The amount of time executives have to make key decisions is steadily declining.
The most critical elements leading to quality decisions include the information available prior to making the decision, the amount of time available to make a decision, and the experience of the decision maker.
Executives can establish practices that maximize the availability of relevant “small data” insights in circumstances where time is limited as well as for course-corrections after a decision has been made.
Introduction: Executives Face Increasing Time Pressure to Make Effective Decisions
CEOs and executives are faced with a growing issue in their roles as stewards of their departments and their organizations: the time required to make key decisions is decreasing. According to a study by research group IDC, 42% of executives and managers said they had less than 24 hours to make important decisions. 64% of executives managers have seen the time allowed for decision making shrink in the last 12 months.
The results of this survey should come as no surprise. The pace of change is increasing. The cycle of news, commentary, and conversation is perpetual. Technology and connectivity has made awareness ubiquitous. These factors put pressure on executives to manage a higher volume of information and decisions within a more condensed period of time.
Effective decision making boils down to three key elements: the amount of time available before a decision must be made, the information available prior to making the decision, and the experience of the decision-maker.
Clearly, the best decisions are made when the most complete information is combined with enough time for an executive to synthesize data, reflect on implications, apply experience and judgement, understand trade-offs, and arrive at a course of action. But having the benefit of ample time, complete information, and experience, at the same time, is extremely rare.
So how do CEOs and executives effectively manage time pressure when faced with making key decisions?
Step 1: Recognize that the ideal amount of information required to make the decision will be less than what is available at the time.
In his annual letter to shareholders, Amazon CEO Jeff Bezos stated, “Most decisions should probably be made with somewhere around 70% of the information you wish you had. If you wait for 90%, in most cases, you’re probably being slow.”
Executives fill in the information gap with experience, intuition, and ‘gut feel’.
According to a survey conducted by the Business Application Research Center, 58% of executive respondents say their companies base at least half of their regular business decisions on gut feel or experience rather than being driven by data and information.
In Part 2 of 3 Steps to Effectively Manage Time Pressure In Executive Decision Making, to be published on September 18, 2018, we’ll cover how executives are managing big data, “Infobesity” and finding actionable insights from “small data”.