How Strategic Decision Making & Action Planning Helps Innovation (5/5)

Step 5 in the Guide to Achieving Strategic Breakthroughs Series

A strategy without action is merely a document, while action without a clear strategic plan is aimless.

Developing a good and effective business innovation strategy involves making informed choices to pursue one path over another. It’s as much about strategic decision-making as it is about ideation. This is where decision-making meets action-planning, stepping beyond the design phase armed with potential solutions for our challenges.

Contrary to the common perception that there is a logical method in strategic decision-making, the essence of strategy is about directing resources and efforts towards objectives that promise the most significant impact. But the million-dollar question remains: how can you be sure you’re making the right choice?

The answer is simple: you can’t.

In this post, the last in the series on the journey towards business innovation, we will look at the integration of strategic decision-making and action planning in business innovation with tips on how to translate strategic decisions into actionable steps.

The challenge of choosing

Strategy is inherently fraught with uncertainty, this is especially true when the outcome of the strategy is business innovation or transformation — by nature innovation is unstable. No matter how well you anticipate and prepare, the outcome of any strategic decision is unpredictable. This uncertainty which is a fundamental aspect of strategy, makes the decision-making process both daunting and critical. With each choice comes a nice dose of accountability, a responsibility many leaders shy away from, fearing the repercussions of a wrong decision.

This fear often leads to paralysis by analysis, as organisations overcomplicate the decision-making process with endless frameworks and systems, all in the hope of making the ‘right’ choice easier to spot. At its core, strategic decision-making is about selecting the path that best solves the diagnosed problem the business is facing, leveraging its resources for a variety of possible solutions, and navigating the external environments response to that problem. It’s the crucial step that transforms a well-crafted strategy into actionable steps, setting the direction and cementing the commitment necessary for success.

Two main reasons underscore the importance of the decision-making and action-planning phase in strategy development.

First, a definitive decision acts as a beacon for the entire organisation, aligning departments, teams, and individuals under a unified vision and objectives. This alignment is vital for ensuring concerted efforts towards the strategic goals, maximising both efficiency and effectiveness in implementation.

Second, decision-making is fundamentally about commitment. Choosing a specific direction means dedicating resources, time, and energy to that vision. This commitment is essential for propelling collective action towards achieving strategic objectives. Without this commitment, strategies risk remaining as lofty ideas rather than evolving into tangible action plans.

Embracing collaborative decision-making

Given the complex, often illogical nature of strategic decision-making, how do we navigate this maze?

One way to lessen the load of choice is by embracing collaborative or participatory decision making. By pooling collective wisdom, experiences and assumptions together, teams can mitigate individual biases, leveraging diverse perspectives to identify the most viable strategic path.

A Gallup study revealed that companies with highly engaged workforces are 21% more profitable than those with low engagement levels. Part of this engagement comes from transparent and inclusive decision-making processes, where employees feel their opinions are valued.

In workshops we employ techniques such as dot voting to help distill group wisdom into clear, actionable priorities. It also stands out as a practical tool for mitigating the complex and biased nature of decision-making.

There are different methods of dot voting that can eliminate decision making complexities at varying degrees.

• Traditional Dot Voting (Single Dot Allocation) involves each participant receiving a limited number of dots (typically one to three) to allocate to their preferred options among the presented ideas.

• Heatmapping (Variable Dot Allocation) allows participants more flexibility by providing them with a set number of dots that they can distribute across different options according to their preference intensity. This approach enables a more nuanced understanding of group priorities by revealing not just which options are popular, but how strongly they are favoured.

• Multi-round Dot Voting consists of conducting successive rounds of voting, eliminating the least popular options after each round to gradually narrow down the choices. This iterative process encourages deeper consideration and consensus-building, as participants refine their preferences based on the evolving landscape of remaining options, ultimately leading to a concentrated focus on the most agreed-upon ideas.

Turning decisions into coherent actions

The use of collaboratively generated decisions only makes choices easier, a final set of coherent actions need to be made. To turn a variety of best choices and prioritise and rank them, a simply activity we like to use is the the effort-impact matrix.

The Effort-Impact Matrix is a strategic tool used to categorise tasks or initiatives based on the effort they require and the impact they are expected to have. This matrix typically divides into four quadrants based on importance and urgency.

Another useful method is by Task Sizing which involves estimating the size or effort required for each task, often using relative measures (such as T-shirt sizes: S, M, L ).

Both of these methods aids in translating strategic decisions into actionable steps in several ways:

1. Prioritisation: By evaluating tasks based on their impact and required effort, teams can prioritise actions that offer the most value for the least amount of work.
2. Resource Allocation: Understanding the effort involved in each initiative allows for better planning and allocation of resources.
3. Strategic Alignment: The matrix helps ensure that the selected initiatives align with the broader strategic objectives. By visually categorising tasks, it becomes easier to see whether efforts are concentrated on high-impact activities that support the organisation’s goals.
4. Team Engagement: Presenting tasks within the matrix framework can help teams understand the rationale behind priorities, fostering buy-in and engagement.

A ‘Decider‘ can’t be avoided

The use of collaboratively generated decisions only makes choices easier, the final decision still has to be made. To ensure that the final decision is aligned with other strategic factors such as financial, operational and competitive perspectives, the Decider, usually the most senior or experienced in the group still must make a final choice to provide closure and direction.

After the group voting is complete, the Decider reviews the outcomes to understand the team’s preferences. Then, using their authority and possibly considering additional factors (such as strategic alignment, resources, feasibility, etc.), the Decider makes the final choice. This decision may align with the group’s top choice or might diverge based on broader considerations.

This method combines the benefits of collective input with the efficiency of top-down decision-making, ensuring that a diverse range of perspectives is considered before arriving at a strategically sound conclusion. However, it’s important for the Decider to communicate the rationale behind their decision transparently to maintain trust and alignment within the team.

Even though the road to effective strategic decision-making is fraught with challenges, understanding its importance and embracing collaborative approaches can illuminate the path to innovation and success.

We need to keep in mind that the journey of innovation is cyclical and continuous. Each step builds upon the last, creating a dynamic process of growth and improvement. By staying committed to these principles, your organization can not only adapt to the evolving landscape of business but also lead the charge in creating the future.