From mobile banking to artificial intelligence, the products and services that business and consumers have at their disposal are better than ever before. The pace of innovation, and the accompanying increase in consumer expectations, is only escalating. In this environment, conducting exhaustive research studies and planning sessions in an attempt to find the “perfect” course of action is no longer viable. The need for speed and iteration precludes outdated strategies. It’s now more important than ever for companies to adapt the way they work and make decisions.
In March of 2019, Alpha, the rapid consumer feedback platform, surveyed over 300 decision makers to discover their most significant challenges and most effective decision making processes. We discovered that the forces of change, both from the internal company organization and external market forces, have changed the nature of business decision making. 86.8% of respondents report that their work environment is in constant flux or lacking clear correct decisions, and 40% say that they’re motivated to change their decision making process because of changing market conditions.
Many companies have made progress to adopt data-driven decision making frameworks and launch new products and features faster. However, decision makers now face an overabundance of data inputs while remaining obligated to numerous stakeholders. The difference between a good decision and a bad decision is less clear than ever before.
Faced with this increasingly challenging decision making environment, it’s incumbent on companies to adapt if they want to gain and maintain market leadership. But adapting is not only important to Wall Street. 79.4% of respondents say that their ability to make good decisions is important or extremely important for their career advancement.
While much of the ink spilled on this topic since the beginning of the digital age has focused on buzz words such as “big data” and “agile”, our findings paint a more nuanced picture.
A central lesson that emerged from this report is that while having data is certainly necessary for good decision making, it’s by no means sufficient. There’s a striking gap between respondents wanting to use data to make decisions and actually using it. 91% say that it’s important or very important to make data-driven decisions, but only 57.4% often or almost always do so.
The gap could be partially attributed to the fact that while decision makers are motivated to make data-driven decisions and run experiments, their organizations don’t actually support them doing so. Decision makers are challenged by entrenched thinking, a lack of shared understanding of modern methodologies, and slow reactions to change.
In the digital age, good decision making entails taking more shots on goal and shortening iteration cycles. However, few decision makers are rewarded for such an approach. 82.9% of respondents say that their companies measure the success of a decision by the outcome that it achieved while only 33.2% assess based on the process or methodology used to make the decision.
In addition, even though many leaders espouse the benefits of empowering those closest to the problem to make decisions, senior executives take control all too frequently. 46.8% of respondents say that decisions are primarily made from the top down. This helps explain why 62% say that the most significant challenge that their teams face when trying to make good decisions is too much deliberation or slow reaction to change.
While this report reveals the challenges and frustrations that decision makers face today, it’s not a chronicle of doom and gloom. There is reason for optimism. Over 60% of respondents say that user feedback or experimentation have contributed to their most successful projects, and 37.1% say that they’ve incorporated more experimentation into their decision making process within the past twelve months.
Our findings indicate that decision makers have less of a need for a larger amount of data. Rather, they need the right data, faster along with the appropriate team structure and company culture to perform at their best. With the right resources, methodologies, and tools, decision makers can help their companies avoid the fate of companies how haven’t adapted to change, such as Toys R Us and Polaroid, and become the next Airbnb or Amazon.