The risks in making the right decision

Written by Nik Mohd Hasyudeen Yusoff

Monday, 01 June 2009 22:42

MAKING decisions is something that we do every day. These decisions could be either for ourselves or for the organisations that we serve.

Prudence requires detailed analysis to be performed before a decision is made. This principle is applied across the board, particularly in organisations which carry the mandate of many stakeholders, large corporations and the government.

The decision-making process normally involves layers of people executing a whole range of activities such as preliminary studies, consultations and study visits before a recommendation is made.

The decision makers would evaluate the recommendations before deciding whether to agree, disagree or make requests for the recommendation to be further refined.

All is well and fine when the environment in which the decisions are made remains unchanged. However, given the world that we are living in now, where change is the only constant, arriving at the right decision may not be that straight forward.

What are some of the issues?

First would be whether the solution is meant for the right problem? Accepting the real problem as the problem is key in identifying the solutions. While this sounds very basic, there are people out there who may find this very challenging. Why? Ego perhaps?

Or this would be admitting that what was considered right in the past may no longer be the case now. Some could even be confusing the symptoms with the real problems! There could also be situations where admitting that there is a problem is a no-no is the first place.

Second would be the assumptions made in analysing the problems and arriving at the solutions. Even if the real drivers behind the problems are identified, issues associated with the drivers need to be understood so that the right probable solutions could be crafted.

A classic example of making a wrong assumption is the story about an experiment with a grasshopper. A researcher placed a healthy grasshopper on the ground and told the grasshopper to hop. And the grasshopper did hop. The researcher pulled off the grasshopper’s two big back legs and told the grasshopper to hop again.

This time the grasshopper did not. It was concluded that when the two back legs of the grasshopper are pulled off, the grasshopper could not hear!

Continuity of the people involved would be the third critical issue. Sometimes some issues are deliberated over a period of time before a final decision can be made. In organisations where people are promoted or transferred in high frequency, those who are given the responsibility to solve the issues could change during the decision- making period.

In the absence of an effective process in transferring knowledge, especially tacit knowledge surrounding the problems and issues, to the new person, the speed and quality of the solutions at the end could be compromised.

The fourth issue would be the capabilities of the decision makers. This does not imply that most people who are in the decision-making positions are not competent. However, there could be situations where the issues may require specialist knowledge or developments on the ground that they necessitate a totally different mindset for a particular decision to be made. Organisations which apply the time-based promotion system may face more of this challenge.

Timeliness of the decision determines whether it is still relevant and resolves the initial problems. This is akin to arriving at the train station when the train has left. It could be that too much time was taken in deciding which route to take or what would be the mode of transport to the station when being there on time should be the overriding objective.

Another dimension which involves time is how long would the effect of the decision be seen. This relates to strategic decisions in particular where the consequences would only be appreciated after a generation, in some cases.

The final issue perhaps is how the decision is carried through. This is more critical if it involves change of policies or some measures which may not be popular. Sometimes the noble intent of the decision is compromised by the lack of effective follow-up actions or the communication elements were not thought through or executed effectively.

A right decision is not necessarily popular and a popular decision is not necessarily right! On the other hand, public relation campaigns would not be able to make principally wrong decisions right.

We all would have to live with the consequences of the decisions that we make. However, when our decisions affect more people than just ourselves, the risks outlined earlier should be seriously considered as others would bear the fruits of our decisions. That is a heavy responsibility!

Nik Hasyudeen is the president of the Malaysian Institute of Accountants. He can be contacted at This e-mail address is being protected from spambots. You need JavaScript enabled to view it .

Port Klang Authority at the deep end< Prev		Next >Higher incomes — a prerequisite for consumption-led economy

Last Updated on Monday, 01 June 2009 22:54

Sorry, you cannot post a comment unless you are a registered user.

JComments

Categories

Other Publications & Pullouts