A630.4.4.RB - How Companies Can Make Better Decisions

Yes, there is a positive correlation high degree of success (relationship between variables) between decision-making effectiveness and financial performance along with employee engagement. Effective decision making and execution enhance competitiveness, value and profits. Effective decisions are important including speed, implementation process and intensity level of the team and plan. Companies have become more complex with the global economy and explosion in technology. Few if any use a standard line and staff of functional organization chart and instead manage and lead by a matrix 360 degree structure. No company can live up to its full potential unless it can decide and deliver. (How Companies Can Make Better Decisions, Faster, 2010)

There are five steps to improve organizational decision-making effectiveness: 1. Score your organization's decision abilities. Determine how well you currently make and execute important decisions. Decision effectiveness is more than just making good decisions. Other criteria include speed, yield and effort. 2. Identify the key decisions and focus on decisions that have the biggest impact. There are usually two categories: 1. major strategic initiatives with financial impacts 2. daily operational procedures processes which contribute a lot of value over time. 3. Make individual decisions work. Use benchmarking, benchmarks and best tools and practices as enablers for decisions. Clearly explain what decision needs to be made, identify roles responsibilities involved, use a structured decision approach and model, and develop a timeline schedule. 4. Build an organization in which all the parts including structures, processes, culture etc. enable effective fast decision making, execution and delivery. Ensure the right people are in pivotal positions for decision-making. Talent and experience matter along with being strong minded, clear thinking and resolute. Leaders should support and confer with each other. 5. Embed decision capabilities by providing people in the organization with the knowledge, skills and abilities along with behaviors of effective decision-making effectiveness. Videotape speeches by leaders and communicate the messages to the workforce to explain new decision initiatives to employees. (How Companies Can Make Better Decisions, Faster, 2010)

What are practical hands-on applications of this and my reflection with example? Boeing CEO Jim McNerney holds top level executive decision-making retreats for direction of the company usually several per year at locations including Seattle, Chicago, Florida or Palm Springs, California. A Boeing spokesman said McNerney wants two such meetings a year rather than one. "It's a good opportunity for Jim McNerney to keep the leadership focused and aligned," the spokesman said. Elements of strategic alignment involve people, incentives, supportive activities, organizational structure, culture, and leadership. Each element is aligned with strategic goals and with each of the other elements, forming a foundation for change implementation and success. Globalization is also a focus of the events. (Boeing, 2015) Boeing's mission, vision, strategies, core competencies and values are additional decision-making ideas for strategic management because an organization’s present situation may rule out in advance and change existing objectives and strategies and can also identify a specific course of action. A structured decision-making approach process is used by executive leadership. Standard models and decision-making tools are used including: SWOT Analysis, Michael Porter Five Forces Analysis, Strategy Maps and Balanced Scorecard. The strategic management decision-making process is dynamic and continuous, i.e., it is constantly changing. A change in any one of the major components of the model can change any or all of the other components. The answer to where an organization is going can be determined by where the organization has been. A change in any of the environmental factors such as economic, technology etc. can change long-term objectives and strategies. Failing to accomplish annual objectives could change policy. Changes in competitor’s strategy, e.g., Airbus could require changes in the organization’s mission. Airbus is a consortium (cartel) of England, France, Germany and Spain and is members of the European Union (EU). Strategy formulation, implementation and evaluation are continuous activities and should not be done just once or several times a year. The strategic management process and decision-making never ends and is continuously changing based on the operating environment. (Boeing, 2015) What are the business results decision effectiveness of this? Boeing is the world's leading aerospace company. The commercial aviation business is booming and growing. Many new and advanced developments, airplanes and technologies (composites etc) including the 787 Dreamliner and 777X are being launched and introduced to customers. New plants are being built, updated and existing ones are being modernized with automation. The financial business results are growing including revenues, profits and stock price. Employee engagement and teaming is enhanced from flow down of decisions resulting in decision-making at the lowest organizational team levels.

References Boeing (2015). [On-Line] Available http://www.boeing.com/boeing/ How Companies Can Make Better Decisions, Faster (2010). [On-Line] Available https://www.youtube.com/watch?v=pbxpg6D4Hk8&feature=player_embedded