Role of Decision-Makers in Business Strategy

Last week, I posted about data strategies’ tendency to focus on the data itself, overlooking the (data-driven) decisioning process itself. All it not lost. First, it is appropriate that the majority of the focus remains on the supply of high-quality #data relative to the perceived demand for it through the lenses of specific use cases. But there is an opportunity to complement this by addressing the decisioning process itself. 7 initiatives you can consider: 1) Create a structured decision-making framework that integrates data into the strategic decision-making process. This is a reusable framework that can be used to explain in a variety of scenarios how decisions can be made. Intuition is not immediately a bad thing, but the framework raises awareness about its limitations, and the role of data to overcome them. 2) Equip leaders with the skills to interpret and use data effectively in strategic contexts. This can include offering training programs focusing on data literacy, decision-making biases, hypothesis development, and data #analytics techniques tailored for strategic planning. A light version could be an on-demand training. 3) Improve your #MI systems and dashboards to provide real-time, relevant, and easily interpretable data for strategic decision-makers. If data is to play a supporting role to intuition in a number of important scenarios, then at least that data should be available and reliable. 4) Encourage a #dataculture, including in the top executive tier. This is the most important and all-encompassing recommendation, but at the same time the least tactical and tangible. Promote the use of data in strategic discussions, celebrate data-driven successes, and create forums for sharing best practices. 5) Integrate #datascientists within strategic planning teams. Explore options to assign them to work directly with executives on strategic initiatives, providing data analysis, modeling, and interpretation services as part of the decision-making process. 6) Make decisioning a formal pillar of your #datastrategy alongside common existing ones like data architecture, data quality, and metadata management. Develop initiatives and goals focused on improving decision-making processes, including training, tools, and metrics. 7) Conduct strategic data reviews to evaluate how effectively data was used. Avoid being overly critical of the decision-makers; the goal is to refine the process, not question the decisions themselves. Consider what data could have been sought at the time to validate or challenge the decision. Both data and intuition have roles to play in strategic decision-making. No leap in data or #AI will change that. The goal is to balance the two, which requires investment in the decision-making process to complement the existing focus on the data itself. Full POV ➡️ https://lnkd.in/e3F-R6V7

What's executives' biggest concern? Growth? Global instability? Lack of innovation? According to a Harvard Business Review survey of 400 executives, “strategy execution” topped their list of 80 issues, believing their organizations failed to execute from 66–75% of the time. But here's the truth: They've created their own biggest problem, because "poor execution" isn't the cause. The real problem is the lack of making and regularly communicating a set of clear strategic choices. And that's an executive's number one job. Because when people have the right strategic context, they can easily make their own choices aligned to support and deliver against the overarching strategy. Roger Martin captures this perfectly: "The very best strategic leadership helps the entire organization understand that all of its choices result in the strategy that customers experience, creating a framework by which every person in the organization makes the choices he or she needs to make." Martin's key insight? You can't tell where strategy ends and execution begins. Because both involve making choices under uncertainty, competition, and within constraints. #Strategy #Leadership #OrganizationalEffectiveness

Decisions, decisions, decisions… As leaders, a large part of our role comprises making and communicating decisions, and how our performance is perceived by others is driven by how effective we are at making decisions and by the quality of the outcomes stemming from them. Of course we are all aware of this, and so we can sometimes lose sight of the nature of some of the decisions we are faced with and the optimal approach to making and sharing them. We can feel pressured to treat every decison as an urgent or emergent one, and worry that deferring a decision, or changing one already made for that matter, can make us appear weak or ineffective, while making an immediate decision and sticking to it may make us appear strong and ‘decisive.’ It is true that in some circumstances any decision is better than no decision, as in these situations making any decision unlocks a flow of information that enables rapid course correction and convergence on an optimal outcome - however, when making this type of decision, it is essential that its exploratory nature and the probability of susbequent course correction is understood and fully communicated at the point of decision. It is also true that in some circumstances decisions absolutely must be made right now, usually because the context is emergent and the outcome critical. In these situations, delay is suboptimal and potentially catastrophic, to the extent that the risk of a suboptimal decision is less impactful than the risks arising from delay. In these situations, the critical nature of the decision and the acceptability of imperfect outcomes should be fully understood and properly communicated at the point of decision. Often though, allowing a situation to develop or a context to emerge facilitates optimal decision making and secures a better outcome. In these situations, which for many leaders form the majority of decisons they need to make, it is important to remember that a decision to wait is in itself a positive decision, and is neither weak nor indecisive. The decision to delay, the rationale for the decision, and what needs to be true for a final decision to be made, should all be properly communicated at the point of decision. The key decision skills leaders should focus on developing are; (i) distinguishing between these three types of decision opportunities; (ii) treating each appropriately; (iii) properly and timely communicating the rationale for the selected approach.

A wake-up call for CFOs The role of the CFO has evolved and it’s happening faster than ever. Today, business integration is not just a trend; it's becoming the foundation of modern organizations. Businesses are blending operations, strategy, technology, and finance into a unified framework. In this new reality, CFOs are no longer just the financial stewards. They are key players in driving business performance. As businesses grow increasingly complex and interconnected, successful leaders must look beyond traditional financial roles. The most impactful CFOs are those who see the whole picture, from market dynamics and competitive forces to customer value creation and innovation. Finance is no longer an isolated function but a strategic tool for enabling growth and competitive advantage. Financial performance doesn't come from managing spreadsheets, it comes from making smart business decisions. Whether it's evaluating new markets, optimizing the supply chain, or driving customer satisfaction, the real numbers are rooted in strategic business actions. CFOs who understand this are better equipped to influence the overall direction of the company. To truly drive financial results, CFOs need to integrate business strategy into every decision they make. This means going beyond balance sheets and understanding where the business is heading, how it creates value, and what risks it faces. As markets evolve and business models shift, companies need leaders who can connect the dots between strategy, finance, and operations. CFOs who don’t adapt may find themselves struggling to keep up with forward-thinking competitors. By focusing on the bigger picture; business integration, strategy, and value creation, CFOs can unlock new levels of financial performance and growth. The time to act is now. CFOs who embrace this shift will be the ones who not only ensure financial health but also drive the strategic success of their companies. #CFO #CA #ACCA #CPA

This brilliant framework from Nancy Duarte in MIT Sloan Management Review, emphasizes the importance of clarity in the decision-making process for effective leadership. I love this decision-making matrix, which leaders can utilize to ensure clarity about which decisions they need to be involved in and which decisions can be delegated to their direct reports. 📍Decide without me. You can empower your direct reports to make most decisions that fall within their realm of responsibility. This covers tasks like executing strategies, hiring, and managing their departments. As a leader you should guide the overall mission but refrain from micromanaging the journey. 📍Inform on progress. Some matters are not for immediate decisions but valuable for leaders to be informed about. These could be high-risk initiatives, budgetary issues, or any project the leader is interested in. You must differentiate between being informed and weighing in on such matters. 📍Propose for approval. This entails decisions that diverge from the predetermined strategy or budget and require leaders' approval. These could be unplanned spending, significant policy changes, or sudden opportunities. Depending on the gravity, these can be addressed through a few slides or require a more detailed discussion. 📍Escalate immediately. Decisions in this category involve high risks or rewards. They could pertain to threats to the strategic plan, market shifts, data security threats, or unforeseen acquisition chances. By utilizing such a matrix, we can foster clearer communication, create distinct boundaries for decision-making, and promote accountability for our teams. Also, classifying decisions into clear categories like those allow you to streamline the decision-making process and ensure everyone knows their roles. Quarterly discussions about the decision matrix with our teams, would keep everyone aligned and ensure tasks are performed effectively. And let's remember our part, we should also actively seek feedback from our teams. The link to the full article is in the comments. 👇 #ecommert #strategy #futureofwork #management #leadership

Jeff Bezos taught me that the best leaders don’t wait to have 100% of the data to make decisions. That either takes too long or is impossible. Data and research don’t deliver decisions—good decisions are the products of good judgment. Jeff said it is best to make decisions with ~70% of the data needed, otherwise you have waited too long. What I see in a lot of organizations is that there is a deep craving for a process, research plan, or data analysis method that gives clear direction. Basically, people want the model, the formula, or the single number that gives them the answers to “the test.” I’m not a psychologist, so I can only speculate as to the root of this behavior, but it could be the need for external validation in order to lower the perceived risk and accountability for the outcomes. As the company grows, so does the scale and the stakes of decisions, so decision-makers become more cautious. The result in mature companies is often the false idea that if we deploy a robust enough analysis, process, or the gather the perfect dataset, the answer will reveal itself. But that’s the thing—it won’t. As I regularly advise executive leaders, analysis, data and processes are tools for better decision making… they don’t provide answers. Great leaders are great decision makers. They become great through the combination of: 1) Experience 2) Understanding business history 3) Building a great leadership team 4) Operational excellence (e.g. rigorous processes and analysis methods). No tool, metric, or strategy document will remove the need for judgment and ownership. Models can help us think, but we are the ones who ultimately have to decide. People want to believe there’s a formula that will make their decisions easy. But leadership is a game of judgment. Data-based judgment, yes—but judgment nonetheless, and the willingness to take responsibility for the outcome. Leaders make decisions. They don’t wait for them to become obvious. What do you think??