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Thursday, August 21, 2008

Six Steps for Organizational decision crafting

Following is the preface of my book that I started writing in 2004 on Decision Crafting

I may have to revive the project after reading what was written in the preface

When we look at how a decision is made and executed – we can see six steps. First step is the assessment of the situation including where we stand with respect to the environment. An enterprise is a living entity. It exists in a dynamic environment consisting of the consumers of enterprise products, competitors producing the same or similar products, suppliers of unprocessed raw material that go into making of product, employees, internal enterprise dynamics, etc. Assessing a situation keeping the interest of the enterprise as the objective becomes a Herculean task sometimes. This assessment involves collection, collation, filtering and classification of data. Next step is the explanation of why are things as they are. Events and trends have an interrelationship that result in great variations in outcome of their interactions. Accurate explanation of why are things as they are becomes an important step in any decision-making. Third step in the decision-making is the prediction, projection and forecasting. This involves analyzing what will happen if the trends continue as they are. The fourth step is generating options regarding what all can be done to align the situation as per the requirements of the enterprise. The next step is choosing the relevant option or combination of options to be executed. Once a decision has been made, the execution of the decided option requires packaging it and planning to get the relevant buy-in from all the stakeholders.

Most decisions that are made in the enterprise undergo these six steps. However, the time given to each of these decision steps varies considerably based on the value of the consequences of an incorrect decision in the mind of the decision maker, time available for decision making, accuracy of the data available at each steps. As is evident the requirements of decision-making starting from data collection to optimized execution of the chosen option are enormous.

It is proposed that decision-making in the large enterprises involve much more than mere data or information analysis. Decisions need to be crafted – it is imperative that data, information, knowledge and other soft factors should be taken into account together when decisions are created and executed in the organization. We are talking about decisions that have higher values in terms of risk or have major impact on the enterprise future.

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