Creating a Decision-Making Framework for Your Business

Every time someone within an enterprise makes a decision, it represents an opportunity to drive a positive business outcome. Just think about how many decisions, small and large, can happen within a business over the course of a day, or a week, or a month.

Effective decision-making can improve performance, reduce inefficiencies and help companies gain the competitive edge. But the opposite is true for the inability to make effective decisions — enterprises may see their leads squandered, morale weakened and performance tarnished.

Some businesses still treat decisions as standalone occurrences — made by stakeholders in isolated cases with whatever information they have at the time. Others forge an overall decision-making framework capable of supporting any and all future judgements, helping stakeholders land upon the best choice using the resources available.

You can probably guess which method is more sustainable and successful over time.

Here’s more on building a strong framework for organizational decision-making.

Ensure All the Right People Are Involved

If you’ve ever experienced a colleague’s displeasure at being “the last to know” about a decision — or felt the frustration of a leader who believed another stakeholder acted against their input — you know how important it is to involve the right people at the right junctures and supply them with the right information.

According to research from Deloitte, decision-making clarity can double the likelihood of maximizing efficiency by improving processes by double.

Several frameworks have emerged in search of this clarity, like RACI: Responsible, Accountable, Consulted and Informed. Here’s a breakdown of what each of these roles entails:

• Responsible: Who’s doing the work? These stakeholders will be the ones accomplishing the task or making the decision.

• Accountable: Who owns the work? This person or committee must give their approval regarding any decisions made.

• Consulted: People who need to contribute their “two cents” before the decision can be completed and stamped for approval. These stakeholders are actively in the loop.

• Informed: This role requires updates without needing to give direct contributions.

Think of formal decision-making frameworks like RACI as a jumping-off point rather than the be-all-end-all of making choices in the workplace. Why? Because letting rigid frameworks rule can inadvertently lead to decisions lacking in quality and innovation, the latter of which is a major goal of forward-thinking companies today.

The aforementioned types of frameworks are useful in identifying who should take what role in the process, but there’s also the challenge of disseminating relevant information to involved stakeholders in an agile fashion.

Empowering Agile, Data-Driven Decision-Making

As Harvard Business School reports, a survey of 1,000 senior executives found organizations highly driven by data are three times as likely to report “significant improvements” in decision-making, compared to companies that depend on data less.

The rise of data-driven decision making has been fueled by the availability of intuitive, self-service tools widely available to stakeholders at all levels. Instead of having to wait on canned reports — and jumping through hurdles to access siloed information — users of advanced data analytics platforms can ask questions and drill into it on their own terms.

Furthermore, embedded analytics infused into shared portals and business applications allow stakeholders to stay abreast of relevant insights without having to hunt high and low. As we all know, getting everyone on the same page is critical for reaching the best conclusion and getting everyone to sign off on it.

Define a High-Quality Decision

Last but certainly not least importantly, it’s helpful to overtly define what makes a high-quality decision — so employees understand what the framework should produce.

Here are some key elements of the so-called Decision Quality (DQ) process:

• A framework outlining the problem at hand and what needs to be accomplished.
• Information that’s meaningful, unbiased and comprehensive.
• Clear desired outcomes.
• Commitment to action by all necessary stakeholders.

Organizations can use decision frameworks to define who needs to be involved and at what level, as well as what constitutes a valuable decision. Enterprises can also benefit from data-driven decision making when stakeholders are able to incorporate insights into their choices.