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Analysis Paralysis

The volume of available information for management decision-making is increasing at an exponential rate virtually daily. If you feel like you are buried in reports, you probably are! All this data can serve as a useful tool to help you make critical management decisions, or conversely, serve as a quagmire to get thoroughly stuck in, slowing your decisions to a crawl.
If you feel your company is starting to move more slowly than you would like on critical decisions, it may be time to step back, take a deep breath, and decide three things. First, exactly what are the most critical decisions your company must make? Second, what data is truly needed for those decisions? And finally, who is the logical person within your organization to be making those decisions?

We will specifically deal with executive level decisions in this article, but the same principals and techniques apply to every staff person’s job in your organization. As you and your staff think through your critical decisions, keep an eye out for regular decisions that could be automated. In the ideal environment, automation of routine decisions free up valuable time for non-routine and more complex decisions.

To help you identify critical decisions, start by making a list of all your decisions. Begin with daily decisions, then move on to weekly, monthly, occasional, etc. Your list may include decisions such as customer pricing, vendor pricing and buying, capital equipment, personnel issues (be specific), sites, expansion, etc. At this point, your objective is to have the most complete list you can, so make it long!

Next, rate each decision in terms of its value to the ongoing operations and profitability of your company using this 1 through 5 scale:

5 = absolutely critical for company survival and profitable operations

4 = direct impact on profits

3 = indirect impact on profits

2 = no damage to profits if not done

1 = totally unnecessary

If after assigning points to each item on your list, you find you ranked everything a 5, challenge yourself to relook at your rankings. You are likely overestimating the importance of many decisions.

Next, beginning with your 5-rated decisions, use a matrix similar to the one above to identify exactly what data is needed to make those decisions and who is the source for that data. Boil it down to exactly what you need, no more and no less. The sample matrix above has just three lines for data sources, but use the number you need for each decision.

Once you’ve identified the data sources for all your level 5 decisions and the person that has that data , it’s time to assign responsibility for each critical decision. Just because you’ve made these decisions in the past, it doesn’t mean you should be making them in the future! Particularly when there is a single person who is the data source for all data needed for the decision, it may be completely logical to have that person responsible for the decision. That means one less thing on your plate!

In addition, carefully scrutinize each decision for automation possibilities. One company that used this decision-matrix process realized they were spending tons of time on fuel pricing. By setting up a software program that automatically captured fuel price changes on a real time basis, factored in delivery costs to all locations, and tracked competitor pricing directly by local manager input, they eliminated rack choices and pricing in a single software solution! Obviously, this was a large operation where the initial outlay was cost-effective. This expenditure may not be possible for small marketers, but the idea is valid. Challenge yourself to find automation solutions!

Once you’ve effectively tackled your level 5 decisions, complete matrices for level 4 and then level 3 decisions, delegating and automating appropriately.

For levels 2 and 1, in all likelihood you should eliminate your involvement with them and therfore won’t need two complete a matrix.

By the end of this process, you should have handed off many of your decision matrices to others in your organization. You will then be left with a succinct list of the data needed to make personal critical decisions and who you get that data from. Now here’s the hard part.

You must give up all that other data you get, all those reports that aren’t needed for your own personal critical decisions. In some cases, the data will go to other staff. In many cases, the data should be scrapped. If you want to get really radical, stop all the reports and just wait to see who screams for what!

This data and report elimination can be painful. It’s a bit like cleaning the old clothes out of a closet. We all want to hold on to the familiar. Just remember how good it feels, however, when you’re done. The old clothes are out the door and the remaining choices are easier. The same will happen at workk. By paring down the data, you’ll be out of analysis paralysis.

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