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5 Reasons Decision Making Software Hasn't Changed the World

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Nov 12, 2013 10:05:00 PM

Back in the 1970s, Thomas Saaty kicked off the whole "decision science gets practical" movement with his development of Analytic Hierarchy Process (AHP). Yet the general quality of decision making in organizations is still very low - you've heard me bang on about that before.

40 years on, you'd hope everyone would get this stuff, right?

Decision Making Software Has Not Succeeded, Yet.

There are a number of companies and organizations that have set themselves up to tackle the issue, but they have had little impact on a large scale. Others have outsourced decision making to large consulting firms and never developed internal decision making resources. With the recession biting, many firms rely on strict financially based decsions making. But none has achieved scale and, as such, organizations around the world are still squandering billions of dollars each year on poor decision outcomes. This can only be viewed as a failure.

At TransparentChoice, we want to change the world by helping organizations make better decisions. We will do it one decision at a time, but make no mistake, we want to change the world. The cost of poor decision making goes way beyond the financial cost. Poor government decisions have a negative impact on those in need of help. Chemical companies making poor decisions have polluted our world. Flawed decision-making at agricultural and food companies have brought tainted products to market killing thousands.

Decision Making Software CAN Make a DifferenceSo, if we want to change the world through better decision making, if we want to live up to the promise of the cartoon, we should probably think about why others have failed.

Here are 5 main reasons that we have identified and I'd like to invite you to join the debate. You will probably have other ideas.

1. Decision Makers Are Overconfident

Try this experiment with a room full of people. Simply ask everyone to put their hands up if they are better-than-average drivers. It may be a cliché, but it works - you'll see way more than half the hands go up.

So it is with decision makers. With some apparent justification they seem to say to themselves, "I'm a manager. I must be good at making decisions, otherwise I wouldn't be here." Well, there's some truth in that, but the data don't lie - typically 50% of decisions turn out to be poor. The same outcome as flipping a coin. If you think that's good enough, then fine... but we don't.

It's important to say, these decision makers are not bad decision makers. They are often overconfident and simply untrained in how to improve decision making.

2. Lack of Training and Cultural Support

It's relatively rare that major organizations invest in training their managers and leaders to make decisions. Understanding data, modeling techniques, decision methodologies, solving the right problems, soft-skills such as consensus building  - they all play a role in making a good decision maker, but these things are seldom on HR's training check-list. Why?

Well, in part it's ignorance. Most people, don't realize that making decisions is something you can learn to do better. Paradoxically, making better decisions costs virtually nothing, yet has an unlimited upside. Now that's what I call a return on investment! It should be one of the first skills we invest in when someone becomes a manager.

And then there's the culture of "I'm the boss, so surely I have to lead... and that means making decisions!" Well, no. Leadership guru, the late Peter Drucker, said, "Most discussions of decision making assume that only senior executives make decisions or that only senior executives’ decisions matter. That’s a dangerous mistake.”

Decisions are made at all levels of an organization, all the time and in, the high tech "agile firms" at least, in a collaborative style.  If you don't have knowledgeable managers who can work collaboratively and if you don't set a culture that has good decision making at its core, you will get... well, you'll get what you've always had: 50% poor decisions.

It's not all doom and gloom. Some organizations are working hard to change this. For example, the Da Vinci Institute has recently developed a program aimed at helping governments build the skills and cultural approach to revolutionize the quality of their decision making. This ground-breaking program will change the lives of millions of people and I applaud the Da Vinci team.

This is an area we at TransparentChoice can help. We want to support you as you develop your own people to become better decision makers, our online academy is free and will, over time, develop to be a very rich source of decision making training and coaching materials. It will support newbies and experts alike and, we hope, will give people the inspiration and ability to immediately improve outcomes.

Training isn't all there is to it, however. A change in behavior is much easier with software in place. This software can really support the transition by enforcing good practice and by facilitating collaboration. It also makes the decision process transparent to managers, making it easier for them to coach their team on the right approach.

3. Decision Software is Too Expensive

The previous two reasons for failure are real and exist in "the environment". The next three exist because the purveyors of solutions have made some pretty key decisions of their own that have limited adoption of their solutions. Let's turn our spotlight on them now.

I've lost count of how many prospects have complained that they simply can't afford to deploy decision-making tools because of the costs. The software is often expensive and has very limited capacity. Add in some consulting and you can easily break into six-figures (that's US Dollars, folks!)

What is the upshot of this? Well, you need to be making a large decision to justify this spend. And this makes sense from the suppliers' point of view. They often provide professional services as well as software and they have only a certain number of people they can "sell". The price point, therefore, allows them to make a profit with a limited number of consultants - perfectly rational.

But at TransparentChoice, we want to change the world. That's our top priority.

I'm not suggesting we're not interested in profit, but our motivation is about changing the world and you can't do that if you only support the biggest decisions. Low cost means you can deploy it widely and realize the value right across your organization.

4. Decision Making Software is Hard to Use

I hear this a lot. Someone is wrestling with a decision and wants to introduce our software to help, but they get push-back. "We tried something like that before. We spent all that money and only used it once. When the consultants left, we never used it again..." 

I've been around enterprise software for a long time, and generally the user experience is not very good. Screens are unattractive and are not always logically laid out. They can be difficult to navigate and they kind of assume you know what you want to do.

Well, decision making software is a great example of this. There is not only a piece of software to get to grips with, but you also have to learn about decision methodologies and Saaty scales and... what was that other concept? Crunch!

When someone who's used other decision making software tries TransparentChoice, they are usually delighted that they need no training at all. It's intuitive and has help-and-guidance built in. We try to build in leaning and best practice tips right there in the product. Wow! What a concept.

I'd love to say we invented this approach, but it's what all good software does - what good software has done for years. What's new is that the fierce competition for space on the Internet has forced web developers to focus on the experience and some of that knowledge is trickling into B2B software and right down to you, dear reader!

This is critical, not merely convenient. If you want to change the world (or your part of it) you need wide adoption of best practice. If the software is easy to use, if it guides the user, then adoption happens. If it's not.... well, crunch! Again. 

Usability is a journey. We need feedback to make it better and that is built right in on every page. Why not start a trial and let us know what works and what doesn't?

5. Decisions Don't Stand Alone

Decisions are not terribly important. What is important is that decisions lead to change. 

Think about that for a second. I bang on and on in these blogs about how important decision making is, but decision making is only one step in the process that leads to change and it's action and change that leads to outcomes, good or bad.

So, why doesn't your decision making software allow you to slot in to the key processes in which decisions are made. Vendor selection, project prioritization, hiring decisions - these are all processes which have, as a key step, a decision. So why not have software that can support the process including the decision?

Why not, indeed? We think you should be able to and that's what we're busily building for you. This helps build good decision-making into your daily practice. It shouldn't be viewed as "something other" but should be part of "business as usual" and should be built right in to automated workflows, etc. This will make better decision making scalable across an organization - and scale will allow us, together, to change the world.