Cloverpop Decision Intelligence Blog

Decision IQ Study Finds Only 15 Percent Of Companies Are Decision Leaders – Here’s How The Rest Can Catch Up

Written by Erik Larson | Mar 27, 2023 2:30:00 PM

Our recent Decision IQ research found that fewer that one in six companies have a powerful combination of consistently strong decision-making processes, excellent execution and outstanding decision outcomes. So how can other companies catch up?

As the new research white paper details, the answer to that question depends on each company’s decision-making maturity level. Disclosure: I researched this while co-founder and Chief Product Officer of the Cloverpop decision intelligence platform.

The research buckets companies into four Decision IQ maturity levels:

  • Leaders – the top 15 percent: These companies are strong in all aspects of the decision-making process with reliable decision outcomes.
  • Challengers – the next 25 percent: These companies have relatively strong decision processes and execution but with less predictable outcomes due to slower, less empowered, unoptimized decision-making.
  • Up-And-Comers – the middle 20 percent: These companies have average decision processes, execution and outcomes, with more pronounced struggles than Challengers face, including a lack of consistent frameworks.
  • Stragglers – the bottom 40 percent: Finally, the last and largest group of companies have significant, often profound, gaps in decision-making processes and significantly less reliable decision outcomes.

Just like learning a new sport, companies at each level of maturity must focus on the right skills for their current capabilities. Beginner skiers start on bunny slopes, not black diamonds, while advanced skiers never become experts if they don’t push themselves on ever more challenging runs.

Working Decision-Back to Level Up Decision IQ

Taking a decision-back approach is a powerful tool for increasing a company’s Decision IQ. Working decision-back involves creating a map of critical decisions required to achieve business goals and aligning employees around efficient decision-making processes supported by relevant data and insights. This is done in four steps:

  1. For each business goal, map every critical decision across the relevant functions and departments.
  2. For each critical decision, create a complete decision tree of key business questions, insights and analyses that tie back to the decision.
  3. For each decision tree, assign stakeholders required to give input to the decision and decision-makers responsible for the decision result.
  4. For each decision outcome, do a post-mortem to reflect on what went right and wrong to drive continuous improvement.

This approach puts predictable, fast, high-quality decision processes in place by working back from business goals to the decisions that drive those goals and then to the people and analysis required for those decisions.

However, while this comprehensive decision-back strategy is a good target for leading companies, the reality is that most are not ready for such an advanced approach. Companies at lower Decision IQ maturity levels require phased strategies to level up.

Stragglers – Start With A Single Repeatable Decision

Stragglers face a potentially overwhelming array of decision challenges with relatively few examples of excellence to hold up as models. Thus, a tight focus is best to demonstrate success and then scale from there.

  1. Start with a single repeatable decision, such as project greenlighting, complex RFP responses or IT architecture decisions.
  2. Work decision-back to create a structured framework of questions to be answered, stakeholders who need to be involved, and analyses required. 
  3. Use that framework to track decision results and learn from patterns over time. Meaningful insights often arise after recording as few as ten decisions.
  4. Use the resulting learning as a success story to build momentum and expand the effort to several more repeatable decisions.

There are no shortcuts to rising above the difficulties that Stragglers face. Instead, it requires a disciplined effort to demonstrate and replicate success decision-by-decision.

Up-And-Comers – Conquer A Complete Decision-Driven Process

Up-And-Comer companies have scattered examples of successful decision-making that set the stage for significant improvement if they can tie those examples together across more complex decision-driven processes.

  1. Start by identifying a repeatable decision-driven process that is matrixed across organizational siloes – like Innovation, Integrated Business Planning or Brand Health – to involve networks of people and catalyze broader change. 
  2. For each decision in the process, work decision-back to create a structured framework of questions to be answered, stakeholders who need to be involved, and analyses required. 
  3. Use that framework to track decision results and learn from patterns over time. Meaningful insights often arise after only a handful of completed decision processes.
  4. Use the results as a success story to build momentum and expand the effort to several more repeatable decision-driven processes.

It’s important to note that while decision Speed stands out as a widely felt and urgent problem facing Up-And-Comers, simply urging people to go faster rarely works. Instead, the famous Navy SEAL adage that “slow is smooth and smooth is fast” holds. Doing the slow work up front to structure and track key decision-driven processes unlocks the improvements required to achieve next-level speed.

Challengers – Scale To All Critical Decision-Driven Processes For Business Goals

Challengers are on the cusp of true decision excellence. They already have many robust decision processes but lack the learning and improving processes required to institutionalize consistently successful decision outcomes. Becoming a Leader requires building a learning organization that drives the Decision IQ flywheel over time.

  1. Start by identifying the organization's most important business goal and work decision-back to identify all the critical decisions that support it. Place a particular emphasis on repeatable decision-driven processes.
  2. Work decision-back to create a structured framework of questions to be answered, stakeholders who need to be involved, and analyses required. 
  3. Use that framework to track decision results and learn from patterns over time. Meaningful insights often arise after as few as ten decisions have been recorded.
  4. Share lessons learned across different decision-making teams and measure decision-making success systematically, like any other business activity, putting specific metrics in place to drive strong decision outcomes.

What gets measured gets managed. Challengers can use that business mantra to nudge their companies’ Decision IQ into the Leader category by measuring key decision results and decision-making process metrics one business goal at a time.

This article was originally published in Forbes.