I am the Decider: Decision-Making Models

There are three levels of decisions usually made in an organization (and anywhere really):  strategic decisions that set the direction for the entire organizations and are usually made by senior leadership;  tactical decisions that are about how things will get done and are made by managers;  and operational decisions that are made by employees each day to run the business.  

When a decision is made, it typically is made using one of 4 decision-making models.  Rational decision-making relies on a series of 8 formal steps to arrive at a decision.  This model encourages the decision maker to come up with more than a few alternatives.  An abundance of information can lead to analysis paralysis or the inability to make a decision based on too much information.  Also, its more like how a robot thinks and less like how a human thinks, as we involve emotion into the process (my assessment,  anyway).

The bounded rationality decision-making model is a modified version of the rational decision-making model, however it differs in that it effects a tendency to satisfice, or to sacrifice some of our criteria for near instant gratification.  Decision makers may experience disappointments after making good enough decisions based on minimum criteria.  This can also limit one's true options and opportunities.  

The intuitive decision-making model relies mostly on experience and training by applying knowledge to a scenario and crafting an option which considers the environment in which the decision is being made.  Firemen, police officers and race car drivers have to make these kind of decisions.  In an organization, this model could consider employees, guidelines, political relationships in the business, and compliance rules, when making decisions.  

Sometimes, when I use this model, I call it going from the gut.  I just feel that I know the answer.  And after saying nothing most of the time for over 20 years, I realize that I have gone through a few winters successfully so I can trust my instinct.  And it has served me well since.  An alternative here would be using the bounded model because I would not have as much time for the rational model.  Which is where many people fall.

The 4th model is creative decision-making.  In this model, one would gain experience and knowledge about an area, let it all simmer and try to conceive of something new and something different.  Users of this model tend to be experienced risk takers who are imaginative, and that's not everybody.  My favorite part of this model is the part when the idea materializes completely out of cycle.  The idea incubation time has been mistaken for slacking in the past, in many different places.  But now, free Mountain Dews and foosball on roller skates between work meetings.  

I was on a plane one day heading back to London in first class comfort after hours spent collecting feedback on a major issue.  Pressure from the clients and from my employer along with the time difference hat its effect on me so a smooth ride home was highly anticipated.  And it was there, in that comfortable peace and quiet, after the pilot announced we were having a bird's eye view to some geographical location, that I shouted out "nested queries!", shocking my 75 year old neighbor into semi cardiac arrest.  I had figured out exactly how to begin resolving this huge issue which also had a global impact.  

I have used all 4 models at some point, maybe on the same decision at different times.  For example, for my first car - a 1974 apple green Chevy Nova - I used the bounded rationality model:  this car wasn't newer looking but it moved, and it would be mine!  For my last car, I used the rational decision-making model.  At this stage in my life there is much more at stake.  I have children, responsibilities, and obligations.  I just can't jump in my Nova and book it to Boston for the weekend.

It's not a bad idea to create a decision-making model matrix for your Project Management Office.  If you can successfully incorporate your culture's primary decision-making model, you can suggest training to heighten those traits, metrics to measure the impact of the switch, and rewards to stimulate participation.  It should help when you are using internal project leads instead of project managers.

The Difference Between Management By Objectives and The Balanced Scorecard

Management by Objectives involves an organization creating goals and objectives at the highest levels of the hierarchy, directly driven from the mission and vision, then passing these goals on to everyone in the organization to adopt, adapt and achieve.  The goals and objectives are reviewed periodically to monitor progress and to reward employees who perform well.  It is a very organized process during which and was first introduced Peter Drucker in 1954.  

In contrast, the Balanced Scorecard provides metrics and feedback on how the goals are being achieved, how employees are performing and how business can be improved.  It looks at customers, historical data, finances, processes and innovation to measure quality and quantity.  Whereas MBO typically provides the direction needed around the goals and objectives of the organization, the Balanced Scorecard helps provide a balance platform upon which to properly evaluate how well the directions from MBO are being implemented, and what efficiencies can be gained. 

Commonly, organizations rely on MBO - Management by Objectives to deliver on the performance appraisal process.  Too often enough, we forget that its the numbers that will tell the story, and that it has to make sense.  So let's consider the front nine and back nine of the MBO process, where MBOs need to be complemented with a Balanced Scorecard which would increase in complexity depending on the organization.

5 Steps in Managing Organizational Change

Change is difficult.  Organizational change is something that can make or break an organization.  It has a great impact on employee morale and has to be managed properly.  As such there are a few things an organization can, and should do to prepare for change.  

1. Communicate a Plan for Change:  Ensuring that the message is clear and there is a vision.
2. Develop a Sense of Urgency:  Formulating the need for change and tying it to the organization's success. 
3. Build a Coalition:  Engaging leadership to champion the message and sense of urgency throughout the organization.
4. Provide Support:  Providing emotional support, instrumental support and feedback opportunities to employees. 
5. Include Employees:  Allowing employees to participate early on in shaping the change will build a sense of ownership.