Business decisions struggle to keep up with market pace


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Most businesses are facing a reality where market and decision pace is going in opposite directions. Markets are moving faster and faster. Decisions are going slower and slower. A scenario which is not sustainable. And since market pace is not to slowing down, you better look into how to attack the decision making you can affect.

The classic decision maker world has changed

In the past we did see authority and power concentrated to few decision makers. with clear adjacent roles for recommender, approver and supporter. A model working fine when it was easier to predict the future.

Business decisions where backed by clear business cases. Business cases with qualified and quantified risks. And perhaps more than anything else revenues predictions where accurate and trusted. A model making it easy to define clear decision points.

The decision maker operated in an environment where the job at hand was to optimize the business for better and better results. An operating model rewarding small incremental changes in exchange for incremental improvement of results.

Business decisions are becoming more complex

But most businesses face a more complex reality. A reality characterized by vulnerability, uncertainty, complexity and ambiguity (VUCA). A leadership development with large similarities with what military leaders has seen.

Business are more vulnerable than in the past. Businesses life expectancy is shorter. We face larger security risks. The macro environment is less stable. Digital disruptions are in play across all industries.

The business uncertainties have increased. It is harder to predict future sales. The cost deviations are larger in commodity businesses. And we need to start earlier with less clear facts than in the past.

The complexity in markets and solutions is rising. Markets develop faster than in the past. Businesses need to specialize harder to stay relevant. And we are more dependent than ever before on the eco-systems we are part of.

Finally, we manage a more ambiguous reality. Where we need to make harsh trade-offs between executing current, and building new business. Balance between near term and future priorities. And where what is best now might not be best tomorrow.

Consensus decisions by a group of diverse stakeholders

In this more complex business landscape we involve more people in the decision making. Decisions are moving from a strong decision maker to a group taking in perspectives from more stakeholders.

With more stakeholders you get more angles of a decision covered. But at the same time it gets harder to reach any decision at all. The single biggest issue that decision groups face is to make any decision at all.

According to CEB a typical B2B Business have an average of 5.4 stakeholders in a decision group. And above 7 in the group the likelihood for any decision is almost gone.

Fast decisions come in small steps

The new reality calls for big decisions to be divided into many smaller steps. Build on what we know now. Define an execution direction where the next week, month or quarter’s actions are clear.

Consider adopting a strategy implementation model where you shorten each execution step. Turn years into quarters. Quarters into months etc.

Plan for agility where you can take the next part of the decision based on experiences gained since the last decisions point. A model allowing you to adjust along the journey as you better understand markets and customers.

Your three most important stakeholders

In the past we have based group decisions based on functional inputs. Where each unit covered their own base. Sales addressed sales issues, R&D addressed development challenges. And operations addressed the realization conundrum.

Going forward you might want to look at the stakeholders’ roles from the value they add to the decision team.

  • The Teacher – articulating a clear direction from start and making sure you adapt to new insights.
  • The Go-Getter – the driving force behind formulation and execution of actions.
  • The Skeptic – who focus on the problems and hurdles in a constructive way. When this stakeholder is on-board you have a clear way forward.

Questions for you and your team

  1. What is moving fastest for our business – our market or our decisions.
  2. How does our current decision making process works – start by understanding where you come from.
  3. What is slowing down our decisions – focus on finding systematic shortcomings.
  4. How can we improve team composition – with the goal to allow us to move faster
  5. How can we break down big decisions into smaller steps – with less demand on
  6. How do we secure we capture insights along the road – as input to future sub-decisions.
  7. What is the optimal pace for different decisions – not all decisions must be fast.

Additional reading suggestions 

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