The Nature of Strategic Decision Making

Much of what I read about “Business Management/Decision Making” seems to be written by folks who have little experience in business management.

Business Management is all about Decision Making (but not only about decision making).The_Thiinker

The purpose of this article is to put a focus on strategic decision-making – specifically how strategic decisions are made in real corporate life.

Corporations evolve strategies and allocate resources to Initiatives by way of ROI (Return on Investment) submissions/ authorizations.

All Initiatives have goals/objectives. All Initiatives have time spans. If you see one that appears to go on and on, you are looking at an initiative that receives extensions to previous allocations of resources.

There is no point doing work that does not contribute to advancing the state of an Initiative toward its goals/objectives.

Progress toward initiative goals/objectives is non-linear. Generally, it follows an “S” curve (slow to achieve liftoff, following by rapid progress, only to slow down toward the end of implementation).

Work involves steps, different steps require different resources and most work benefits from consistent use of “best practice” protocols. Some work is unstructured.

Decisions along Initiative timelines must be made before steps, at steps and after steps in order to maintain forward momentum of Initiatives.

Decision-making is the transformation of information into action.

I count six (6) sources of information for decision-making (knowledge, experience, intuition, wisdom, data/analytics, and rule sets/algorithms).

Good decisions are generally the result of reliance on more than one of the six (6) sources of information.

  1. Knowledge maps easily to information providing the decision-maker understands what specific knowledge he/she has access to (i.e. known knowns, known unknowns, unknown knowns, unknown unknowns).
  2. Experience maps to information when such experience was gained dealing with initiatives similar to the one that has the focus.
  3. Intuition maps to information when the decision-maker has a good track record relying on intuition at prior initiatives.
  4. Wisdom is a state of maturity that some people reach – in respect of decision making it has two manifestations i.e. knowing what to do, knowing what not to do.
  5. Data/analytics maps to information when the data is good and the analysis is sound.
  6. Rule-sets map well to initiatives when data is within the boundary conditions of the rule sets or when an algorithm working on the same type/quality of data has yielded good decisions.

Final points . . . .

Decisions typically get made when they need to be made.

Many decisions are made in the absence of adequate information, without consideration of associated risk/uncertainty and without consideration of the amount of resources they tie up (i.e. from low risk/short timeline/high return to high risk/long timeline/low return).

When you are making decisions bear in mind Donald Rumsfield’s 4K’s (known knowns, known unknowns, unknown knowns, unknown unknowns).  What you don’t know will hurt you!

Another good piece of advice is to bear in mind that if you cannot see the resources you are committing to initiatives, the quality of any decisions you make will be diminished.

The core message of the RBV (Resource Based View) methodology is “… it is difficult to make decisions when you cannot see the resources that will be impacted by such decisions”.

See “Decisions, Decisions, Decisions”  (2014-12-02) for a operational perspective on decision-making.



Management consultant and process control engineer (MSc EE) with a focus on bridging the gap between operations and strategy in the areas of critical infrastructure protection, major crimes case management, healthcare services delivery, and b2b/b2c/b2d transactions. (C) 2010-2021 Karl Walter Keirstead, P. Eng. All rights reserved. The opinions expressed here are those of the author, and are not connected with Jay-Kell Technologies Inc, Civerex Systems Inc. (Canada), Civerex Systems Inc. (USA) or CvX Productions Number of accessing countries 2010-2020 : 168
This entry was posted in #strategy, Enterprise Content Management, Knowledge Bases, Risk Analysis and tagged . Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s