Skills in high demand
Strategic decision-making requires variety of skills:
systematic, yet flexible problem solving
clarity of thought and expression
conviction to pursue your decisions
collaboration and buy-in creation
thinking like a senior executive
Companies invest heavily in corporate training programs to equip its managers with these skills, so that they can handle greater responsibilities, and drive critical projects or businesses.
As someone who designs and leads such programs for a living, I can tell you that Senior Executives treat strategic decision-making skills as corporate superpowers. Superpowers, I may add, that unlock access to senior leaders, interesting projects, and promotions.
Why superpowers? Because:
Strategic decision-making is a core, never-ending business activity across a broad range of topics
Yet, there is no "one right way" to go about it, requiring a tailored approach to every situation
Most managers are not happy with the current decision making quality
Let's explore each of these reasons next (and offer tons of real-life examples of what types of topics companies tackle all the time - readers seem to have insatiable appetite for real life examples).
1. Strategic decision-making is a core, never-ending business activity across a broad range of topics
While there are countless reasons why strategic decision-making is important, the basic reason is that it is a core business activity - companies need to make strategic decisions all the time, and on all sorts of topics. Simply put, it is what companies do.
Strategic decision-making helps businesses better address challenges and capture opportunities. Since the competitive environment of any business always changes, the need for strategic-making never goes away. In fact, the more dynamic the environment gets, the more often decisions need to be made.
To illustrate the broad range of topics that benefit from a strategic decision-making process, I’ve compiled a list of 20 real-life topics that companies frequently tackle (listed alphabetically).
As you read the list, select the topics that are relevant to what you do in your organization.
Geography / International expansion
Internal projects prioritization
Large capital expenditure
Marketing spend strategy
Mergers and acquisitions
New product launch
Partnership ecosystem strategy
Sales territory alignment
User acquisition strategy
What other topics you deal with benefit from strategic decision-making skills?
2. There is no "one right way" to go about strategic decision-making, requiring a tailored approach to every situation
The second reason why strategic decision-making skills are in high demand is because there is no “one right way” to make business decisions. The process requires a tailored approach to every situation.
Thus, approaches do vary, e.g., deliberating, automating, prescribing, delegating, simulating.
Each of these could be "the right way" in a given situation.
To illustrate, here is a list of 10 diverse real-life examples of decision-making approaches I’ve been involved with:
Form a cross-functional team to develop a talent strategy for approval by the Company’s Executive Team
Establish a Pricing Committee with an explicit process for contract approvals, a standard pricing grid, and criteria determining when pricing exceptions can be considered
Retain management consultants to systematically think through the growth strategy of the business
Delegate decisions on employment anniversary awards to an assistant
Decide on product launches based on “test and learn” pilots in select markets
Explicitly articulate call center associates decision rights - when to decide on their own, and when to escalate to supervisor
Automate decisions on credit applications with a computerized algorithm for approval or disapproval based on information provided by customers
Organize a war gaming simulation to decide on pricing strategy in a maturing market with a handful of competitors
Delegate all decisions to autonomous teams accountable for their outcomes
Engage every employee in the company to develop its culture and values statement
3. Most managers are not happy with the current decision making quality
The third reason why strategic decision-making skills are in high demand is because the majority of managers are not happy with the quality of strategic decisions:
Only 28% of a McKinsey survey respondents said strategic decisions in their companies are generally good.
A further 60% said good decisions are made as often as bad decisions.
And, 12% said good strategic decisions are infrequent.
[Source: McKinsey Quarterly survey results, published in an article titled "The case for behavioral strategy" in which the authors Dan Lovallo, a professor at the University of Sydney, and Olivier Sibony, a director in McKinsey make a case for a deliberate process that safeguards against common decision-making biases.]
That said, even if the decisions quality is considered good, the strategic decision-making process can always be improved.
To relate this to your own experience, please brainstorm one idea of how decision-making can be improved in your company.
Link to your experience
Here is an idea for you - it will help you reflect on and evaluate what you just read. As you go about your day today, pay attention to:
The diversity of topics that the decision-makers in your company are making decisions on
The various approaches decision-makers around you are using in their situation
The "corporate superpowers" your colleagues use in decision-making
Just make a mental note when you observe any of these and link them to the importance of strategic decision-making skills.
Originally written by Aneta Key in February 2016. Last edited October 2018.