It is one of the paradoxes of our times, that despite having access to almost unlimited and instantaneous information, we are no more effective at making business decisions now than we were 50 years ago. If anything, the sheer quantity and immediacy of information these days leaves quite a few decision makers wondering what the best course of action should be.

Is your company's decision-making system allowing you to make key business decisions as fast and efficiently as your competitors?

A robust and well executed decision-making process will enable a team to attain peak performance and usually includes some of the following key attributes:

  • Reason. Is there clarity within the organization as to why any specific decision is being made? Can all team members clearly explain the purpose of the decision and the expected outcomes?
  • Transparency and consistency. Does the criteria used in the decision-making process reflect weighting and underlying values which are evident from the data being used? The data being considered should be clearly actionable.
  • Scalability. Can the decision-making process continue to be used as the business grows?
  • Efficiency. Is the decision process one which enables rapid response and quick decision making if necessary? Can decisions be made in real time? I have recently worked with a team which has perfected this attribute. It has a keen understanding of the balance between an ideal decision using all of the facts available, and a decision which has to be made in a fast paced environment based on sufficient, but not all of the facts.
  • Commitment to Action. Once a decision has been made, can the team move ahead with execution and/or implementation without hesitation or further follow up.

The essential building block on which a business decision-making process is based, is the Management Reporting System (MRS). A well thought out and designed MRS will enable an organization to quickly assess the relevant actionable data to arrive at a decision.

Some of the hallmarks of 'best-in-class' management reporting systems include:

  • Dashboard - like functionality. Like modern military pilots where key performance data is displayed on the screen in front of the pilot, the information being presented needs to be evident to team members without their having to go out of their way to obtain it.
  • Modeling. 'What if' forecasting adds a significant depth of understanding and alternative action visualization. This should include the interactive ability to adjust the assumptions in the model.
  • Benchmarking. The information provided should include analysis of industry and competitive metrics to highlight the opportunities for improving performance.
  • Risk management. The team needs to have a clear picture of the cost of risk mitigation strategies.
  • Exception Reporting. In an environment where the business is tracking large volumes of base data, the reporting system should incorporate performance parameters where results which are outside of these levels are flagged and highlighted.

Humans do not always feel comfortable with change, and the management reporting and decision-making processes used by teams are no exception. They tend to be based on 'the way we have always looked at it', or are 'limited by the capabilities of our software'.

Peter Drucker once stated, "Knowledge has to be improved, challenged and increased constantly, or it vanishes."

In this Twitter era, this has never been more true.

Hotel Solutions Partnership offers specialist hotel consultancy services to hotel owners, operators, brands, developers, lenders and investors around the World. Hotel Solutions Partnership is a hand-picked network of experts. Between us, we have expertise in more than 75 disciplines, covering all the elements involved in running a successful hotel or hospitality business in today's globally competitive and evolving environment. Click here to learn more.

John Healy
Associate
+1 (310) 985 4221
The Hotel Solutions Partnership

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