As I write this blog on Saturday 1st February, 2020 we were in the very first days of a new political alignment to the country in which I live, my home. Changes that will affect us all for years to come. At 11pm on Friday 31st January 2020 the UK left an association of countries that it has been a member of for nearly half a century. That I feel this is a mistake is no secret. I’ve argued. strongly over the last three years not to go through with that decision.
In business too we often find ourselves having to make decisions that changes our future, sometimes profoundly. In my time as a senior Risk Manager in the UK’s Financial services Sector the consequences of some of the decisions I had to take to mitigate risks in the business could involve many things. Hiring additional people, making others redundant, reshaping the nature of the business by changing processes in order to eliminate risks that the existing methodology created, and much more. Good decision making was always, and remains, critical. That’s a skill that is rarely taught and far less frequently seen.
I think it’s important to talk about the nature of what makes a good decision. When I ask that question of others they often refer to outcomes in their answer. “A good decision is one that gets you the result you wanted”. That would mean making a decision to bet on a horse at 100 to1 would be a good decision of it won, and a bad decision if it lost. I’d say that when the horse wins it’s a lucky decision. A good decision must surely be objectively capable of being ‘good’ long before the outcomes are known.
Many “good” decisions have adverse outcomes. Not because the decision making was poor; more often because of an external and unexpected change after the decision was made. That’s at the heart of risk management too of course. Mitigation is all about taking good decisions to minimise risk, but also knowing how to handle change when it arises.
I believe that good decisions must be robust. They should consider all the identifiable factors and alternatives (including doing nothing). Then that knowledge must be applied with skill, and drawing on experience, with thought to consequences. Finally, there’s a need to both understand and measure the outcome. Perhaps most importantly, no good decision is taken, and then stuck to regardless of what transpires after the decision has been taken.
Working strategically in our businesses we must look, objectively, at the available evidence and the consequences of our intentions to the best of our ability. Then we put in place the right measures and feedback loops to check those changes as they progress. By doing both then our chances of delivering the outcomes we seek increase dramatically. All of that said, if we are constantly watching our markets, speaking to our customers, and developing ourselves, when decisions need to be taken they can be taken quickly, and well.
As a footnote, I would contend was the decision to leave the European Union was never a good one. Information was limited and the question too broad. Consequences were not understood, and the alternatives not explored, either before that binary decision or afterwards. The final destination remains a vague, opaque, moving target.
Do you have business changing decisions to take soon? Are you sure you are considering the right factors, and putting in place the right measures? Are you making the best decision that you can?