Evolutionary decision-making is driving engagement and performance!

05. October 2021

97% of business tensions are related to suboptimal decision-making[1]

  •  This is due to many organisations relying solely on an analytical decision-making approach, which may work well in orderly and highly predictable environments, but not so well in a more complex business landscape.
  • iBsing leverages existing business processes and business transformation initiatives to embed evolutionary decision-making into the organisation
  • direct way to short and long-term financial improvements

Organisations can learn a lot from nature!

Already in 1990, Frosch and Gallopoulos discussed ways in which organisations could learn from natural ecosystems:

“The analogy between the industrial ecosystem concept and the biological ecosystem is not perfect, but much could be gained if the industrial system were to mimic the best features of the biological analogy”.

(Frosch, R.A. and Gallopoulos, N.E. – 1990)

Over the past decades, big corporate companies have not evolved their way of working to appropriately adapt to the changing environment. They apply mainly a mechanical “sense-analyse-respond” approach and essentially, have not applied a “sense-probe-respond” evolutionary approach found in complex natural ecosystems. Mature natural ecosystems (like a rain forests) create a lot of value with low energy consumption. They achieve this through having sophisticated information flow, high level of diversity and specialisation, converting linear material into material cycles and eliminating waste. All this supports mature ecosystems in being more resilient and sustainable.

“The most important factor in survival is neither intelligence nor strength but adaptability.” (Charles Darwin)

Allow me to now further demonstrate how organisations could improve “decision-making” processes to maximize adaptability in a more and more complex industrial ecosystem.

iBsing sense-making shows, that employees wish for evolutionary decision-making

“Top-down” and “consensus” methods to decision making are currently the most popular within corporate environments. The first one exposes corporates to the risk of being disconnected from relevant insights and the second approach, corporates face the risk of decision-making becoming subject to personal agendas and other non-essential requirements that impede the process.

Over the past couple of months, I have conducted “sense-making”-interviews with more than 40 employees from all levels in the organisation and across 10 corporate companies including several industries. We explored business tensions and the underlying constraints.  A “business tension” is defined as a discrepancy between an employee’s current perception of a situation versus the personal expectation.

Accordingly, a business tension often triggers the employee. I was truly surprised to learn that 97% of “business tensions” were difficult to resolve due to suboptimal decision-making. Not surprisingly, many employees are getting really frustrated about bad decisions, about wrong people taking the decisions, or about missing sense of urgency or slowness around critical decisions.

Better organisational decision-making will increase employee satisfaction!

“Across most Eastern and Western European countries, fewer than 2 in 10 employees are engaged by their day-to-day workplace experiences.” Gallup [2]

Based on the aforementioned interviews, I hypothesised that good decision-making drives significantly higher team engagement and consequently better organisational performance. Furthermore, employees see potential for improvement in three other areas, which are also strongly interlinked with decision-making:

1.     Organisational Alignment: Providing better clarity and alignment around roles and responsibilities as an input for decision-making

2.     Organisational Learning: Ensuring an appropriate governance structure to address tensions related to processes, systems, organisational setup, to foster the right environment for evolutionary decision making

3.     Execution: Providing an ecosystem where there is less reactive firefighting and more proactive decisions founded on agreed upon priorities

Leveraging the Toyota Kata Approach for evolutionary decision-making

Toyota has embraced this philosophy, by applying “evolutionary development” in their industrial ecosystem, which has led to better manufacturing processes and exceptional financial performance and growth.

The 4 Step Toyota Kata[3] approach is an evolutionary approach for improvement!

  1. Being clear on their vision
  2. Understanding their current condition
  3. Identifying the next target condition
  4. Responding appropriately (plan-do-check-act) to overcome obstacles

Looking strictly from a perspective of the “decision-making” process, step 3 requires one big decision to be taken by the accountable lead, and step 4 requires plenty of decisions taken by people with an entrepreneurial mindset.

Step 1: Being clear on their vision

To identify the organisational vision, it is best to use storytelling and to get buy-in from leaders and employees that are most identified with the organisation. Understanding and incorporating common themes that best captures the shared organisational vision.

Step 2: Understanding their current condition

A capability assessment (for processes and systems) combined with (iBsing-) sense-making approach (for organisational and human enablers) is the best way to understand the current condition of business area in scope for improvement.

Step 3: Identifying the next target condition

The identification of the “next target condition” is always a big decision.

“An essential intent is one decision that settles one thousand later decisions.[…] Once the big decision is made, all subsequent decisions come into better focus.”

Greg McKeown[4]

Taking such big decisions may require quite some effort, time, dialogue, consultation, analysis, experimentation and empathic listening. In return, through the alignment with the vision, efficient and effective progress is enabled. The main difference here versus traditional decision-making, is that such big decisions are arising mainly from whatever is emerging out of the current moment, and not from a wishful imagination of the future.

Step 4: Responding appropriately to overcome obstacles

This step includes all the decisions that are taken by the employees on the way towards the target condition to overcome all kind of obstacles. In this phase entrepreneurship is needed. It is helpful to be clear on roles and responsibilities, to ensure everybody in the organisation is taking full accountability for their tasks linked to their roles.

In general the consent decision-making process is most appropriate in step 4, which means that organisations can then move forward with a proposal, unless there are valid objections. Not always looking for the optimal solution that may slow the process down, but finding good solutions that are good enough.

How can iBsing improve your decision-making and deliver concrete results?

The iBsing framework leverages current processes (e.g. S&OE, IBP) to drive improvements in revenues, profit, OTIF, inventory, productivity and ultimately growth. In business transformations, the iBsing framework is integrated into the governance model of big change initiatives to maximize efficiency and effectiveness of the transformation.

The advantage of applying the Integrated Business Sensing (iBsing) framework is the speed at which performance improvements can be achieved. iBsing starts with short-term improvements whilst always keeping an eye on the long-term impact. iBsing is the optimal approach to achieve short term financial results without compromising long term improvements.

You are welcome to contact me, and we can then discuss how iBsing could support you in mastering a critical operational challenge or important business transformation.

iBsing sense-making is an investment worth making, where we will support you in more accurately describing the current condition, define the ideal target condition, and then presenting you with a favourable ROI, with a concrete value proposition.

I will be happy about your questions and comments related to this article!

Lastly, I thank you in advance for any opportunity to support you in mastering a critical operational challenge or important business transformation within your organisation.

LinkedIn Article

[1] Based on interviews with 10 companies conducted by iBsing

[2] Source: https://www.gallup.com/workplace/350201/europe-workplace-trends.aspx

[3] Rother, Mike. Toyota Kata: Managing People for Improvement, Adaptiveness and Superior Results . McGraw-Hill Education.

[4] McKeown, Greg . “Essentialism: The Disciplined Pursuit of Less Done right”. Ebury Publishing.