We all have come across the classic adage in some form or manner: The quality of the information at hand determines the quality of our decisions. Advancements in technology and connectivity have levelled the playing field for companies and organisations in their quest for gathering information. Great companies differentiate themselves from the rest through their ability to turn information into information that cannot be ignored.
In any decision situation, the amount of relevant information available is inversely proportional to the importance of the decision - Paul Dickson, writer.
If we break the process of decision-making into its simplest form, it is a two-stage process: The first stage is gathering the right information, the second stage is what you do with that information. The right decisions reveal themselves when you start with an honest and diligent effort to determine the truth of your situation. How to ensure we have the 'right' information before making a decision?
This article inspired by Jim Collins’s book, Good to Great, intends to create an environment where individual viewpoints are shared and the truth is heard. These best practices may prove beneficial to you and your organization.
1. Lead with questions, not answers
Leadership does not mean coming up with all the answers and then motivating your team to follow them. It means having the humility to accept that you do not possess complete understanding of all the answers and then asking questions that lead to the best possible insights.
Asking questions unlocks learning and improves interpersonal bonding. Informal meetings with groups of managers and employees that begin with questions like “Can you help me understand?” and “What should we be worried about?” can become a forum where current realities are exposed. Good questions are worded in a way that cause the other person to start talking – not just answering.
"Seek first to understand, then to be understood", Dr. Stephen R. Covey, author of The 7 Habits of Highly Effective People.
Questions and thoughtful answers foster smoother and more-effective interactions, they strengthen rapport and trust, and lead groups toward discovery.
Nucor transformed itself from a company without culture and direction in 1965 to being one of the best-run steel companies in the US and the twelfth largest steel-producing company in the world by getting the right people on board and using debate to evolve the company’s strategy.
3. Conduct autopsies without blame
The cigarette company Phillip Morris brought the 7UP brand in 1978 for $520 million as an entry point into the soft drink business. Strong competition from Coca-Cola and Pepsi eventually forced the company to sell the 7UP brand at a huge loss in 1984. Phillip Morris executives openly discussed the entire situation, looking for reasons for the failure instead of scapegoats to blame. The then CEO Joe Cullman, in his book I’m a Lucky Guy, implied that he should have listened better to the people who challenged his decision to buy 7UP in the first place.
In an era when leaders go to great lengths to preserve the image of their own track record – stepping forth to claim credit about how they were visionary when their colleagues were not, but finding others to blame when their decisions go awry – leaders like Joe Cullman set a refreshing tone: “I will take responsibility for this bad decision. But we will all take responsibility for extracting the maximum learning from the tuition we’ve paid." Conducting autopsies without blame goes a long way in creating an environment where the truth is heard.
4. Build “red flag” mechanisms
Bruce Woolpert, CEO of Graniterock, a constructions product company instituted a “short pay” policy to understand their customers’ perception of quality. It gave customers full discretionary power to decide whether and how much to pay on an invoice based upon their own subjective evaluation of how satisfied they feel with a product or service. Customers does not need to return the product or call Graniterock for permission. They simply circle the offending item on the invoice, deducts it from the total and send a cheque for the balance.
“You can get a lot of information from customer surveys, but there are always ways of explaining away the data. With short pay, you absolutely have to pay attention to the data. You don’t know that a customer is upset until you lose that customer entirely. Short pay acts as an early warning system that forces us to adjust quickly, long before we would lose that customer.”
Do you see potential for implementing any of these practices within your organization? Keep in mind that a process or methodology which suits one organization may not necessarily apply to another. An organization’s ability to adapt to the dynamic environment within which it operate determines its survival and ensures its future success. Therefore, the importance of the right information to support business decisions cannot be overstated. Once you have equipped the right people in your organization with the right information, setting your goals and strategies comes naturally.