Why Optimizing Decisions is the Most Important Thing You Can Do, Part II

In our previous post in this series, "Why optimizing decisions is the most important thing you can do," we discussed the reasons why organizations should think hard about focusing on the critical decisions in their organizations, and why the speed and quality of those decisions will determine which organizations remain competitive. Today's discussion outlines our approach to optimizing decision-making in your organization.

Organizations that want to make better decisions, faster should adopt a decision-centric approach to improving business processes and their core capabilities. This approach, which we call Decision-Centric Business Improvement, is a four-step technique that requires the identification of critical capabilities, the description of those capabilities in terms of a process, the isolation of the critical decisions in that process, and the optimization of those decisions. At a high level it looks like this:

1. Identify core capabilities. First and foremost, every organization must understand those very few things at which it must be great. Not just good or very good, but great. Many organizations know what those things are; it might be research and development, it might be sourcing, it might be hiring, or it might be project management. In the diagram above, the circle represents just such a capability.
   


2. Describe it as a process. Second, every capability should be expressed in terms of a process. Whether your process is simple or complex, all have key elements in common, including: tasks, inputs, outputs, and decisions. After you know which capabilities are most important, they should be detailed in a business process that can be decomposed and analyzed.
   
   
3. Identify the important decisions. Third, the organization should highlight and understand the decisions in the processes. Most processes--and all important processes--contain decisions. Those decisions vary in complexity, importance, and frequency, but they are the turning points of every process. In the diagram above, the decisions are indicated as diamonds.
   
   
4. Optimize the critical decisions. Once it's clear where the decisions are in your most important processes, proceed with optimizing the most important decisions (the ones with the biggest impact on the process outcomes). Big Sky advocates evaluating each of these decisions from three angles: strategic relevance, technique, and technology. In other words, "why make the decision," "how to make the decision," and "what do we need to do to enable the decision."
   

Although the scope and duration of these engagements will vary with the size and complexity of the organization, we suggest starting small with a rapid diagnostic using this approach, and then layering on more challenging improvements over multiple project generations.

In our next post in this series, we will outline each of the three "decision angles" mentioned in #4 above.