Over the past few years business strategy has been revolutionized by the use of analytics and business intelligence. So it is understandable that successful decision making would receive an equivalent reset.
Thankfully, one of the first books to examine strategy execution in a post-analytic world comes from a leader in business intelligence. Judgment Calls: 12 Stories of Big Decisions and The Teams That Got Them Right, by Thomas Davenport and Brook Manville, examines the businesses that are developing smarter cultures that lead to business success.
Davenport, a leading Babson College IT and business intelligence professor, co-authored a number of books on analytics, including one I reviewed for SBT, Analytics at Work. I requested a Judgment Calls review copy from Harvard Business Review when I heard about his latest effort. Its 12 cases implies an analytic address to the most limiting qualities that occur with decision management.
Learning From the Collective Now Means Profits Instead of Geekiness
The authors’ approach in Judgment Calls reveals decision making from a process and systematic view, called organizational judgment:
“The collective capacity to make good calls and wise moves when the need for them exceed that of any single leader’s direct control.”
Davenport and Manville note that four trends that will define good judgment making have emerged:
- The recognition that none of us is as smart as all of us.
- Tapping not only the wisdom of the crowd but the leadership of the crowd.
- The use of analytics to support and sometimes actually make decisions.
- Information technology is an enabler of the first three aspects.
The phrasing of the second concept fascinated me, because it captured the sentiment of current online human behavior. Success with content marketing, for example, is based on leadership the crowd places on the source. The more social shares of a blogpost or a pic imply a crowd’s conference of trust on a piece of material, that the author shows wisdom in what they produce.
Judgment Calls examines 12 cases from organizations probably more diverse than the data they collectively analyze. The organizations run the gamut from NASA, health care, and education. The cases are grouped into 4 segments.
Most likely, the case most relatable to a small business owner is the last one, a focus on a decision facing 1990′s beauty products start up, Tweezerman. The example showed that:
“There is an unusual power in people with complimentary skills working together for a common performance objective.”
Although large in size, organizations featured, such as Charlotte-Mecklenburg Schools, still provide useful examples to small businesses. They display that degree analytics and business intelligence has grown such that judgment capabilities can be examined to understand high-performing organizations.
The analysis reminds that personal calls, even from experience leaders, can be rightfully questioned:
“How can we make sure those calls are made well? Is it enough to choose smart leaders who seem to have people’s interest at heart, and trust their wisdom? Human judgment is frail and fettered, no matter which humans the judgment comes from.”
Some Leaders Challenge Data But For The Wrong Reasons
Given the above quote, I appreciated the authors’ note that the world has not changed for many business execs. Many are resistant to data that says to keep learning from collective sources. The authors share at the beginning how, despite notable advancement from analytics:
“…insecure senior execs are simply reminding themselves and insisting that only their judgment and decisions count. On social technologies, instead of figuring out how they can facilitate collaboration and group judgment, many firms still ban their usage altogether. One survey of chief information officers found that 54 percent ban all social media use at work (though it’s likely that many of their employees find a way to access Facebook anyway).”
Judgment Calls makes a strong effort to raise decision making into less of an individual basis and more of a cultural practice within a team. It makes a solid follow up to analytic books such as Jim Sterne’s Social Media Metrics, Performance Marketing with Google Analytics, and of course, one of Davenport’s earlier books Analytics at Work.
The authors note that businesses seeing results are:
“Consulting more people…adopting some form of collective leadership.”
It’s an understandable offshoot from the increase in analytics and business intelligence. While the material in Judgment Calls focuses on large enterprises, small business readers should take note of the examples to learn how their experiences can be better handled. After reading it, any reader’s decision making prowess will be improved.