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Boosting competitiveness with a decision edge

When it comes to decision making, the only thing under our control is the process used to arrive at the decision.

Overview

Strategic decisions are, by nature, focused on the future. But who can predict with certainty things like plunging crude oil prices, terrorist attacks? Or less dramatic events like a dip in market demand. No one. Because luck is always a factor in any outcome. The only thing under our control is the process used to arrive at the decision.

Winning companies are those that gain what we call, the “decision edge.” The approach that infuses the learnings of behavioral science and decision analysis into strategic decision making. It removes the clutter of bias and hubris by applying data and science.

DOWNLOAD DECISION EDGE—BOOSTING COMPETITIVENESS THROUGH "SCIENTIFIC" STRATEGIC DECISION MAKING [PDF]

KEY FINDINGS

So why do so many decisions end badly?

There are three overall flaws within decision making: Conventional views of decision quality are wrong, more data does not mean better performance and confidence does not equate to competence.


Conventional views of decision making

Conventional views of decision making:

Every decision can be negatively impacted by bad luck. Or positively impacted by good luck. And luck can’t be controlled.


More data won’t take you there

More data won’t take you there:

So much data comes from so many sources that ambiguity, inconsistency and contradictions abound. Once a given point-of-view takes shape, executives tend to endow it with increasing levels of legitimacy.


Confidence does not equal competence

Confidence does not equal competence:

Too often strategic decisions are also dangerously distorted by intuition and inadequate methods. In fact, according to Accenture Strategy research, almost half (48 percent) of executives interviewed about decision making named “intuition” as one of their top three tools.

RECOMMENDATIONS

Because gaining a decision edge doesn’t require capital investment, the return on investment is high—making the difference between failure and success. So what should companies do to gain the edge?

Gaining the decision edge requires leading with a process—one based on rigorous practices that lead to better decision making by basing decisions on hard facts instead of gut feel. Companies should follow four basic steps:

Gain clarity on what exactly is being decided

Gain clarity on what exactly is being decided

Create create compelling, creative, diverse and executable alternatives

Create create compelling, creative, diverse and executable alternatives

Evaluate strategic alternatives logically and with appropriate rigor

Evaluate strategic alternatives logically and with appropriate rigor

Plan realistically

Plan realistically


Authors

Wayne Borchardt

Wayne Borchardt
Managing Director, Accenture Strategy

Mail to Wayne Borchardt. This opens a new window. LinkedIn
Joost de Haas

Joost de Haas
Managing Director, Accenture Strategy

Mail to Joost de Haas. This opens a new window. LinkedIn