How COVID-19 Has Changed the Way We Make Decisions
Decision-making will be even more rapid. The speed of decision-making in the corporate world had increased before COVID-19 but this has exacerbated it. I think we’ll stay in this mindset. Uncertainty will remain. And the environment around us is moving faster and some technological changes are happening much more quickly. For example, the banks had been struggling to get elderly people to adopt online banking but now they’re set up online. They’re trialling things that would have taken much longer before.
Decision-making will be smarter. Because of the uncertainty, we’re not using single forecasts, where you pretend you can predict the future. We’re using scenarios – and scenarios of value to make some of the assumptions transparent. You then have a debate and get more robust discussion and better decisions. In general, the use of data – more real-time data and granular data from multiple sources, both internal and external – will change the way decisions are made. In some ways they’ll be more fact-based. You might have some analytics across the top but it’s the mix of machine intelligence and human intelligence that will lead to better decisions.
People will own their decisions. It’ll become more of the norm that we’ll devolve some of the decision-making to the frontline. Time is being compressed, therefore the way to make decisions is to enable the person closest to the action to make them – and to make the majority of them. There’ll always be exceptions but we need to empower people to do the right thing and do it very quickly. But we can’t do it in an uncontrolled way – what are the constraints and what are the objectives? Everyone needs to work towards a common outcome. It’s not one freight tanker but multiple boats that need to go in the same direction. So we need to give them an instrument of navigation, a point they need to get to, guardrails and pointers along the way that say, “This is where you can go and this is where you can’t go.”
People need the right tools to make the right decisions. The data is often only available in the centre. It might not be sufficient and it might not be real-time enough so you need to find ways to bring rich data to the frontline. And you need to change the corporate mindset around what data can be shared. Alot of data needed for decision-making might not be sensitive at all; it might just be data that’s regularly available but not accessible to some of the frontline people. There’s a traditional way of thinking about certain data – such as employees shouldn’t have access – but transparency creates trust.
We’ll feel more comfortable making decisions in uncertainty. If you’ve got good-scenario analysis, for example, you could say, “Okay, here’s a range of possible outcomes. I understand the assumptions, I know what I need to monitor and now I can make a decision that gets me a bit further down the way but it’s not as if this is the final decision. I’ll start monitoring and we’ll have feedback loops in place and if I’m wrong, I can still course-correct.” There’s a mindset change around this. And you need to have the infrastructure in place. It might be daily meetings or it could be dashboards that give you information in real time.
We’ll learn to adopt speed over elegance. We often have a problem, try to think of all the eventualities, align it with everyone and attempt to come out with the perfect answer, the perfect product. I wonder if that’s even possible in today’s world. Speed with the right feedback loops is the correct strategy. It’s saying, “Okay, I’ve got an idea of where I need to go. Let’s produce something in two to three weeks, test it with clients or customers and get some immediate feedback.” If you aim for the elegant solution upfront with very little testing, it’ll be slower and it won’t hit the mark. When you look at a startup compared to a larger company, it has smaller teams and everyone worries about what the consumer wants, what’s feasible from a technology perspective and what’s viable from a business perspective. And they constantly evolve. In a traditional organisation, these things are devolved – market research does that, business writes the business case, they get the requirements document to technology then it develops it. That’s an 18-month process with no feedback loops. The challenge for corporates is to create an environment where they operate like a startup but have a pathway to scale because that’s where the startups often fail. The real opportunity is getting some of these corporate elephants to dance a bit more nimbly without getting rid of some of the guardrails they need in terms of risk and compliance. It’s possible.
Decision-making will be more collaborative. We often ask companies, “What were your best examples of corporate decision-making?” They usually point to a crisis situation, where all the right people were sitting in the room, the information was transparent – often on a physical wall – and they made decisions through collaboration. In the current environment. we’re replicating that with videoconferences. When you have two executives sitting together, the people on the next level down are also collaborating to make decisions at a faster rate. That’s why I think the crisis is a real opportunity for corporate Australia. Many executives are now saying, “How do we preserve some of these new behaviours?” Those that do it better will have an advantage.
We’ll change our behaviours. Some behaviours are not sustainable – an executive team can’t meet three times a day, as many of them are doing now. But what behaviours made a difference? It might be the daily stand-up – and you can have that in 10 minutes – it might be making information available, using scenarios and the mindset around imperfect but speedy decisions with the right feedback loops. It’s mindset shifts and building the muscle around them then not losing the momentum.
We can move to the next level. All companies aspire to digitally transform – that’s what they need to succeed in the future. It requires organisational agility, as well as having a much more robust, real-time and granular data environment. When those things come together, you’ve got a fundamentally more adaptive and resilient organisation. Adaptiveness and resilience are two characteristics – as opposed to size and efficiency – that’ll determine the success of companies in the future.
Stefan Mohr is managing director and senior partner at Boston Consulting Group
