Tuesday, 2 March 2010

Decision-making perspectives

JUST imagine we are 20,000 feet above the ground and trying to figure out how to reach a certain destination. Chances are we will find it impossible to get the route mapped out, as things will appear very small to the naked eye.



However, we may be able to observe larger areas of land and space, which provide us with better understanding of the overall landscape.

When we are on the ground, everything would be clearer but our vision is limited though it is not blocked by anything in front of us. We may not be able to know that a car is coming from around a sharp corner or a crocodile is waiting to snatch our legs in a beautiful river.

Sometimes, even when things are sharp and clear, we may not be able to see clearly because we have problems with our eyes, being short-sighted or otherwise. This is where visiual aids will be handy.

The situations highlighted above may be similarly applicable in decision making. While not necessarily true all the time, the quality of decisions would be influenced by how the decision makers view facts or information in arriving at the decisions.



Boards, for example, are supposed to chart the strategy for the organisations under their care in ensuring the missions and objectives of the organisations are achieved. This is akin to having a 20,000ft perspective of the landscape.

Management, on the other hand, are operating closer to the ground and should have a clearer view of the realities and what is going on, provided their views are not blocked.

It is the combination of the different perspectives which help the board and management to make strategic and operational decisions. It is important for the management to appreciate the wider perspectives of the board and for the board to be fed with information from the ground to validate their understanding of the landscape. 

What are the possible circumstances where things could go wrong?

First is when boards and management teams are looking at two different directions. While this may sound funny and impossible, it could happen when there is a breakdown in communication between the board and the management.

The risk here is that a board would be fed with information which is out of line from its perspective. This is where it is important for the board members to have the acumen to understand and evaluate the facts and challenge management when they have concerns.

Second, the management could be feeding the board with information which only supports the views of the board while suppressing alternate facts or viewpoints.

This would certainly make the board happy and proceed with whatever decisions which they are pursuing but such happiness would not last when realities start to reveal their true colours. Such situation would normally happen in organisations where rewards and performance are taken lightly. 

Third is where both the board and management fail to appreciate that there are blind spots in their perspectives and fail to detect the changing landscape. Given the dynamic environment in which we are living, the awareness about how much things have changed and would continue to change is really important.

Given that the directors are looking at the bigger picture, their perspectives on issues are wider. They may decide to embark on horse trading in ensuring the best interests of the organisation are served. Failure to understand the perspectives of the board may also result in the decisions being understood differently by other parties, and this could result in implementation failure.

Sometimes decisions need to be made based on certain timelines and all relevant facts and information may not be available. In such circumstances, framing the right questions to be addressed is very critical so that the process of gathering data and information would be more focused and the process could be shortened. Wrong questions would lead to wrong facts being gathered and wrong decisions formulated.

The larger an organisation, the more challenging the decision-making process as more stakeholders would be affected or become involved in the process.

Having specialised committees of the board or management could be one approach to mitigate the risks in making decisions as discussed above. This will enable members with more in-depth knowledge to look at details and review different views. Audit committees and nomination committees are examples of such specialised committees.

We have to remember that life revolves around many decisions that we make every day. The clothes that we wear, the food that we eat, the route that we choose and the movie that we watch are examples of decisions that we make daily in making our lives meaningful.

In any decision that we make, please pause and consider the perspectives from which answers to our problems are being formulated. Hopefully, this step will provide us more insights before the final position is decided.

This article is also published on the Edge Malaysia website here:

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