Strategic decisions are a very important part of innovating new products. These decisions can include things like which markets to go after, what type of product to bring to market, which business model to pursue, and how to market the product. So how can you make high-quality decisions?
At FROM, we do a lot of work to support decision-making processes, including conducting research, gathering necessary facts, and facilitating group involvement in decision processes. We've had the opportunity to see a lot of decisions get made, and to see the results of those decisions. We've seen good decisions and bad decisions, but perhaps most importantly, we've seen decisions made well.
But what is a high-quality decision, or a decision made well? Decision-making can be broken down into three key steps, and each step has a distinct set of questions that will help define how to make decisions during that step.
Step 1: Frame the Decision
What are we deciding?
A decision is an answer to a question, and the question should be clear and specific. A question like, “What is our strategy for 2014?” is not a very clear question, and broad questions like these should be broken up into a collection of smaller, clearer questions. The question “What is our strategy?” could be meant to ask: What investments will we make? What products will we market? What new channels will we focus on? And What will our R &D team focus on?
What are the success criterion?
How and when will we know if the right decision has been made? How will it be measured? Being clear on the metrics will keep priorities and the outcome that matters clear. Also consider what, besides correct decision-making, will have to happen in order for the outcome to be achieved.
What other decisions is this decision dependent upon?
Consider if there are decisions that precede the one you are trying to make, as you may need to focus on those first. It might be difficult, for example, to choose a marketing campaign until you decide which market to go after.
How critical is the timing of this decision?
Decision processes can be rapid, or more thorough. By when does this decision truly have to be made? What are the dependencies and critical path issues? What is the consequence or cost of delay if you need more time to make the decision?
What is the consequence of making the right decision?
How critical is precision? How permanent is this decision? Combining the answer to this question with the answer about decision timing will allow you to determine how long you can spend building consensus or doing research before you must make the final decision.
Step 2: The Decision Process
Have we identified all the options?
Even if the answer seems obvious, it’s good to make sure we’ve identified all available answer choices. Are there limiting beliefs or assumptions that are narrowing that field of options?
What are the decision criterion, and how should we weigh them?
One choice may cost more money, another may reduce manufacturing risk, and yet another may create a product with more competitive differentiation. Which criterion is more important?
Do we have all the facts?
Which facts would help the decision process, and have they been gathered? If only partial information is available, have you considered what it would take to get a fuller picture of facts? Facts can both support the weighting of criterion, as well as the answers to the criterion items themselves. Fact-based decision-making facilitates change and transformation by introducing objectivity, consensus, and decision confidence across your teams.
Step 3: Setting the Decision up for Success
You’ve framed the question and you’ve gathered the facts. You’ve determined the decision criterion, you’ve weighed them, and you believe you have a correct answer. And maybe you have the right answer. But quality decisions are about more than that. They’re about making sure the outcome of the decision achieves the objectives, which is a broader perspective.
Have we involved everyone that should be involved in this decision process?
At times, it can seem like the fewer people you involve the better, since it allows you to make a decision more quickly. But there are two reasons to involve more people in your decision process. The first is that different perspectives may help color the decision process. It’s great to have senior executives weigh in, but have you heard from the people who will be on the ground implementing the decision? If not, they may give you substantial additional insight.
Beyond this, whose support you need to implement this decision, and have they had a voice in this decision process? People support what they create, and if a broader range of people feel that they’ve had a voice, they may be more ready to support its implementation.