Wharton@Work

June 2015 | 

Make Better Decisions: Concrete Skills That Work

Make Better Decisions: Concrete Skills That Work

As organizations become more complex, so do their decision processes. There are multiple stakeholders to consult who often are separated from each other geographically. And according to Kathy Pearson, a Wharton Senior Fellow at the Leonard Davis Institute of Health Economics, there is increasingly a push for consensus. “I am seeing this more often, and sometimes what it means is ‘we don’t make decisions.’ Trying to reach a consensus when you have a number of stakeholders just slows down, or stops, the whole process.”

Pearson says adding uncertainty to the mix can delay the process further, as stakeholders wait until they have “enough” information. The learning director of The Strategic Decision-Making Mindset explains, “This is a new emphasis in the program. Over the past few years, many of our participants have been challenged with making decisions under uncertainty. We take different perspectives on the issue, including how to understand the role that chance plays in decision outcomes, and the individual biases that can make dealing with uncertainty even more difficult.”

She explains that in this era of big data, there is a real paradox. “You have a lot of information at your disposal, but because of uncertainty there will always be much that we don’t know. You need an approach that doesn’t bring the decision process to a standstill. In an uncertain environment, if you wait until you are completely certain, no decisions will get made. Or by the time they are made, it will be too late. Making timely decisions is a very concrete skill, and we teach actions that you can start using when you get back to work.”

Another key lesson in the four-day program is that decisions made by heterogeneous groups, based on input from people who don’t think alike, are of a higher quality that those made by homogeneous ones. But with a larger, diverse group, how do you avoid the consensus approach and make decisions in a timely, effective way? “You need to be explicit about decision rights,” says Pearson. “Who will make the final decision, and when will she or he make it? You can choose a different person each time, or a small group — but you have to state it clearly. Decision rights are a tool. In whatever part of the organization you can control, use it. Establish the rights early to give you time to get input, realizing you can’t keep getting it forever. There is a firm date when the decision will be made.”

The Strategic Decision-Making Mindset offers executives a four-day immersion into a process that many find challenging, and it provides concrete tools and approaches, such as decision rights and strategic agility, that can be applied immediately. Jay Sashti, a vice president at JPMorgan Chase & Co., says, “The program is very relevant to what I am doing in my current role. I am responsible for rolling out a global application to U.S. users, and Strategic Decision-Making has helped me to be sure I have identified all components and am considering all aspects prior to making a decision, including the existing user base and how they will be impacted by changes in the next rollout.”

Sashti says attending the program was time well spent, especially in terms of career development. “It offers insights into how to take one or two steps back to analyze a situation, and then structure a decision based on new or changed circumstances. It also offers the opportunity to collaborate with individuals from various industries to gain a different perspective.”