Forum Views - July 2023
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Global
FORUM VIEWS - JULY 2023
Decisions: The obvious yet mostly neglected performance
indicator
In today's fast-paced und often highly uncertain business
environment, making effective decisions is crucial for leaders
and their companies to stay competitive. More than a decade
ago, a study by Bain among 800 international companies
showed that the quality of decisions of executives and their
companies' financial results correlate at a 95per cent
confidence level for every country, industry and company size
they studied. What is interesting for any investor is that the
top-quintile companies with respect to the quality of their
decision-making generated on average total shareholder
returns nearly 6 percentage points higher than those of other
companies.
Consequently, financial investors are well-advised that when
they analyze the reorganization plans of CEOs and their
companies, they put much more focus on whether these plans
enable optimal decision-making processes rather than their
impact on classic organizational structures along products or
markets. Since Bain’s original study, more research has
confirmed that any organizational structure or reorganization
can be completely dysfunctional if it is not aligned with the
required decision-making processes on operational, tactical
and strategic levels. But how can you assess a company’s
professional approach to decision-making?
Solid decision-making is a complex process influenced by
various factors, including high-quality information, human
biases, different opinions, and the need for consensus among
decision-makers. Organizations are increasingly turning to the
concept of Decision Intelligence (DI) to navigate these
challenges and improve decision outcomes.
In short, Decision Intelligence is a holistic approach to
decision-making that combines human judgment, big data
analysis, and technological advancements. Companies like
Google, IBM, Deloitte, Cognizant or SatSure recognize the
significance of DI and have incorporated it into their operations
and the solutions for their clients. SatSure, for example,
leverages ‘Decision Intelligence from Space’ to support banks
in India along the entire agriculture loan cycle for farmers or the
planning and financing of infrastructure projects.
Decision Intelligence: The new boy/girl in town
Insights
BETTER PERFORMANCE
WITH THE DECISION INTELLIGENCE CUBE
Dr. Roger Moser
Chairman,
SatSure
Senior Lecturer
Macquarie University
In addition, Gartner Group has recently identified Decision
Intelligence to be at the Innovation Trigger of the Hype Cycle
for Emerging Technologies in Finance. For Gartner, DI is a
practical discipline used to improve decision-making by
explicitly understanding and engineering how decisions are
made, and how outcomes are evaluated, managed and
improved via feedback.
The Decision Intelligence Cube (DI-Cube) is a work-in-progress
concept that we at SatSure have developed when helping
executives and companies to analyze their decision-making
behaviour, attitude, and structures (Exhibit 1). The DI-Cube
consists of three dimensions to understand a company’s
decision-making from a holistic view:
Understanding the decision-making approach of a
company from a holistic perspective: The Decision
Intelligence Cube
Solid decision-making is a complex
process influenced by various factors,
including high-quality information,
human biases, different opinions, and
the need for consensus among
decision-makers. Organizations are
increasingly turning to the concept of
Decision Intelligence (DI) to navigate
these challenges and improve decision
outcomes.
(Sydney, New South Wales, Australia)
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