How to make better decisions in uncertain times

by sravan ankaraju on December 13, 2009

in Execution

The McKinsey Quarterly article “Dynamic management: Better decisions in uncertain times” discusses general implementation approaches for helping individuals occupying pivotal roles to work collaboratively.

  • Learning by doing – Use scenario planning, decision trees, and stage gating to think differently about the future.
  • Workshop-based adult-learning techniques – Manage ambiguity and complexity by developing case studies to surface and debate alternative courses of actions.
  • Performance measurement – Peer-assessment techniques to measure how effectively executives are contributing to the success of others.
  • Surfacing critical issues early
  • Performing the necessary staff work – Use proven problem-solving approaches like Decision Trees, Probabilistic modeling, stage-gate investing, and scenario planning.
  • Changing how decisions are made – Redesign decision making processes to enable rapid surfacing and formal designation of issues considered critical.
  • Rethinking corporate budgeting processes – Adapt the budgeting process to make it more flexible – allow for range of outcomes, use rolling budgets to keep the plans current. Other alternatives include semiannual budgeting and financial-planning cycle; undertake scenario-based financial-contingency planning.

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