Tag Archives: Decision Making
Senior leaders need to understand the interests and influences of stakeholders before making any key decisions.
It is particularly useful when considering the political implications of introducing or dispensing with a particular product or service, or when heading in a new strategic direction.
Using a 'power vs. interest' matrix, this activity will help a senior team examine the relative power and influence of key stakeholders.
The image below is of Heineken Stakeholders. In 2015, under the guidance of an independent consultancy, Heineken carried out a 5-step stakeholder management process to map stakeholders and define key messages for communication. With each target stakeholder group, they have studied and identified the most efficient modes of engagement. (more…)
Effective business planning will determine what business success looks like and what needs to be done to achieve it.
Once you have a clear plan for your business, you need to look at the numbers to see if your plan will provide the financial results that you want.
This is done by preparing a budget based on your business plan objectives. For example, if you have decided to increase your sales, then this may mean extra staff, stock and/or increased marketing.
You will need to prepare a budget that shows not only increased sales but increased expenses that will be required to achieve the increase in sales.
A budget can form the basis of the financial strategy for your business and help you review and refine your plan of how our goals and objectives will be achieved. A plan of action will guide you and your business activities towards improved business performance.
The benefits of having a financial strategy include:
Clarity on the key drivers of your business – what are the key aspects of your plan that need to be achieved in order for you to reach your expected budget results?
Tools to measure and monitor performance– your budget can include key performance indicators such as minimum monthly sales, maximum level of expenses etc. and you can then measure these against actual results (more…)
Several corporate and system failures and an increasingly complex regulatory environment have sharpened the focus on good governance in recent years.
This report, The Board Perspective: A collection of McKinsey insights focusing on boards of directors, explores what makes boards effective, how they are developed, and how their expectations and responsibilities have increased.
This compilation is split into three main sections:
- The role of the board. Which activities should the board engage in, and how?
- Board structure and foundations. What foundation do you need to deliver on increasing expectations?
- Board effectiveness. How can you increase the overall effectiveness and impact of your board?
This lengthy report – all 227 pages of it - is all about corporate governance and corporate boards of directors in listed corporations.
It has been written for scholars as well as practitioners interested in the international aspects of corporate governance.
Some chapters are particularly of interest to readers who are interested in the practical aspects of corporate governance.
Chapters five and nine concentrate on the role stock exchanges, legislators and institutional investors play in the international corporate governance arena.
Developments in the organization and the composition of boards of directors of listed corporations in the United States, the United Kingdom and the Netherlands are presented in chapters six to eight.
The remaining chapters of this study are of interest to scholars who are interested in conflict and consensus perspectives on corporate governance.
The Ladder of Inference is a model that was first developed by organisational psychologist Chris Argyris in 1992 and later used by Peter Senge in his book, The Fifth Discipline Fieldbook.
The ladder depicts the unconscious thought process that we all go through to get from facts to a decision for action. It attempts to explain how we tend to behave or "jump to conclusions" when faced with a "situation".
- We select 'facts' (although not necessarily consciously) from our data bank of experience, facts, beliefs and
- Once we have selected data, we begin to add meaning to it. We interpret, that is, make assumptions about what we see, hear, read, feel and we impose our own interpretations on the data.
- Then draw our conclusions from We lose sight of how we do this because we do not think about our thinking. The conclusions feel so obvious to us that we see no need to retrace the steps we took from the data we selected to the conclusions we reached.
- Our conclusions become part of our data bank - whether 'true' or distorted, they will influence future thinking.
It’s an inescapable fact: We all have to make decisions. Wouldn’t it be great if we could systemically make better ones?
We all grow up to be decision-makers. Yet somehow there’s no well-established way to make high-stakes decisions well. That’s a problem since throughout life we’re faced with many of them — decisions that will have a long-term impact on our lives, but where the outcome is unknown, and the price for making the wrong decision could be costly.
Imagine if we all learned decision making before turning 18. Is there anything we do more frequently that has higher stakes than making good choices? If we could master decision making, I believe the world might get along just a little bit better, and everyone would live happier lives – and work smarter.
There is a system that can help us solve complex problems, and there is a way to do it that boosts our confidence in our decision-making capabilities and enables us to have the conviction that our solution has a good likelihood of succeeding.
I created one: the AREA Method decision-making system. I initially developed it to help me do better at my work as an investigative journalist. I was searching for a way to better control and counteract my mental biases, those assumptions and judgments that help us every day when making small decisions but that doesn’t go away when we need to solve complex problems. I also wanted to better understand the incentives and motives of the other people I was dealing with. (more…)
All organisations require a level of commercial awareness from their employees because it is an important skill for making good long-term decisions.
The more commercially aware you are, the more likely you will take into consideration all the important factors when selecting one option over another.
Use this self-assessment to gauge your current level of commercial awareness and help highlight the areas where you can improve.
The activity can also be used within a team learning environment.