Since we are kids, we have been in many situations to practice selecting between choices. Choosing one thing over another. As we grow, those options and our choices have made a significant impact on our lives today. Decision matters.
So, why is it that when it comes to the business world, we confuse decisions with other things? Pertinently, these are the major myths about business decisions.
MYTH 1: Process is decision
Processes are important in organizations, look at the process like a moving train which at some point reaches the station and you need to do something at that point. Processes should distribute tasks across organizations, enable collaboration to get things done by providing the right information at the right time to the right people to act upon.
MYTH 2: Rule is decision
Business rules are critical to a business operation, they guide how to do things, they shape judgments, they influence operation. Business rules might be based on internal and external policies or regulations and laws. They set a framework for organizations on how to operate.
MYTH 3: ML is decision
Machine Learning (ML) is a set of techniques and algorithms that allows training software (or hardware) to understand a pattern or behavior from data. You use data for training and then the result is a trained model (i.e. trained algorithm) that can classify, predict, etc on specific cases based on the data it had seen.
MYTH 4: Data is decision
This is an interesting one, we think we know what data is. But it is very easy to get it confused with rules. And if you think the rules are the decisions, then you are leaning toward concluding the data is decision. Data can be presented in different ways i.e. in the form of a dashboard, a report, etc.
Why is Knowing These Myths Important?
You might ask what difference does it make to differentiate the decision from other things. A lot! Assumptions derive behaviors.
Decisions are the very source of inefficiencies if you don’t get them right. They are the source of customer churn, satisfaction, personalization, optimization, time, and resources wasted. Therefore, by improving a decision, (and only a decision) you can improve many aspects of your business operation. That’s why they are called operational decisions. This makes it critical to learn about these myths about business decisions and address them properly.
But here is an interesting fact, with the rise of technology, investment, and competitive landscape that you are operating, the borders between different types of decisions have become blurry. Strategic, tactical, and operational decisions are overlapping. And that’s why you can see a decision is misinterpreted with other things like process, rules, data, etc. It's high time we stop following these myths about decisions.
In an excellent research, Gartner illustrates this convergence and overlapping behavior clearly depicted:
- Convergence of the tactical and the strategic
- Make an acquisition to learn about digital markets.
- Create a digital sublabel for a brand to test new business models.
- Require higher-level management sign-off for initiatives and policies.
- Convergence of the tactical and the operational
- Start an influencer service program to manage brand reputation.
- Hire scarce staff, such as data or decision scientists
- Convergence of the strategic and operational
- Quickly scale up (or down) parallel supply chains, based on local needs.
- Expand into a new geography or product category on an e-commerce platform.
- Convergence of the tactical, operational, and strategic
- Implement crisis management.
Although different types of business decisions are overlapping, we should not confuse decisions as data, rules, processes, etc. Let's not blindly follow these myths about business decisions. Because if we do, we will limit ourselves in terms of:
- how we can improve and deliver the business value
- how we can get real value from advanced technologies such as AI/ML
- how we can navigate operational capacity limitations
- how we can provide personalization as scale
- … and etc…
Published November 18th, 2021 at 02:00 pm