If you're in charge of developing a strategy, you have probably wondered, "What is the strategic decision-making process?" Well, if you're not sure, let's look at OODA, SWOT analysis, and Power BI. The first step in strategic decision-making is to determine who will own the strategy. And who will be involved in the collaborative process? This decision is critical because it will determine how effectively the strategy is developed.
OODA (Observe, Orient, Decide, Act)
The OODA Loop, or "observe, orient, decide, act," is a process that enables managers to improve strategic decision-making by transforming ambiguity into advantage and risk into results. It is a systematic, cyclical decision-making process. In a complex situation, this approach can lead to better decisions that will improve the outcome.
The observe step identifies the problem or threat in the context of the situation. It also gathers information about the external environment, competitors, and the market. In this process, the entity should recognize that the world is constantly changing, and that all data is only a snapshot of current events. Hence, it is crucial to obtain information as quickly as possible. After gathering the necessary information, the next step is to evaluate the findings.
OODA's loop decision-making process enables organizations to continuously analyze and review scenarios in a continuous loop. This loop uses feedback from data points to make decisions based on the most relevant information. The loop starts with a clear understanding of the problem, gathers relevant data, develops a solution, tests it, and documents it.
The loop model is interactive, and involves the process of gathering information, forming hypotheses about competitor behavior, and acting on the selected approach. The loop model is continuously repeated, and aggressive application of the process gives a business an advantage over its competitors. It also prevents its competition from gaining an advantage over it. OODA's loop process does have a challenge, as teams often get stuck at "D." While this is normal, it can waste resources if not addressed in time.
SWOT analysis is a fundamental planning tool that helps organizations to analyze their strengths, weaknesses, opportunities, and threats. It helps in identifying the three core factors of an organization and helps to identify ways to address those factors in order to achieve success. The four key factors include internal resources, external competitors, and technological changes. Understanding your own SWOT analysis and those of your competitors' can help you maintain a competitive advantage.
While these factors give a business a competitive advantage, they can also hinder performance. A thorough SWOT analysis can reveal what strategic decisions are most likely to produce success. After the analysis, the company can choose the best path to pursue.
Data visualization using artificial intelligence (AI)
A CFO has a tough job to perform. He/ She must make strategic decisions on cost-cutting, profitability, and business growth. Unfortunately, data and reporting structures can be fragmented and incomplete, making it difficult to make informed decisions. AI removes those barriers to data and reports, and its seamless integration into the existing business environment makes analytics quick and easy to adopt.
Also, it can be used to visualize data and present it to decisionmakers in various ways. Using AI to make better decisions can boost a business's revenue and resilience. For example, a CFO can create a dashboard with a few KPIs and drill down to the county level, without having to spend hours analyzing a data set. A point to note is that, use data visualization AI software only after validating its authenticity and accuracy.
How fast a decision is made and how good is that decision determines how far the business will thrive.
- Kaizen for pharmaceutical, medical device and biotech industries
- How to cut costs strategically using Kaizen
- Streamline processes and workflows with Gemba Walk.
- Top Ten Strategic Decision-Making Tools for Operational Excellence
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Categories: Strategy | Leadership
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