BMLOGO 20130402

BEACON MANAGEMENT
Management Consultants

Strategic Planning  ~  Business Planning  ~  Market Intelligence  ~  Decision Making
Corporate Finance  ~  Information Management  Franchise Services  ~  Turnaround Management
Joint Venture, Strategic Alliance & Acquisition Services:  Deal Structure  ~ Negotiations  ~  Due Diligence  ~  Valuation  ~  Targeted Searches

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CORPORATE DECISION MAKING PROCESS

Decision making doorsWe have developed a methodology to help improve the corporate decision making process.  The methodology utilizes a process that allows for enhanced accountability.

Outcomes are the result of a process.  The decision making phase should occur early in the process. Our goal is to make the decision making process as effective, objective and accountable as possible.  In order to achieve this we work with management to develop the criteria to be used in the decision making phase.  We use a consensus approach involving those most involved in, or impacted by, the decision to help develop the criteria.

Once we have developed a list of criteria we prioritize the criteria involving the same group that was used to help develop the criteria.  We then discuss the criteria with the group and reconcile any significant differences in opinion regarding the relative significance of any of the criteria.  If necessary or appropriate we re-prioritize the criteria after these discussions.

Question mark Blue 1The next step is to determine how many of the criteria will be included in the decision making (evaluation) process.  This generally becomes evident based on the prioritization exercise.  If it is not, then there are a number of ways to make this determination.  Once the list of criteria is finalized we weight the criteria.  Each criteria is assigned a value so that the total value of all the criteria to be used in the decision making (evaluation) process equals 100.

The weighted criteria are used to evaluate the decision or alternative options and a decision is reached based upon the score or relative scores (if more than one option is being considered).

There can be a predetermined outcome based upon the score e.g. if choosing from alternatives the one with the highest score is chosen or the options with the lowest scores are eliminated.  Alternatively, thresholds can be established with different actions for different scores e.g. less than a certain score - do not proceed, if the score is between X->Y take a particular action, if the score is between Y->Z take a different action.

One of the compelling benefits of this process is the information sharing and knowledge transfer that occurs during the development of the criteria and evaluation phases.  Another critical benefit is the ability to establish a follow up process based on the criteria used to make the decision so that its progress can be tracked and evaluated.  In most instances the criteria can be used to establish budgets, time-lines, projected outcomes, metrics and KPIs.  Progress and actual results can then be compared to expectations and this follow up can be used to respond to significant variances in a timely manner.  This follow up can also be used to refine the criteria and to refine the decision making process, where appropriate.

Button check mark1This decision making process can be utilized in many diverse situations, from making ongoing operational decisions to a decision that can have a significant impact on the company's long term success.

We recommend that the initial implementation of this process focus on a limited number of material decisions and that the nature and scope of its implementation be expanded over time as management and those involved in the process become more comfortable with its application and results.

 

Please send us an e-mail if you would like to discuss how our decision making methodology can help your company improve its performance.