Toward Increasing the Probabilities of Successful Executive Decisions: A Check-List
Decision-makers face making good and evidence-based decisions. What they choose must bring positive results. A useful decision will be based on hard criteria for
(1) where the institution is going,
(2) why it is going there,
(3) how it will add value for all stakeholders, and
(4) provide the criteria for both making effective and efficient decisions and for evaluating progress toward one’s selected destinations.
These will also provide the criteria for planning how to achieve the organization’s mission so that financial, human, and physical resources may be properly allocated. Finally it should provide valid data to justify what it uses, does, produces and delivers.
All must be based on solid data and information. Given that we are living in a globalized and ever changing world, another big challenge that face businesses is to respond appropriately to this changes with new solutions that create value. On this environment, the only way to survive is first, creating real value, that means, solve real problems and second, innovate.
On this article, we will offer a guide, first to make sure that the organization is creating real value and second, that is in an environment that allows innovation.
Organizations often falter because decision-makers don’t have all the data required to not only improve the organization but also, and more fundamentally, assure the organization will add current and future value to all stakeholders. The stakeholders also include the society and shared world in which we all live. Not considering this external reality has led to many a failure and the literature is replete with the corpses (cf. Bernardez, M., & Kaufman, R. (May-June 2013), Kaufman, R. (2011), Kaufman, R. (2006:Aug.).
Drucker and Hesselbein (Drucker, P. F. with Collins, J., Kotler, P., Kouzes, J., Rodin, J., Rangan, V. K., and Hesselbein, F. (2008)) provide guidance and tools built from asking and answering the ‘right’ questions for organizational success. They pose five, elegantly clear questions to every enterprise:
What is our mission?
Who is our customer?
What does the customer value?
What are our results?
What is our plan?
In order to be explicit, Kaufman (2017) recommended adding value to all people within and external to the existing organization by adding one more purpose-driven question:
What measurable value will we add to all stakeholders, both internal and external?
The social dimension according with Peter Drucker (1988) in his book The New Realities, emphasis in the system, and that means, that for any business, the social dimension is a survival dimension. If you are not adding value to society, you are subtracting value (Brethower, 2006). The enterprises exist in a complex and changing environment that must constantly be taken into account.
Figure 1: Society
So the challenge for the organizations is not only to respond to the total environment but to create with others their own capacity to solve relevant problems being part of an innovation ecosystem and possible creating new entities. That means that the real challenge for any business is being part of a community where the institutions are willing to collaborate to solve relevant problems by creating social capital linking organizations that work together to solve problems and innovate (Kaufman, Rodriguez and Bernardez, 2011).
Figure 2: Ecosystems
Also there is a process, suggested by Mariano Bernardez (Bernardez, The incubator University, 2009) where businesses can link with universities and other organizations in order to accelerate the process of cration of new products or more sophisticated enterpises.
The following chart shows the value creation process from the ecosystem to the organization (Bernardez, 2008, Volume 1, Number 1)
Figure 3: Value creation process
Successful executive decision-makers formally include societal impact in their planning and decisions. (Rodriquez, 2017). On the following graph, it is presented a model that was implemented iby the Sonora Technological Institute in order to create 4 Innovation Ecosystems and 12 Strategic initiatives that led to the transformation of the southern Sonora region thru the incubation and acceleration of businesses (Rodriguez, 2007)
Figure 4: Innovation ecosystems
Given that the business directors have not only to work within the organization but also with other people outside the organization, the decision making process is complex and requires to be formal and rigorous.
There are several decision-making imperatives, many of which are not included in current and popular approaches. These imperatives include (along with categories to assess one’s current status):
What justification is there for this check list?
Much of this check-list is based on The Assessment Book’s Kaufman ( Guerra-Lopez (2008)) strategic planning[i] and extensive work on strategic thinking and planning in public and private sectors.[ii] It also responds to many legitimate criticisms of conventional strategic planning and resulting decision-making in order to rectify the many flaws in what is often done.[iii]
Problems with most strategic decision-making and planning approaches. Defining and justifying where you are going is a good thing. But, sometimes on the way, things get distorted. Issues include:
Focusing on means, finances, budgets, or human resources first before defining and justifying one’s mission.
Making decision not on what others have done instead of tailoring the plan to institutional internal and external realities.
Not collect performance data on needs-gaps in results—but seeing needs as wants and doing planning on the basis of programs, projects, activities, and funding.
Not relating the decision to the entire value chain that runs from individual contributions, to organizational contributions, to community and societal contributions.
Changing the decision criteria and approach each time there is a change in leadership. If plans and decisions are based first on societal value-added, leadership should put their ‘stamp’ on an institution in terms of how to meet the evidence-based needs.
Selecting programs, projects, activities, human resources without doing costs-consequences assessments.
Substituting political initiatives for actual evidence-based criteria.
Not using this check-list to assure that decisions will be practical, valid, and deliver measurably useful results.
Agile and alert organizations are in a unique position in our societal new realities.
Useful strategic planning and executive decision-making are possible and very valuable.
Those organizations that intend to survive and thrive in today’s realities will realize that their future lies in creating a future with rewards different from the past. Peter Drucker[iv] suggests that the new capitalism is not one of money and things but is of knowledge and ideas. Our new-age organizations have a unique niche to contribute to this new capitalism of the future.