Elements of a Good Decision-Making Process

In this series of articles we are establishing a profile for what is required of a process for good corporate decision-making. While we are principally referring to collective decision-making at the executive or management level, the processes, methods and techniques are applicable for all personnel and at all levels of the corporate chain.

We regard the following as essential properties of a good decision-making process.

Consistent
Obviously, the process must be used consistently. But more than that, it should guarantee logical consistency. Decision making requires that we express preferences that do not allow situations where A is preferred to B, B is preferred to C and C is preferred to A. Being logically consistent is not a sufficient condition for excellence in decision-making but it certainly is a necessary one.

Appropriately Rigorous
Rigour is the exactness and care with which we analyse issues. The approach is selective because we ought to use our time and energy efficiently and this means using appropriate levels of care where it matters. Determining where it matters is part of the process. Different parts of the decision will have different levels of impact on the outcome. We need to understand these sensitivities ahead of time so that we can apportion our efforts intelligently.

Consultative
No individual can claim to carry the totality of information required to make good decisions in a complex environment. What is needed is balance and diversity of views that can only arise from collective experience. We therefore need to canvass a sufficiently wide range of opinion in order to control the subjectivity that would otherwise colour our decision. The depth of consultation should again be guided by the degree of impact the issue is likely to have on the decision outcome.

Documented
A good decision process ensures that collective experience becomes collective memory so that future deliberations can benefit from past ones. Therefore details, issues, debates, research, analysis and opinions must be recorded and filed in a way that facilitates later access.

Transparent
The process must be open and transparent, avoiding the potential for mis-interpretations by those whose opinions do not eventually prevail. The reasoning and evaluations that led to the conclusion should be clear, placing the integrity of the process beyond suspicion.

Justifiability
A good process should facilitate the justification and defence of the decision. It does this by being transparent, rigourous and consultative, allowing it to be scrutinized with impunity.

Objective
The process should enhance objectivity by making use of recognized standards and benchmarks wherever possible. This provides credibility and objectivity.

Scaleable
A scaleable process can be applied to a variety of decisions both large and small, simple and complex. The full force of the process can be spared for cases where to use it would be overkill. However, even in the context of small decisions, certain basic steps ought to be taken such as to define the objective, identify criteria, establish alternatives etc.

Utilised
There is no point having a carefully documented process that nobody bothers to use. It should be a living, breathing mechanism whose benefits are obvious and so becomes inseparable from the ordinary operation of the organization.

The Analytic Hierarchy Process
Methods like the Analytic Hierarchy Process (AHP) exhibit may of these qualities. AHP was developed in the seventies by Professor Thomas Saaty in the United States. The process provides the means of identifying and analyzing decision criteria, options and attributes and quantifying their relative value. One of its strengths is that it can synthesise data arising from many information collecting instruments and methods. These can include

· Focus Groups Results
· Surveys
· Multiple Choice Questionnaires
· Decision Trees
· Decision Tables
· Expert Advice
· Pair-wise Comparisons

The results of these can always be processed in a way that informs the hierarchy that lies at the heart of the method. We shall discuss the AHP method in some detail in future articles.