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I manage CIPFA Finance Advisory Networks and I am a very experienced accountant,manager, facilitator, trainer and presenter with a very wide experience of local authority and not for profit finance, accounting,management and leadership.

Sunday 7 October 2012

DECISIONS DECISIONS -- HOW DO WE MAKE THEM?






Is this how you make your decisions?
We always seem to temper our decisions on policy with what might be acceptable rather than what we see as the right decision. Too often we are worried about what reactions we will generate by  putting forward what we feel is right. Often we are concerned that our approach will not be seen as particularly realistic in the way our organisation currently operates. But is our decision wrong or does the way our current organisation functions need to change to make our decision more acceptable. Our decision may be correct in the macro sense but may be hamstrung in the micro sense because it will not or will be very difficult to deliver, given our own existing organisational circumstances and culture.
 
Decisions need to be made after healthy and vigorous debate. Alfred P  Sloan Jr the legendary CEO of GM  argued that without any disagreements on a particular issue --there is no proper understanding of what that issue really means. Disagreement can provide an alternative to the accepted status quo and any decision made without proper disagreement and consideration of alternative approaches is a huge risk for the organisation. Disagreement is needed to stimulate creative thinking and problem solving.
 
I suppose we have all been there in the meeting where a senior officer of an organisation presents a particular approach that he\she passionately believes in as the way forward. You on the other other hand see the flaws in it in terms of its potential delivery and outcomes. What do you do? Keep quiet and agree? State your case? Offer a muted response?
 
Peter Drucker argues strongly that decisions on issues should always be based on what is right not who is right. This is sometimes very difficult to follow in practice but nevertheless,in the final analysis, it is the correct approach.
 
You must argue for what you believe is right -- Why? Because in the end there will be a compromise within the organisation on most if not all issues under consideration. Compromises will need to be based on the right decisions not the wrong decisions, that is why it is important to argue for what is right in your view,so the likelihood will be that a future compromise will be based upon it.
 
When Peter Drucker was doing some consultancy for Alfred P Sloan, Sloan Responded, " My only instruction to you is to put down what you think is right as you see it .....Don't worry about the reaction or the compromises that need to be made to make your decision work .... Executives in this company are perfectly able to make compromises, but they can't make compromises unless you tell them what "right" is."
 
Compromises from positions will be made however it will be important to identify the compromises that will get you at least half way to the "right" solution and compromises that will get you nowhere near the right solution. The quality of any compromise is nearly as important as initially propagating the "right" solution to a particular problem.

To make an effective decision one has to understand the problem the decision relates to -- i.e. the symptoms and causes of the problem. Decisions frequently address the symptoms of problems but not the root causes of those symptoms.The key data for decision making needs to be analysed although there are times when this may not be totally possible to achieve. In that case, data will need to be prioritised in importance and greater weighting given to more important data which can be used to inform decision making.

The ancient philosophers stated that decisions should not be made unless all of the underlying facts of a situation are known, in reality this is seldom the case - so decision makers need to work with what they have got,especially if decisions need to be made quickly. This is where the quality and priority of information needs to be properly assessed and judgements on it formed,before a final decision is taken.

Oh and one other thing - decisions are not just pronouncements, they need to be translated into actions through action planning and delivery. If they are not then there would have been little point in making the decision in the first place.
 
 
 

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