By Len Monheit
Examining company and department decision making procedures is an important efficiency exercise, particularly in larger companies that can afford the resources and research to theoretically ‘get it right’. Smaller organizations, typically more entrepreneurial, have the opportunity to be decisive, quicker, yet frequently do not. Is there an ideal process for each size, culture and position on the industry value chain? What will the impact of technology and data overload be?
In the natural and nutritional products industry, we see it all – from smaller companies with single, powerful decision makers, to larger corporations with multiple levels of stakeholders, with extensive research and data available that must be thoroughly analyzed before a decision is made. We see small companies where everyone has an opinion and voice, to larger corporations where the decision making process is centered around the intuitive sense of a sole senior executive, despite corporate checks and balances. And the sheer volume of information is changing behaviors.
One of my colleagues works for a major manufacturer, headquartered in Europe. Many of this company’s decision making procedures are the result of careful examination of millions of dollars of market research and intelligence to selectively grasp those nuggets which support the Marketing V.P’s personal beliefs. Despite a well defined process where insight, research and intelligence is formally presented to senior executives to enable them to make the right decision, much of the time, the process seems to break down when the big picture doesn’t match goals and immediate desires.
Another colleague reported to me a CEO decision she was asked to support, after the fact, by research data. In this case, a marketing decision had already been made, sped by global electronic communication, now to be justified by after the fact intelligence.
And the use (or non-use) of data is only a part of the decision making issue. In some companies, there is no formal process. Here, the rules and criteria change, issue by issue, (not by itself necessarily a bad thing) but what is often a serious challenge for individuals operating in this environment is that they waste time and resources or operate with unclear processes.
And if those at the top of the organization have a reluctance or inability to make a decision, especially when data has been properly accumulated and presented, employee frustration grows and supplier and client relationships become vulnerable. Frequently, the argument for inaction is that the act of making one decision restricts future options and possibilities and places the organization on a less than optimal path. But, often even a bad decision is worse than none at all.
Business decision making has never been as complicated. With so much information available, a complex business environment, competitive global marketplace, changing business practices including business intelligence gathering, companies need to rethink information management and decision making processes. For small to mid-size companies, effective strategies and processes in these areas can provide a significant market advantage.
We’ve already seen several companies in this industry embrace the concept of corporate knowledge-bases, providing field employees, researchers and executives, as well as value chain partners organized materials, references and resources.
Expect this trend to continue. Expect too those companies that provide best access to most critical information (intelligence, financial, marketing, HR) to most individuals to leap to the top of the sector.