sense, not like data-driven decision-making.
Getting the right information and understanding the right parameters is something that often isn’t as well-considered as it could be.
Context is important, though. It’s important to look behind the data and at correlation versus causation. Think about a basketball team where the coach monitors each player’s performance. Say the star of the team eats a hot dog before every game and performs extremely well, every time. Now the coach can choose to tell the entire team that they should eat hot dogs before the game or he can understand that the hot dog maybe isn’t the deciding factor.
Within Schneider Electric, we have global lines of business. So, when we think about decision-making based on data, we think about it as both vertical data (what are we doing, from the regional to the global entity) and horizontal data (how the data that we’re using to make the decision carries through operations and execution).
That foundation of data, presented in the right way, accelerates the decision-making process because people know what information they need to make the correct decisions, especially financial and operational ones.
Do you think that data is helping to democratise decision-making?
The thing that excites me, compared to old-fashioned decision-making and organisational structures, is that data is the only thing that flows horizontally across the organisation.
In the past, we might only have looked downwards from the top of our pyramid and think, ‘This is fine for my team.’ But every decision in an organisation has upstream and downstream implications. And if you don’t consider those, then what you’re doing could well absolutely sabotage somebody somewhere else in your organisation. That’s what a more egalitarian, data-democratised company understands. That’s why more people are involved. But that doesn’t necessarily mean the decision processes are longer or in any way subpar. I think actually it’s better, because it should be about understanding all the effects and not just one.
How should global organisations approach making strategic decisions that affect the whole business?
By ensuring that you’re hearing from the people on the front lines of the business. As a global organisation, the strategy around our products and customer segments is often set by our global teams who focus on the portfolio level across the world, but the execution is owned by the individual regions. We love that approach because it means that we can centralise product development to help gain efficiencies, but we have a local approach to meeting consumer demand.
The challenge is that global decision-making can often be tied to anecdotes or generalisations. You can only get to the truth by talking to the people who are actually executing the work. So we’re not just trying to think about what global success means, but taking the nuance of each of our individual regions.
What success means in each country is so important. I worked for a large group of 22 brands and each had their own strategy. Every time we tried to take a strategy from, say, the US to the UK, it failed. Culture and regionalisation is becoming more important because we are trying to globalise everything. But globalisation doesn’t mean one-size-fits-all.
Our research has shown that a greater understanding of other functions is needed to make better decisions. Where should leaders start when it comes to gaining this?
It has been written that process is ‘the scaffolding of productivity.’ What I try to drive in my team is you have to start with the process, because understanding that helps us understand what we’re pitching as a solution, how we’re solving someone’s problem.
You can use something like a Tableau dashboard and think “this person has this tool, they can make better decisions.” But you have to be able to articulate the process of what people are doing, thinking, deciding along each step of the way before you can sit down and say “here, let me provide something to you.” There’s a lot of change management that’s involved when you start asking people to think holistically around processes rather than around individual departments.
In the industry we talk a lot about data literacy. The ability for people in an organisation to recognise, consume, advocate and argue with data, to be confident of its origin and therefore that it’s valid for use and can drive the right decisions. For some, that feels arrogant or antagonistic where we, as data specialists, may not understand the business operation enough. We concern ourselves with data literacy versus business literacy all the time.
You can only gain insight by sitting in a department and learning about the decision-making processes as they happen and what is really important to people. What joins processes together is how the data flows through the organisation and that is the best thread to pull on if you want to gain some insights.
This panel discussion was run in partnership with StrategyFest. The session, along with others with the likes of PepsiCo, Kellogg’s, Ikea and JP Morgan Chase & Co., can be watched on demand here.