In our recent BearingPoint Institute paper we decided to focus on strategic business decision making in the digital age. Why decision making in particular?
For three reasons:
First, that decision making is often talked about in business circles, but it is poorly understood. Decision making goes to the heart of what business is about. Indeed, making the right decisions at a strategic level could be seen as the most important thing that any business can do.
When it comes to actually defining what it means however, things get harder. It is straightforward to lean on a dictionary definition — "to select a (logical) choice from the available options, considering all the alternatives,” for example.
The second reason is that decision making can be very difficult. So often in practice, the process of ‘selection’ involves multiple discussions and meetings, much head scratching, weighing of probabilities and risks. In other words, it can sometimes be anything but logical. As a consequence, strategic decision making is also fraught with behavioural factors — simply put, all too often the heads of big companies act more on gut feel than on hard data.
The third reason is that decision making is being profoundly influenced by digital technologies. In the digital age we have more information than we know what to do with, coming from an increasingly diverse range of sources – these parallel phenomena are driving a number of distinct shifts. New organisations operate by trusting the information they receive, as much as the expertise and experience of their management teams. Augmented by digital, they are making faster, lower risk decisions, as a result threatening traditional companies across a variety of industry sectors. From our recent research we know that twice as many organisations consider such upstarts to be a threat, as those who don’t. This is driving significant investment in technology, which of course needs to be matched by an impetus to change business models, structures and processes.
So decision making matters more than ever when digital technologies are in the mix, which they will increasingly become. In the digital age, organisations that choose to maintain traditional decision making practices are choosing to bury their heads in the sand of the past
Read here the full report and research findings here.