What is the future of decision making in business?
Large and small businesses live under the threat of being disrupted due to unwise decision making. Key projects are delayed, innovation postponed or killed before maturing, and new sales channels starve to death due to unappropriated funding, and more. Committees are equivocally used for decision making slowing outcomes; shadowy leaders are ambiguously hired and promoted, brands become fuzzy patchworks, and this list goes on and on. If you have worked for corporations, I am sure you are already mentally adding to the list.
The truth is most of the businesses are populated by smart and well-prepared resources, graduated in the best schools and continuously educated to make wise choices. And most of the wrong decisions are surrounded by managers not supporting them, and yet their voices are rarely heard.
Companies are not prepared to change this reality, and HR professionals in most of the cases have no support to change it either. Here are the primary sources of wrong decision making.
VOICE OF GOD
Egocentric charismatic leaders are a significant source of faulty decision making in larger companies. They can be extremely convincing even if the facts do not support their point of view. Usually, they are surrounded by tens of the "yes man" type, what does not help the process either. In this case, the voice of few is muffled by the "yes man" bunch. In small companies, the owner or founder is usually the top expert and the only one with skin in the game. Therefore, there is a limit to where employees can push back on decisions. For small companies, an impactful wrong decision might be just fatal.
SMALL GROUPS POLITICAL ALIGNMENT
It is not hard to find small groups of professionals aligned around some particular interest. Marketing vs. sales, followers of a charismatic leader vs. another, protectors of an investment line, one department vs. another. Politically aligned groups can create arguments and raise the volume when is the time to debate. They may also cover for each other when is time to explain. In all those cases, decisions are made in favor of a group and not necessarily the best for the company.
TOP DOWN DECISIONS
Wrong decision making does not belong to the middle manager only. Chief Officers also have a limit how much they can push their own beliefs and agenda. The actual impactful decision making in larger companies is done on the board of director’s level. CEOs have a limit to influence those decisions as the board of directors' members represents groups of investors with high authority.
LONG TERM vs. SHORT TERM
Data, analysis and common sense are not the only currency on making decisions. In many cases, decisions are negotiated, and middle ground has to be reached - and that is a significant source of mistakes especially when investment trade-offs have to be made in favor of a short-term P&L or a long-term benefit for the company. Every time there is less room to support long term decisions if that is going to hurt the quarterly P&L. The bottom line pressure is big and potential new businesses are killed just because funds are not allocated at the right time to nurture innovation.
IN A NUT SHELL
Short term favored decisions, political groups aligned with the wrong idea, big ego managers, and board room disputes might lead companies to off target decision making. Thus, it is important to have a look what the future of work looks like and the impact on decision making.
ROBOTS MAY DECIDE BETTER THAN HUMANS
The very first impact is about low-level decision making. I mean every decision making based on data without broad strategic or economic impact. Robots will potentially take over most of them. As soon as we explain AI powered robots how to make those decisions, human decisions will be obsolete. Even areas we thought as private human realms before. A good example is IBM's Watson law. Watson is heading to replace junior associates at scale on a key role, e-discovery, simultaneously adding precision and reducing costs. The rest is simple math. Marketing, sales, legal, planning, finance, HR among other personnel will be no longer demanded at the same pace as today for a company to develop and perform their core business. Big offices, hundreds of employees, and supporting areas are no longer necessary. A significant downsizing, with no help of consultants, will happen in the next decade. As a consequence, we will watch fewer employees involved in those processes, but amazingly productive. No long meetings, no political capital required, no "yes man" groups to perform simple tasks and so the potential for better decision making is higher either by robots or humans.
NEW JOB PROFILE
Most of the tasks in the post 4th industrial revolution "higher educated quadrant" of the jobs spectrum requiring human participation, will be both cross-functional and multidisciplinary. The way people will interact will be collectively based on genuine respect and regard of expertise. New degrees of analysis will be required, and strategic thinking and creativity will rule decision making. The best leaders will be the ones who can get the best out of a team and garnish decisions beautifully for fully informed board rooms and government agents to approve. CEOs will be pushed to be less egocentric and genuinely better leaders, as the impact of their work will be able to be measured in days and not quarters due to big data availability and power analytics tools. Robots will defy our logic, prototype ideas real time, create sales projections, make real time research to help us in our decision process. People will be compensated and promoted by their competence and business impact, and no one will have to fill in HR excel files of little value to the business. When we look back in the future, we will see intelligent robots to business leaders as we see tractors to farmers today. Just progress.
HELP TO BUILD THE FUTURE
Rest no doubt we will go through a phase where the transition to this new scenario will impact us all and how we work. That has been called the 4th industrial revolution. We invest in solutions that will help make people productive in the future. Please join our discussions at collectivebrains.org.
DILBERT © 2015 Scott Adams. Used By permission of ANDREWS MCMEEL
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