A client of mine recently shared his method for making important decisions. For everything from key business projects to personal choices of where to holiday or what car to buy, he swears by collecting the data and applying the cause-and-effect matrix beloved of Six Sigma practitioners.
For business decisions it was hard to fault. But for his personal life his revelation was greeted by mild hilarity. So why did we think it (or indeed he) was so odd? Perhaps because in our personal lives we recognise that decisions don’t always happen formally in meetings, nor are they the work of a single moment of decision, and we hardly pretend they are scientific, rational, and free of emotions.
In short, personal decisions are not transactions; they are complex and hard-to-explain processes by which we move towards our goals. (This is supported by several rich veins of research — see references below.) So, knowing this, why would we expect business decisions to be any different? Sure, a certain theater of formality surrounds the endorsement of decisions in business, but more often than not the same heady mixture of politics, intuition, routines, and, hopefully, learning surrounds their birth and implementation.
Recently I have read several interesting pieces about the future of corporate sustainability reporting (CSR). Some proclaim that CSR reporting is dead because sceptical stakeholders have grown weary of the glossy brochures, and selective information makes informed decision making impossible. Others say that integrated reporting will be our salvation because, by delivering sustainability information alongside financial data, it will lead to better and more sustainable business decisions.
In my view, both accounts miss the point: In the first case, the painstaking and detailed work carried out by sustainability practitioners to support their corporate reports is not a waste of time, but much of the value created is in the learning process of engaging internal and external stakeholders to create the output and in influencing key business processes such as product design.
In the case of integrated reports, and speaking as a lifelong standards geek, I can only support the standardization and integration agendas, but I am under no illusions that they will automatically lead to better or more sustainable business decisions. This can only be achieved when those who champion sustainability understand their own internal landscapes of decision making and can deliver the right information to the right people at the right time to influence and innovate through those key business processes.
I could have this all wrong, in which case we may all be choosing our Christmas presents this year using Six Sigma (no socks please!). But in case I’m not, and before we throw our new inheritance of detailed sustainability data out the window altogether, maybe we should look again at the way in which we bring this wealth of data to life to influence more sustainable decision making in the corporate sphere.
Naturalistic Decision Making
Edited by Caroline E. Zsambok, Gary Klein
The Upside of Irrationality
The Unexpected Benefits of Defying Logic at Work and at Home
By Dan Ariely