McKinsey on Making Good Business Decisions

This McKinsey survey on making good business decisions suggests several actions that are strongly associated with good financial and operational outcomes. In their survey, they asked executives from many countries about a capital or human-resources decision their companies made. The results highlight the real business benefits—such as increased profits and rapid implementation—of several decision-making disciplines. It seems to me that in three of the four social media can play a useful role. Although in the end it is the people and what they might do with the technology, not the technology, that matter.

Here are the four approaches McKinsey mentioned and some comments on hoe enterprise 2.0 tools relate to each.

First, ensure that people with the right skills and experience are included in decision making - Social media can be very helpful in finding the right people with the right skills within a large organization, or even a small one. Tools like Connectbeam that help you find the right people can address this. I recently spoke with Johan Rosius from Novell Teaming, who shared with me a related example of a significant return on an enterprise 2.0 investment. The engineering group at Shell has a diverse set of skills and is scattered around the globe. When one of their plants goes down, it can very expense for each day it does not get back up and running. Shell found that the key was getting people with the right prior experience to work on these down plants.

So they created a community of practice with Novel Teaming. It has enabled Shell to better share best practices and to get the right resource applied to down plants. The result is hundreds of millions in cost savings. I can believe this as I was involved with a similar effort with global chemical company using older KM technology in the early 90s and similar results were achieved. However, now we have much better tools to address these issues.

Second, make decisions based on transparent criteria and a robust fact base – The necessary robust fact base can be augmented by the many eDiscovery tools (e.g., Attivio, Recommind MindServer, Exalead CloudView) that go beyond standard search criteria. For example, the new iQuest tool, Blue Ant, has helped some pharma companies find missing data in their terabytes of content located in different tools with different metadata. In the past it was easier to rebuild a compound that find an existing one.

Third, ensure that the person who will be responsible for implementing a decision is involved in making that decision – This is critical and the one of the four that social media will not play a direct role. However, the many enterprise 2.0 platforms for managing efforts (e.g., Traction, Central Desktop, QuickBase, Wrike) can certainly help the person and team implement the decisions.

Fourth, some types of consensus-building and alliances apparently can help create good outcomes – Social media tools can be very helpful in building consensus and support alliances through enhanced collaboration. The list is long here (e.g. Awareness, Tomoye, Lotus Connections).

I think the capabilities supported by most enterprise 2.0 tools are aligned with the basic principles of good decision making. This is one reason for their adoption. See another McKinsey report for the related report on six ways to make Web 2.0 work.

Comments

[John Maloney]

Hi - Here is Accenture's view. It makes a lot more sense.

“…adding another collaborative technology or embarking on a program of cultural transformation, management simply looks for more ways to connect people. Such initiatives can make leaders feel that they are increasing alignment and organizational focus on strategic objectives; in fact, these plans more often create unmanageable demands and fail to bring about changes in behaviors and networks.”

http://valuenetworks.com/public/item/229189

-j

[maviyan]

Wow! Thanks! I've already bookmarked the site & saved a couple reports!
http://www.surveytool.com/making-surveys/