speed in business is critical
Sun Tzu (544 BC - 496 BC), Chinese Military Commander and Author
Regular or Tactical decision making is what we do on a daily basis. As a business leader we're all much more comfortable with day-to-day tactical decision making -- we do this regularly and have done so throughout our careers. Decisions like, should what cereal should I buy, or should I get a small or medium coffee, or hire this person or that often tend to be tactical decisions -- decisions that are needed and focused on short term outcomes. Routine choices. These choices also are focused on items you cannot control (you get what you get), and you cannot improve its performance.
Strategic decisions are different. Strategic decision making involves activities are related to and can impact the future of the company and the setting of longer term goals for the organization. These decisions affect the entire company and typically involve a commitment to resources.
In the book, Left Brain, Right Stuff: Wisdom, Courage, and the Key to Great Decisions, by Philip M. Rosenzweig, "The lesson is clear: in a competitive setting, even a modest improvement in absolute performance can have a huge impact on relative performance. And conversely, failing to use all possible advantages to improve absolute performance has a crippling effect on the likelihood of winning. Under these circumstances, finding a way to do better isn't just nice to have. For all intents and purposes, it's essential." And the strategic decision making to get there.
According to the EU business school, "Strategic decision-making is defined by two key elements. The first is building a broad view of a problem, analyzing it from a range of perspectives. When people make poor decisions, it is often due to basing that decision on limited information. Strategic decision-making attempts to avoid this by ensuring a problem is viewed from all possible angles.
The second key element is understanding the short and long-term implications of each potential avenue. After gathering this comprehensive information and examining the available options, a strategic decision-maker will then build a step-by-step plan for implementing their decision."
These are the shorter term, tactical decision versus the longer term strategic decisions. I discuss this also in the article, quick decision making. Given strategic decision making can have a high-impact on the overall business, resources, and / or direction (and its difficult to recover from a poor decision), more detailed research must take place. Additionally, you must understand the potential implications and risks associated with this decision, costs, resources, and how will it affect business priorities?
To start with strategic decision making, you really need to know where you are going -- your vision. Then identify the goals and path (strategy) to get there. Those involved would be key decision makers and leaders in the business, along with possibly board members or advisors.
Most decisions are regular and tactical decisions and can me made quickly, but strategic decision making is more impactful, has longer term repercussions and must be made in a more thoughtful way. All businesses must have a growth strategy, and strategic decision making is a critical piece of that.
Another related article related to better business strategy, decision making, decision making quotes.
What are your thoughts on decision making and strategic decision making -- does your business look at decisions this way?
Doe Zantamata: author, artist, and photographer