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Rewiring the corporate brain

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Faced with a number of seismic digital shifts, organisations need to rethink how they approach
#Digital strategic decision making if they want to break with the past
Digital leaders built for fast decisions
Digital leaders built for fast decisions
Five digital shifts are changing the landscape of business, impacting both strategic and operational decisions. To
Five digital shifts are changing the landscape of business, impacting both strategic and operational decisions. To respond quickly and
respond
dynamically, quicklyneed
organisations and dynamically,
to tap into theorganisations need
collective voices to tap
of their into the collective
stakeholders, harnessingvoices of their
the power stakeholders,
of digital to ensure harnessing
the right
information reaches thethe right people at the right time.
power of digital to ensure the right information reaches the right people at the right time.
IN 30 SECONDS Intelligence everywhere
Smart analytics creates an unprecedented data trove, enabling and
•F
 ive concurrent, digital shifts are empowering everyone in the value chain.

transforming the business scene:


The rise of the machine
intelligence everywhere, increased Physical objects are increasingly Trust is the new currency
connectivity and autonomy of connected and autonomous, with the In the new economy, organisations
objects, accelerating impact of Internet of Things (IoT) operating at
both large and very small scale,
that place trust in technology gain
a potential competitive advantage.
technology, rise of the platform catalysing new services and But to succeed, they also need to
economy, increasing dependency operational improvements. engender trust as a cornerstone of
their values.
on trust The inside-out workforce
Meanwhile, broadening access to
• Whilst organisations want to adapt, technology is catalysing a fluid
workforce with higher expectations
they are often hampered by their and questioning the very idea of the
own complexity and traditions traditional corporation.
Faster and more
intelligent
•N
 ew research suggests that in order From value chains to the village decision-making
to make faster, better decisions in The world of business is becoming a environment
global village, as the platform-based
the digital age, senior executives economy creates new opportunities
Today’s volatile business
landscape creates new,
should be moving from unilateral, for companies to work with suppliers and
Digital, analytical
environment but sometimes transient
command and control models, to engage with customers. opportunities

collaborative decisions by empower- Digital leadership


ing stakeholders with information and information
excellence

Empowering
stakeholders Decision process
for the digital age
W hat happened at Volkswagen?
What chain of events led to ‘A fast decision is often better than no decision. Since no decision leads to delays
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the collapse in share price by 40%, or unwanted results. No decision therefore is also a decision but it’s passive
the resignation of its CEO and the and with high risk!’ – THOMAS LÜNENDONK, JULY 20151
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irreparable damage to the company’s


reputation? With the dust still settling
#Digital on one of the biggest corporate
scandals in recent years, its causes
the report3 into the company’s 2015
accounting scandal, also resulting in a
Rooted in the accelerating spread of
technology, the digital wave is creating
remain obscured by the sheer size and CEO resignation. as many opportunities as risks, driving
Introduction complexity of the organisation. a need for faster decision making as
Volkswagen and Toshiba are just two organisations look to benefit from all-too-
Staff and customers Whilst we may never get to the bottom more cases in a series of mega-failures, brief market advantage. Writes4 Rita
of it, observers are clear on the drivers. their causes obscured by complexity but Gunther McGrath, professor at Columbia
should be directly involved
Investigations will lead to ‘another case their effects linked to failures to respond Business School5, ‘Transient-advantage
in decisions
study in the annals of bad decision to the changing context within which they leaders recognise the need for speed.
making,’ believes2 Fortune’s Ryan operate. A number of technological shifts Fast and roughly right decision making
Information needs to be Derousseau. Volkswagen isn’t alone: pick have catalysed a business landscape will replace deliberations that are precise
accessible to all stakeholders any recent corporate disaster and you where such failures are not tolerated for but slow.’
will find a similar story. ‘Toshiba had a long, even as it transforms the business
Leaders need to drive digitally corporate culture in which management models and operational processes upon
enabled decisions decisions could not be challenged,’ said which companies depend.

Stop deciding unilaterally, start


enabling decisions to happen A number of technological shifts have catalysed a business
Key takeaways
landscape where such failures are not tolerated for long, even
as it transforms the business models and operational processes
About the author upon which companies depend

The psychology of decision making

Methodology

Notes and bibliography


Having carried out some research to Time is not on any organisation’s side. Strategic decisions are over
understand decision making better, we Whereas industries once changed slowly,
1.3x as likely to lead to good
3

have found that many firms struggle the digital wave has first impacted
over complex structures, systems and more susceptible sectors (taking down outcomes if a number of
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processes. Respondents were 2.0x as Kodak, Borders, Blockbuster and others) inter-related elements are in
likely to think that new market entrants and is continuing its relentless progress place
#Digital and more agile competitors using digital
technologies are a significant threat, even
into previously immune verticals such
as financial services, automotive
as they recognise time is not on their side and healthcare. A key element of an Using the BearingPoint Hypercube
Introduction (figure 1). And inevitably, bigger (and organisation’s strategic response, clearly, smart analytics solution we found that
therefore more complex) companies have is to make better, faster decisions that strategic decisions are over 1.3x as likely
Staff and customers less efficient decision processes – ‘too big will stand the test of time. But how can to lead to good outcomes if a number of
should be directly involved to fail’ can become ‘too slow to succeed’. this outcome be achieved, given just inter-related elements are in place. Top
in decisions how complex and downright opaque of the list, according to our research, is
organisations are today? empowerment.
Information needs to be
accessible to all stakeholders
Figure 1: Size and complexity are hindering good decisions
Leaders need to drive digitally Left: Respondents’ company size and the likelihood of making poor decisions
Left: Respondents’ company size and the likelihood of making poor decisions
Right: Respondents’ report impediments asssociated with strategic decision-making
enabled decisions Right: Respondents’ report impediments asssociated with strategic decision-making

Stop deciding unilaterally, start


0.9x
enabling decisions to happen decision-making process

Under 999
66% heavily dependent on other
decisions
Key takeaways employees
1.0x
Poor decisions 1.2x more likely in large companies decision-making process
About the author as compared with smaller companies
47% subject to significant
compliance constraints
1.1x
1,000-9,999 and / or industry
The psychology of decision making employees regulation

Methodology 1.2x
46% decision made under
10,000-99,999 significant time pressure
employees
Notes and bibliography Over 100,000
employees
Source: BearingPoint Institute survey, 2015
Staff and customers Significantly, different types of decision One in three marketing
can be seen to benefit from involving decisions met their
should be directly
4

different stakeholder groups. In general


expectations if customers
involved in decisions terms, while the bulk of decisions
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involved only senior executives, decision were involved, compared to

#Digital H uman involvement in decisions


is fundamental to both driving
strategic insights and steering
processes were 2.2x as likely to be
effective when all levels of staff were
involved.
one in five where they were
not
day-to-day priorities. In our research,
Introduction when we looked at behavioural factors, Where decisions have an impact
we found that 60% of decisions were on specific stakeholder groups, it compared to one in five where they were
Staff and customers influenced by people who provided becomes fundamental to involve those not. Overall, whilst only 8% of decisions
should be directly involved information, even if they were not direct groups in the decision. For example, directly involved the customer, 49%
participants in the decision process. This from the research we see that one in of decisions where expectations were
in decisions
increased to 71% when high levels of three marketing decisions met their exceeded directly involved customers in
business risk were a factor. expectations if customers were involved, the process (figure 2).
Information needs to be
accessible to all stakeholders

Leaders need to drive digitally Figure 2: Better decisions involve customers, staff on other stakeholders
Figure 2: Better decisions involve customers, staff and other stakeholders
enabled decisions Left: Correlation between degree of staff involvement and quality of decision process
Right: Correlation between customerLeft: Correlation and
involvement between degree
quality of of staff involvement
decision outcomeand quality of decision process
Right: Correlation between customer involvement and quality of decision outcome
Stop deciding unilaterally, start
enabling decisions to happen More likely 2.5x
to make a

Key takeaways
good
decision
2.2x
About the author
1.0x 1.0x 1.1x
The psychology of decision making
0.5x
Methodology

Notes and bibliography

Staff directly Staff Staff not Staff provided Customers Customers


involved in the influenced involved information not involved involved
decision the decision Source: BearingPoint Institute survey, 2015
The link to today’s increasingly
collaborative business landscape could
Information needs was immediately available, for example
(figure 3). And a good decision-making
to be accessible to all
5

not be more clear. As information sources process is over 2.0x as likely to have used
diversify and extend beyond company
stakeholders digitally accessible information.
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boundaries, so must the pool of people

F
involved in deriving insights, not as passive or improved decision-making, the Given how many business decisions rely

#Digital sources but as active participants in


achieving a shared goal. ‘Think tribes as
research tells us information needs to
be immediately and digitally accessible,
on gaining even the smallest advantage
over the competition, this finding is highly
well as teams,’ explains Forrester’s Allegra reliable and of high quality. significant. Says Sir Clive Woodward,
Introduction Burnette. ‘Teams come together to win; who pioneered the use of data in sports
tribes come together around common A significantly higher proportion of science in 2003, ‘Whoever wins in
Staff and customers beliefs and work as a team for the interest decisions – 28% compared to 18% – had information technology tends to win.’7
of the whole community.’6 their goals exceeded when information
should be directly involved
in decisions

Information needs to be
accessible to all stakeholders

Leaders need to drive digitally Figure 3: Good decisions are driven


Figure by speed
3: Process and information
improvements accessibility
are driven by speed and information accessibility
enabled decisions Correlations between companies reporting a good decision process and respondents agreeing with the statements below
Correlations between companies reporting a good decision process and respondents agreeing with the statements below

Stop deciding unilaterally, start Bad decision process Good decision process
enabling decisions to happen Slow; lack of top-level commitment, informal; Information was Fast; had top-level commitment;
lacked workflow application/tool; immediately formal processes in place;
1.5
few alternative options considered; x used workflow application/tool;
Key takeaways complicated decision 1.3
x accessible
considered alternative options;
straightforward decision
About the author
Information
accessed
The psychology of decision making digitally

Decision speed
Methodology measured in days,
rather than weeks or
months
Notes and bibliography

Source: BearingPoint Institute survey, 2015


2.3x
In the digitally enabled world, 2.3x more likely to have used digitally From the research we can see
organisations need to take into account accessible information, such as via portals that a good decision-making
6

an increasingly diverse and complex or reporting systems. Similarly, a good


range of information inputs, driving outcome is 1.8x more likely when the process is 1.5x more likely to
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the need for a well-architected digital information needed to make a decsion include immediately
platform. From the research we can see was totally automated. And, as shown accessible information
#Digital that a good decision-making process is
1.5x more likely to include immediately
in figure 4, decisions using algorithms to
analyse data and deliver insights were
accessible information; indeed, it is 2.8x as likely to yield better outcomes.
Introduction

Staff and customers


should be directly involved
in decisions
Figure 4: Decision processes based on algorithms are more effective
Information needs to be Relative influence of digital technologies on5:quality
Figure of decision
Decision process
processes based on algorithms are more effective
accessible to all stakeholders Relative influence of digital technologies on quality of decision process

Leaders need to drive digitally 2.8x

Times more likely to have a ‘good process’


enabled decisions Algorithms
Sensor data
Stop deciding unilaterally, start Average
enabling decisions to happen Big data
1.8x

Crowdsourcing data
Key takeaways

About the author

The psychology of decision making


Negative influence Positive influence
Methodology
Source: BearingPoint Institute survey, 2015
Notes and bibliography
Leaders need to drive For example, of those respondents
achieving better outcomes, 45% have
may be transient – for example, a CDO or
digital-specific KPIs may not be necessary
digitally enabled
7

already changed their business processes in organisations that have already


decisions and systems to support better decision embraced digital capabilities.
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making. In addition, whilst up to 55%

#Digital T o many organisations, empowering


stakeholders by giving them the right
information at the right time is going
of companies had no plans to invest in
digital, companies with good decision
processes are 2.3x more likely to have
to raise a number of challenges. As we recruited a Chief Digital Officer (figure 5).
Introduction covered at the start of this paper, no
business is operating in a vacuum with Other factors, such as using key
Staff and customers unlimited resources. However, some performance indicators (KPIs) to
organisations are taking the bull by the assess how well digital tools are being
should be directly involved
horns and recognising the importance of implemented, are at least 1.3x more likely
in decisions
improving their capabilities. to be in place. Note that such factors

Information needs to be
accessible to all stakeholders
Figure 5: Digitally-enabled decision processes need to be driven proactively
Leaders need to drive digitally Figure 4: Digitally-enabled decision processes need to be driven proactively
Correlation between quality of decision process and planned/deployed digital business initiatives
enabled decisions Correlation between quality of decision process and planned/deployed digital business initiatives

Stop deciding unilaterally, start


enabling decisions to happen Budget planned
Deploy a service-based
digital platform
Key takeaways Already deployed

About the author 1.6x


1.4x Recruit a
Chief Digital Officer
The psychology of decision making
Create KPIs to monitor 1.3x 1.4x
Methodology the impact of digital

Notes and bibliography


Organisations with good decision 2.3x
1.4x
processes in place are more likely to be
planning or deploying digital initiatives
Source: BearingPoint Institute survey, 2015
Certain industries appear better at Ultimately, in today’s fast-moving
creating enabling environments business context, the main crime any
8

for good decision making, not least company can commit is to act as if
utilities – which has a higher level of nothing is happening, or to merely
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senior executive support than other tinker at the edges of ‘transformation’


industries (figure 6). Meanwhile the without making the deep changes that
#Digital communications and media industries
appear to have a head start on other
are actually required. To paraphrase
an old joke, for change to happen, the
sectors in regard to agile methodologies organisation itself has to want to change
Introduction and the use of KPIs. – from the front lines to the very top of
the hierarchy.
Staff and customers
should be directly involved
in decisions
Figure 6: Certain industries are better at creating enabling environments
Information needs to be Relationship between industry verticalFigure 6: Certain
and likelihood of industries are better
having enabling at creating
environment enabling environments
for decision-making
accessible to all stakeholders Relationship between industry vertical and likelihood of having enabling environment for decision-making

Leaders need to drive digitally


enabled decisions Communications 1.1x
Financial services 1.3x
Life sciences 0.8x
Stop deciding unilaterally, start Manufacturing 0.5x
Other 1.0x
enabling decisions to happen Public services 1.3x
Retail 0.9x
Utilities 1.7x
Key takeaways

About the author Less likely More likely


Likelihood of having an enabling
environment
The psychology of decision making

Methodology

Notes and bibliography Source: BearingPoint Institute survey, 2015


Stop deciding Today’s volatile business landscape
creates a transience of opportunity
In the future, no room exists
unilaterally, start for opaque decision-making
9

and of insight that cannot be met by


structures which seek to
enabling good making decisions in isolation. A better
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alternative, indeed the only one, is to protect senior management


decisions to happen stop making decisions unilaterally, and rather than enable the
#Digital
E
start enabling decisions to happen – business
ven as the world becomes more
by listening first, then acting fast. ‘We
complex, the answer is simple. Future
are perpetually listening and watching In the future, no room exists for opaque
Introduction decision-making success will be defined
what’s happening out there, and we are decision-making structures that seek
through harnessing the skills, insights
testing a lot of things,’ says Lubomira to protect senior management rather
and experiences of an increasingly
Staff and customers Rochet, CDO at beauty products than to enable the business. Change
broad and diverse ecosystem. There is
should be directly involved company L’Oréal, which is pioneering this can only come from the top: for efforts
no going back to traditional, command
in decisions new way of thinking strategically8. across the organisation to bear fruit, the
and control: the future will be defined
leadership team needs to fully embrace
by those who rethink their strategic Other firms such as GE and UK retailer the collaborative, information-enabled
Information needs to be decision-making approaches to John Lewis have also proved they can be future, and so create the enabling culture
accessible to all stakeholders engage with the collective voices of just as innovative as start-ups, if they act their organisation needs to thrive.
their stakeholders, both internally and in harmony with the ecosystem rather
Leaders need to drive digitally externally. than fighting against it. Such companies As writes Isaac Getz, co-author of
enabled decisions recognise the need for fast, reliable the book Freedom, Inc on the skills
For Volkswagen this knowledge may
decision processes that take into account required for future leaders, ‘We did
have come too late: interestingly, in the
Stop deciding unilaterally, start digitally enabled information flows, find three distinguishing character and
company’s new drive for transparency,
enabling decisions to happen which put the right information into the psychological traits: egalitarian value
it has extended an amnesty across the
hands of customers and staff, partners – respect, dignity, consideration, trust,
organisation such that staff could speak
and suppliers and delivers insights fairness and equity; creativity – an ability
Key takeaways out without fear of dismissal. Even as
stakeholders need to contribute at a to redefine problems; and wisdom –
traditional organisations fear opening up
strategic level. holistic and thinking style.’
About the author in case they release some competitive
advantage, new upstarts throw caution
The psychology of decision making to the wind in the understanding it is
speed, not secrecy, that holds the key.
Methodology
Future decision-making success will be defined through
Notes and bibliography harnessing the skills, insights and experiences of an
increasingly broad and diverse ecosystem
The need for a strong, experienced,
visionary corporate brain does not KEY TAKEAWAYS
10

diminish, but it needs to be tightly Hypotheses on which this paper is based:


integrated with the ecosystem within
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which it participates – engaging as a • Multiple digital shifts are acting in tandem to have an
peer, not making pronouncements like unprecedented impact
#Digital some disengaged dictator. • Empowerment of staff, customers and other stakeholders should be
the focus of any business looking to improve its decision-making
To this end organisations can take • Digital technologies are enablers of significantly better business
Introduction actions such as: decision making
• Implementing a data lab, so • Becoming smarter requires a significant change in mindsets,
Staff and customers that the firm has state of the art structures and skills.
should be directly involved analytical capabilities that deliver Conclusion: Embracing digital technology, in an actionable way, leads
in decisions the right information to the right to improved decision making. To achieve this, there needs to be a
people. breakthrough in thinking from the top of the organisation.
Information needs to be • Adopting experimentation-based
accessible to all stakeholders approaches, as every business
has different needs – building Achieving these changes in thinking
Leaders need to drive digitally experience of what works should be are not for the many, but for the
enabled decisions a higher priority than assuring the few who want not only to ride, but
ROI of each initiative. become part of the digital wave. The
Stop deciding unilaterally, start • Institutionalising co-creative alternative is a continued disconnect
enabling decisions to happen activities, expanding their scope from an increasingly integrated, dynamic
beyond product development to world, leaving the organisation on an
Key takeaways decision making across the board. accelerating slide towards oblivion.

About the author

The psychology of decision making

Methodology

Notes and bibliography


About the author
11
TRENDS

Eric Falque Project team


Regional leader France & Benelux, Ludovic Leforestier and Sharon Springell from
BearingPoint, Paris the BearingPoint Institute, Jon Collins from
#Digital InterOrbis.
Eric is a member of the Global Management
Committee at BearingPoint and regional leader Acknowledgements
Introduction for France & Benelux, responsible for client
relations, service lines and industries as well as The author would like to thank Erik Campanini,
Staff and customers profitable and sustainable growth for this region. Angus Ward, Damien Palacci, Caroline Viarouge,
should be directly involved He has more than 20 years’ experience in Digital Matthew Hoffbrand, Jonathan Stephens, Tanja
in decisions Marketing, Sales & Customer management, Schwarz and Simon Torrance from BearingPoint
both playing a role in worldwide firm and Paul Hagen from WestMonroePartners for
management and working for global accounts. their analysis and insights. The author would
Information needs to be
He has led various projects in the manufacturing, also like to thank Angelique Tourneux from
accessible to all stakeholders BearingPoint, Michael Agar from Agar Design
media, utilities, telecoms, services, retail and
automotive industries in the areas of customer and Chris Norris from CopyGhosting as well as
Leaders need to drive digitally Prof. Jonathan Freeman from i2 media research /
and relationship marketing strategy. Eric has
enabled decisions Goldsmiths University of London.
co-created a Business Award (Podium de
la Relation Client), the results of which are
Stop deciding unilaterally, start eagerly awaited every year by the largest
enabling decisions to happen French firms. Furthermore he has co-written a
book – Addressing customer paradoxes in the
Key takeaways digital world – as well as contributing to several
BearingPoint Institute papers in the past.
About the author
eric.falque@bearingpointinstitute.com
The psychology of decision making

Methodology

Notes and bibliography


LESSONS FROM PSYCHOLOGY ON DECISION-MAKING
12

Are decisions always rational? The group nature of most organisational A typology of organisational
TRENDS

psychology literature says not: emotion decision making. In this context, an decisions
and social influence often get in the way. understanding of social influence
i2 media research, led by Professor
(conformity, compliance, obedience),
#Digital Academic and applied psychologists
have long studied the processes and
group dynamics, and the composition
Jonathan Freeman, has developed a
model of behaviour that has been applied
of a decision-making team is essential.
mechanisms of decision-making on in relation to search behaviours, and is
Effective organisational decision-making
Introduction an individual and group basis, defining processes work best when risks arising
applicable to understanding decision
decision making as the process by which making. The model makes explicit two
from potential sources of social bias are
Staff and customers individuals identify an option from an dimensions – the time pressure under
actively managed. How? Through open,
should be directly involved array of alternatives after the evaluation which a decision is needed, and the
transparent processes so all ideas are
in decisions of possible outcomes (Wang and Ruhe, granularity (and scope) of the decision.
considered. And safe, privacy-maintaining
2007). Mapping these out produces four
mechanisms so that uncomfortable facts
quadrants, which describe types of
Information needs to be are considered and not avoided.
organisational decision.
accessible to all stakeholders Decisions are not ‘rational’
Originally, decision making was identified Good decisions flow from well- As reported in the main text, decisions
Leaders need to drive digitally as a rational process whereby the defined, specific questions made under high time pressure tend to
enabled decisions decision maker(s) carefully evaluates be evaluated as better than decisions
One of the key determinants of the
information – until the concept of made under less time pressure. We have
quality of a decision, and indeed the
‘bounded rationality’ was established, all seen occasions where more drawn out
Stop deciding unilaterally, start mechanism by which the decision is
which highlights that humans have decisions can enable the amplification of
enabling decisions to happen reached, is the character, certainty or
limited resources (time and information) social biases. In these situations, low time
specificity of the question or problem
on which to base decisions. Subsequently, pressure can allow biases to accumulate,
Key takeaways being addressed.
a large body of research focused on
differentiating slower (more methodical) Decision-making diagram
About the author from faster (more instinctive) decision How limited resources such as time and information effect the basis of a decision:

styles, with the latter relying more on


The psychology of decision making implicit and emotional drivers (e.g. Least effort / disruption High-time pressure Emotional

Kahneman and Tversky, 1979). Responsive: Fast and sure:


monitor widely automate to KPIs
Methodology Best enhanced

Organisational decision making by digital

Notes and bibliography is a social process More general More specific

Whilst psychology’s understanding of Least enhanced


by digital
biases and factors affecting individuals’ Longer term:
Comprehensive:
avoid biases
decisions is interesting, when considering strategic

decision making in organisations, even No urgency / inaction Low-time pressure Rational

more important is an awareness of the


with more selective ‘rational’ consideration information to arrive at a decision. Then
13

of information sources – risking giving it’s the turn of executing, evaluating and
greater weight to those sources consistent closing the process.
TRENDS

with incorrect gut feelings or assumptions


of the decision-makers. Indeed, advice on Social decision making has risks specific
to its group nature: irrational decision
#Digital minimising decision biases often focuses
explicitly on decision-making processes in making by the group (groupthink) and
less time pressured contexts. the tendency of individuals in a group
to take extreme positions (polarisation).
Introduction Especially for high time pressure, specific Furthermore, the presence of a strong
decisions, excellent information is clearly majority and social pressure can crush Prof. Jonathan Freeman is a leading
Staff and customers a determinant of good decision making. and silence the contrasting voice of a expert in media and consumer
should be directly involved For information to be excellent, it needs to minority, resulting in the suppression of psychology and human factors of
in decisions be information about something relevant valid dissenting viewpoints. The result? digital media. Taking as his starting
and specific. Digitally accessible, excellent Bad decisions. point fundamental psychology research
Information needs to be quality information has the biggest and methods, he has developed and
impact in specific and time-pressured So what? Decision-making processes in applied a body of knowledge to the
accessible to all stakeholders
decision contexts. High time pressure organisations should explicitly mitigate evaluation and optimisation of digital
decisions without the correct information against the risks inherent to social and traditional media products and
Leaders need to drive digitally decision-making. services, focusing on user experience,
enabled decisions are the highest risk decisions.
effectiveness, accessibility and
So what? For fast-moving business critical So, the quick insights from monetisation.
Stop deciding unilaterally, start decisions, it is essential to have decision- psychology? Jonathan is Professor of Psychology
enabling decisions to happen making processes that are reliant on
instantly available, excellent quality For the best organisational decision- at Goldsmiths University of London in
information. making, time pressure can help, if which role he leads large scale national
Key takeaways
organisational decision-making processes and international multidisciplinary
incorporate excellent information systems projects innovating at the cutting
About the author Manage potential social biases and effective management of potential edge of the intersection between
in organisational decision- social biases. humans and media technology. He is
The psychology of decision making making processes also Managing Director of i2 media
References:
Organisational decision making is an • Wang, Y., & Ruhe, G. (2007). The cognitive process research, as a spin-off company from his
Methodology inherently social process; and social of decision making. Int’l Journal of Cognitive academic research team at Goldsmiths
decision making involves collective Informatics and Natural Intelligence, 1(2), 73-85. University of London.
Notes and bibliography confrontation that can foster creativity, • Kahneman, D., & Tversky, A. (1979). Prospect
knowledge, awareness and lead to theory: An analysis of decision under risk.
inclusive decisions. Pellosniemi, in his book Econometrica, 47, 262-290.
Social Decision Making, describes that the • Pellosniemi, J (2014). Social decision-making:
the introduction, Libris oy, Finland.
decision-making process starts with a draft
and continues with proposing and sharing
METHODOLOGY
14

As part of our review of the current state 29%. As well as painting a picture of Good process: Agree OR Strongly
TRENDS

of strategic decision making, between current practice we wanted to identify agree:


July and August of 2015 we undertook how to enable better strategic decisions,
some primary research into decision- more frequently and with better • There was top level commitment
#Digital making practices across a number of outcomes. • Decision was formal
European countries. 300 senior roles • Decision used workflow
were interviewed from France, Germany In order to qualify answers we used the
application/tool
Introduction following definitions:
and the UK. • Alternatives considered were
Staff and customers In our research we asked about a recent, Good outcome: 100% of outcomes appropriate for decision
strategic decision: 50% of the 300 listed EITHER Exceeded expectations OR • Decision was straightforward
should be directly involved
decisions directly involved the board, Met expectations
in decisions
and the board was consulted in a further
Information needs to be
accessible to all stakeholders
Figure 0: Good decision processes result in good outcomes
Leaders need to drive digitally Good decision processes result in good outcomes
enabled decisions Respondents reporting goodRespondents
decision outcomes
reporting as opposed
good decisionto bad decision
outcomes outcomes
as opposed to badare 1.3x more
decision likely
outcomes areto1.3x
have sound decision
more
processes in place likely to have sound decision processes in place

Stop deciding unilaterally, start


enabling decisions to happen 1.3x

Key takeaways

About the author

The psychology of decision making Bad Good


decision decision
processes processes
Methodology

Notes and bibliography

Source: BearingPoint Institute survey, 2015


Notes and Bibliography
15

1. Trends und themen, Lünendonk, Mindleheim, Germany, web, PDF, Thomas Lünendonk, 07/15, http://bit.ly/LDonkTrends
2. ‘The four horsemen of bad decision making’, Fortune, New York, NY, USA, web, Ryan Derousseau, 28/10/15, http://bit.ly/Fortune4Horse
TRENDS

3. ‘Toshiba just lost its CEO to a huge accounting scandal’, Fortune, New York, NY, USA, web, Geoffrey Smith, 21/07/15, http://bit.ly/FortuneTosh
4. ‘Transient advantage’ Harvard Business Review, Boston, MA, USA, web, Rita Gunther McGrath, 06/13, http://bit.ly/HBRTransAdv

#Digital 5.
6.
‘How to live with risks’, Harvard Business Review, Boston, MA, USA, web, editorial, 07-08/15, http://bit.ly/HBRRisks
‘Brief: Staffing For Data-Driven Design’, Forrester Research, US, web, Allegra Burnette http://bit.ly/1QDrMOL
7. ‘Sir Clive Woodward: “Understanding digital data is key”’, The Telegraph, London, UK, web, Oliver Pickup, 09/07/15, http://bit.ly/TelSirCW
Introduction 8. ‘L’Oreal: How technology is transforming beauty’ The Telegraph, London, UK, web, Sophie Curtis, 18/07/15, http://bit.ly/1I5YXI1
• ‘The onrushing wave’, The Economist, London, UK, web, editorial, 18/01/14, http://bit.ly/OnrushWave
Staff and customers
• ‘Home’, Freedom, Inc., USA, web, Brian M Carney and Isaac Getz, http://freedomincbook.com
should be directly involved
• ‘Message not received: why business communication is broken and how to fix it’, Amazon, Seattle, WA, USA, web, Phil Simon, 02/03/15,
in decisions http://bit.ly/AznSimon
• ‘Huit questions sur l’entreprise libérée’, Les Echos, Paris, France, web, Yves Cavaret, 09/04/15, http://bit.ly/Echos8Q
Information needs to be
• ‘The best data storytellers aren’t always the numbers people’, Harvard Business Review, Boston, MA, USA, web, Alexandra Samuel, 28/10/15,
accessible to all stakeholders http://bit.ly/HBRDataStory
• ‘Everyone says they listen to their customers – here’s how to really do it’, Harvard Business Review, Boston, MA, USA, web, Ana Brant,
Leaders need to drive digitally 28/10/15, http://bit.ly/HBRListen
enabled decisions • ‘Observing culture: differences in US-American and German team meeting behaviors’, University of Nebraska Omaha, Omaha, NE, USA, web,
PDF, Nale Lehmann-Willenbrock et al., 08/13, http://bit.ly/UNOObsCulture
Stop deciding unilaterally, start • ‘3 timeless rules for making tough decisions’ Harvard Business Review, Boston, MA, USA, web, Peter Bregman, 02/11/15,
enabling decisions to happen http://bit.ly/HBR3Rules
• ‘The visionary rebuilding GE from scratch to become a digital powerhouse’, The Telegraph, London, UK, web, James Quinn, 03/10/15,
Key takeaways http://bit.ly/TelGE
• ‘Can we design trust between humans and artificial intelligence?’, Fast Company, Harlan, IA, USA, web, Patrick Mankins, 19/06/15,
About the author http://bit.ly/FastcoTrust

The psychology of decision making

Methodology

Notes and bibliography


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