Saturday, February 11, 2006

Decision Making in a Connected World

The most compelling concern for us as decision-makers is about our impact. Whether it concerns the maintenance of service levels and economic growth in an ageing Europe, the outsourcing of services from the USA, employment security for half of the Indian population who happen to be under 25 years of age, peace in the middle east, allocating of the development aid by the UN, off shoring manufacturing to China, the trading of commodities, bilateral trade negotiations based on comparative advantage, or mergers and acquisitions across industry segments, we as decision-makers are paranoid about impact.

Our biggest challenge: knowing if the decisions we drive are indeed the driving force of change that creates the impact we desire.

Reports, analysis and studies document the impact of many a decision-maker, including our own. The Profit-and Loss statements of businesses, the GDP databases for nations, the Asset statements of individuals, organizations or even nations, unemployment numbers, the economic growth rates, the carbon levels or global temperatures all reflect the effectiveness of different decision-makers. As individual decision-makers, as an organization of decision-makers or as a nation or globe of decision-makers our effectiveness is documented by the State of the World, World Development Indicators, Fortune 500 lists, Worlds wealthiest, the most influential, the most powerful or most successful list.

It is well known that only a small fraction of individuals, organizations and nations retain their rankings in such lists from year to year . The history of such lists underlines the changes in impact the decision-makers have relative to one another. The records of impact highlight the statutory warning: such documents of performance present a history of performance, not a guarantee of the future.

Our performance results from the our understanding of the “system” and “required” interventions; it results from our agility to alter the scope and purpose of our systems and interventions. This understanding of the system and interventions makes up our “mental model” . An array of these mental models helps us to navigate to success. These mental models change and evolve; even co-exist in multiple versions.

These mental models are too many; they interfere with one another, produce too many complexities. Their paradoxes, incompleteness, exclusions, variations and inherent prejudices make them impossible, even embarrassing, to share. These models make up our very identity; they create the power to bring about change. They display our agility. They demonstrate our mission focus and display our strategic depth. They help create impact.

The remarkable work in the disciplines of mathematics, computer and information sciences, economics, systems, operations research, biology and chaos have yielded thousands of models, and even meta models that have helped many a decision-maker, perhaps also you, to enhance their own mental models. Increasingly decision-makers have learnt to articulate their mental models using the methods of formal modelling. Strategic planning, collaboration, transfer of technology, business of process reengineering, even automation and web-application have used these models to drive mission success.

What are the possible roles modelling can play over the next decade in helping us to enhance our performance in the changing contexts of decision making?

What will be the difficulties that need to be addressed, the technologies that need to be strengthened, and learning that needs to be accomplished to enable modelling of change to play a pivotal role in driving impact and be accessible to the decision-maker?

Suggested Links

1. Conversation with Arie de Geus Every Institute is a Living System
2. Kenneth Craik The Nature of Explanation
3. Johnson-Laird, P Mental Models


Post a Comment

<< Home