How Companies Can Make Better Decisions

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After viewing the above video, reflect on the following questions in a well-written post on your Reflection Blog.

• Marcia Blenko argues that decision effectiveness correlates positively with employee engagement and organizational performance. How do you think that employee engagement relates to decision effectiveness?
• What are some impediments to good decision making?
• Blenko suggests that there are four elements of good decisions: quality, speed, yield, and effort. In your opinion, is there anything missing from this list?
• What can you take away from this exercise to immediately use in your career?

Decision making in today’s dynamic business environment is essential to an organization’s success and competitiveness. Companies that understand this concept design and structure their organizations to exploit the constant changing environment and the needs of their customers. Perhaps one of the most important aspects of making effective and timely decisions is the contribution and engagement of the company’s employees. While executives make important decisions that chart the course of their organization, the employee that work day-in and day-out within the environment and with customers have a valuable perspective on the terrain that has the potential for the decision makers to make more quality decisions. In fact, in an organization where decisions are timely and effective, this allows for better employee influence and activity. According to Marccia Blenko (2010), “Interestingly we also saw a high correlation between decision effectiveness and employee engagement. Which I guess shouldn’t be surprising that companies where it’s easier to make decisions and get things done are more simulating places for employees to work.” Indeed, making effective decisions not only improves employee engagement, but overall performance and profits. Marcia Blenco, Michael Mankins, and Paul Roger (2010) highlight the following findings from their research, “We found that decision effectiveness and financial results correlated at a 95% confidence level or higher for every country, industry, and company size in our sample.” I believe that when an organization has established a decision-making process that supports their industry and environment, this ensures better quality information flow and participation by all employees. Thus, they feel empowered and feel that they contribute to the organizations progress.

There are many impediment to effective decision making. In fact, Blenko (2010) notes that organizations today have become more complicated as a result of restructuring and trying new things, which has caused confusion about how decisions are made. These well-intended restructuring events have in essence, had the opposite effects. Blenko et al. (2010) have identified the four following elements that are associated with making good decisions:

1.     Decision Quality: whether decisions proved to be right more often than not.

2.     Speed: whether decisions were made faster or slower than competitors.

3.     Yield: how well decisions were translated into action.

4.     Effort: The time, trouble, and expense required for each key decision.

I believe that the above elements are vital to making effective decisions, I would also add some form of feedback system. Though we can concentrate on each of the four elements in-depth, it is important to evaluate or examine critical decision after the fact. In other words, reviewing the situation, context, decision(s) holistically in an after action review manner and used in an management program.

Making effective decision is not only an important aspect in business, but in everyday situations as well. When making important decisions, I believe that using the four elements could increase the quality of one’s critical thinking as it forces one to see the decision being made as more of a process than automatically addressing an issue. Being able to view decisions at an in-depth level (without over thinking) could prove to be beneficial for both an individual and an organization.

References

Blenko, M. (2010). How Companies Can Make Better Decisions, Faster. Harvard Business Review. Retrieved from https://www.youtube.com/watch?v=pbxpg6D4Hk8.

Blenko, M., Mankins, M., & Rogers, P. (2010). The Decision-Driven Organization. Harvard Business Review. Retrieved from https://hbr.org/2010/06/the-decision-driven-organization.