Strategic decisions in a business intelligence context

When my partners and I founded Phar, it was clear to me that maximizing intelligence efforts would involve activation, or if you prefer, the dialogue that leads to concrete action following understanding of the key information gathered by the watchers.

There are several elements at the heart of this thinking, and Olivier Sibony's book "vous allez commettre une terrible erreur!" helped me put words to this one. So, in this post, I wanted to share a few things with you and explain why it's so important to use a strategic decision-making method to harness the power of the collective.

Firstly, according to Harvard Business School, 85% of management teams spend less than an hour a month discussing strategy, and 50% spend no time at all. What's more, 95% of a company's employees don't understand strategy, and ultimately, 90% of companies fail to achieve their strategic objectives.

This lack of decisiveness translates into the emergence of new competitors whose reach is overlooked, new technologies to which we react too late, product lines we don't want to get rid of. Imagine all the great opportunities that could be generated by the key information from intelligence and the strategic discussions that could follow.

Secondly, many companies react too little or too late, and never manage to sufficiently reallocate their resources in the face of changes in their environment. These companies ≪ignore danger signals, fail to change their objectives to take account of new information, and continue to invest at a loss in the activities of the past≫ a classic example is Polaroid.

Thirdly,

Polaroid

Thirdly, the following expression, which I like to borrow from Olivier Sibony and which speaks for itself: facts, always facts... still you have to know how to look at them and analyze them says a lot. Even if the watchdog brings quality information into the company, if the managers don't take the time to analyze its content, asking themselves what this information would mean for them, and whether any action should follow from it, this information will have served no purpose.

Fourthly, how much time do you really spend discussing the strategic information gathered? Another interesting fact mentioned in this book, the decision-making process (THE HOW) weighs 6 times more than the decision (THE WHAT). What's more, the weight of the how can protect us from our cognitive biases.

Why is it so important to use a strategic decision-making method to harness the power of the collective?

Once again, we all have cognitive biases that can lead us to bad decisions. I like to think that the vast majority of leaders are not bad leaders, but that they are good leaders who make bad decisions! I also like to think that companies can improve decision-making by "MODIFYING THE ENVIRONMENT", not by "MODIFYING THE DECISION-MAKER".

It is therefore impossible to overcome our own biases, as Kahneman, who won a Nobel Prize for his work on cognitive biases, so aptly put it, "We are blinded by the obvious and unaware of our own blindness."

For my part, I wouldn't want to eliminate my own cognitive biases, even if it were possible, since they're associated with heuristics that are indispensable to me in discovering new ways of doing things.

In closing, why couldn't we introduce total quality into strategic decision-making using methodology and collective intelligence? There are far more formalized methods for framing day-to-day decisions than for making strategic decisions. For example: almost every company has standards and procedures on how to buy office supplies, but very few have a predefined method for deciding whether to buy a rival company and/or merge with it!