Strategic Decision Making Steps – Action Management Associates
Balancing the risks in strategic decision making.
In Principles of Psychology, William James noted that “there is no more miserable human being than one in whom nothing is habitual but indecision.” The same could be said of organizations. Even the best companies struggle at times with their efforts to make strategic decisions. Research has shown that the more options that are available in a strategic decision, the more pull the status quo exerts in the process.
Traditional business models where a strategic decision made at the start of the year governs a business for the next 12 to 18 months are often no longer realistic for rapidly changing and sometimes highly volatile markets. The strategic decision making process an organization uses needs to accommodate unexpected changes while providing a way to evaluate risk (the measurable probability of an outcome) and uncertainty (the dimension of probability that cannot be measured but must be resolved before a strategic decision can be made).
The steps to decision making presented in Action Management’s critical thinking programs combine the rational (risk) and emotional (uncertainty) aspects of strategic decision making in an easily applied process that can identify and apply objective data in even highly subjective decisions. In environments where people tend to make strategic decisions in silos, the use of a shared process and objective matrix can significantly increase the probability that there will be broad engagement with and organizational support for a strategic decision.
The realities of risk, uncertainty, and our proven inability to predict the future underscore the importance of using a criteria/data-driven approach to making strategic decisions. Action Management’s decision making process provides the objective framework needed to supersede inertia and our tendency to allow the fear of a bad decision to keep us from making any decision.