Adopting a Pragmatic Decision Intelligence Framework
Effective value delivery from asset management hinges on the quality of decisions made throughout the organization. Decisions play a pivotal role in ISO 5500X standards, and the GFMAM Asset Management Landscape, but the question remains — how much do decisions truly impact outcomes?
Research from the Harvard Business Review (HBR), the Society of Decision Professionals (SDP), and the Product Development and Management Association (PDMA) demonstrates the significant impact decision-making has on organizational effectiveness in delivering business results.
From this evidence, we can infer two critical points. First, substantial value is at stake due to suboptimal decision-making, leading to significant value leakage. The vast disparity in value delivered between top and average performers underscores decision-making’s often unseen but impactful role. Second, more than goal setting is required. As James Clear, author of Atomic Habits says, “You do not rise to the level of your goals; you fall to the level of your systems.” Organizations must infuse more structure and rigour into their decision-making system to achieve desired results. We get the results we deserve, different from what we want.
Every organization operates with people, processes, and technology. What sets asset-intensive organizations apart from non-asset-intensive organizations is the application of those essentials through their assets to deliver value. How is that done? Leaders' deployment choices to allocate or reallocate their vast and scarce resources are central to operational and asset management performance effectiveness.
A clear and intentional decision intelligence framework is crucial for organizations aspiring to best practices in decision management. Data and analytics, while essential, are insufficient on their own. The synergy of people, processes, technology, and a decision management framework is necessary to extract maximum value from assets. Decisions act as the connective tissue that binds everything together.
There are key principles involved in a best decision intelligence practice. The organization must emphasize the most important decision you make is how you make your decisions. Adopting a decision intelligence framework is the one decision that launches a thousand more quality decisions.
Subscribe to the DIKDAR principle (Data > Information > Knowledge > Decisions > Action > Results) but apply the principle backwards, as RADKID. Start with the desired results, then centre on the decisions required to achieve those goals and solve for the requisite knowledge, information/analytics and valuable data.
Building and implementing a functional decision intelligence framework involves eight key elements contributing to quality decisions and consistent positive outcomes:
Value Framework — Operations and asset management is about the pursuit of value. What exactly does that look like in your organization? And what is the priority in inevitable tradeoffs? There’s financial value from production and revenue sales, service cost and cost of goods sold. There’s non-financial value regarding safety and environmental performance, customer service, reputation to stakeholders, and social responsibility. Your mileage on labels may vary, but a shared understanding of what the organization truly values in pursuing business results should be shared.
A3 PSDM Canvas — There are many problem-solving and decision-making methods available. I prefer the A3 method, a lean technique developed by Toyota and named for the paper size, because it all fits on one sheet of 11” x 17” paper. This method is universal in handling any problem regardless of its complexity. It forces users to be very clear and concise while not skipping any steps in problem-solving or decision-making. The canvas provides structure while allowing the users to be creative in delivering content to ensure a quality decision is made, assisted by a prompt wizard to guide the right questions to be answered within each step.
Decision Identification — What are the crucial decisions in operations and asset management, and how are they identified? You can’t decide if it’s not apparent a decision should be made. A systematic questioning approach helps the organization uncover problems worth solving, which, with decisions, become solutions worth implementing. Fortunately, a finite number of known important decision types are to be made, as identified in the Landscape’s 39 asset management subjects. We should codify those limited decision types and offer a canvas with the who, what, when, where, why, how, and how much to enable the best decision possible at every opportunity.
Frames & Models — We can take those crucial decisions and offer problem frames and solution models tailored to each decision type. This template assures the proper rigour is applied for the situation inputs, analysis, and evaluation with the best available evidence-based data and experiential judgment-based knowledge of several creative solution alternatives against multiple value objectives. This approach also characterizes uncertainties and assesses the value of information to reduce uncertainty and increase confidence where it is feasible and worth doing.
Head, Heart, & Gut — We don’t make all our decisions with cold, hard logic, only the head. We also make it with our heart, which means alignment with goals, objectives and strategies while considering our ability to execute and the organization’s willingness to adapt to any necessary change. Finally, while we apply the requisite decision structure and rigour, we can’t ignore the decision-maker's gut instinct or intuition if we challenge its sources and seek to minimize undue biases and blind spots.
Decision-Action-Results Tracking — Once made, the decision and rationale should be articulated to all stakeholders by tracking action plans and measures for work execution, objective KPIs, and value delivered over time to determine if the results meet expectations.
Competent Team — Applying a RAPID model (Recommend, Agree, Perform, Input, Decide) provides clear transparency on decision accountabilities and reduces ambiguity. Problem-solvers must be capable of utilizing suitable frames and models to perform and be calibrated to incorporate uncertainty into their assessments. Decision-makers must be able to assess the problem-solving and the requisite authority and control to direct solution resources. All personnel should develop and improve their personal and organizational decision-making track records.
Applied Learning — After implementing the decision, assess whether a quality decision was made and if the expected outcome was achieved. You can have poor decisions with good or bad outcomes, just as you can have good or bad outcomes with good decisions. Did the inputs, analysis and evaluations pan out within confidence intervals? Was the decision and change accepted? Were the action plans executed? What can we learn and apply to the next set of decisions? How do we share across the organization?
What does it take to implement the decision intelligence framework? The practice includes the following:
- Playbook as a distilled business process
- Training to develop decision-making competencies enhanced by 1:1 coaching
- Software tool as a decision management platform and registry
- Facilitation services in group settings
Implementing the decision intelligence framework for a few key decision types takes less than twelve weeks. This significantly boosts the organization’s capability for problem-solving practitioners and decision-making leaders. The framework can be operationalized with modest coaching and facilitating to expand the practice to additional decision types across the enterprise.
The modest investment has incredible ROI potential, particularly with previous investments in data quality management and analytics from our digital transformations. Most organizations already have what is required to get started; the decision intelligence framework amplifies the capability potential of your organization’s people, processes, and technologies, shifting to higher-value activities and resulting in better asset management.
With the foundational decision intelligence framework firmly in place, there’s an opportunity to extend to other critical decision-intensive operational business practices such as operations strategy deployment, operational risk management, asset condition management, asset performance management and asset investment planning.
Organizations seeking high operations and asset management performance will adopt this practical decision intelligence framework as a best practice to leverage improved decision-making to create more value by reducing that wicked villain, value leakage. The key to operational excellence results is more better decisions.
