In reflecting on the past week I am blown away by the coincidental coherence between my experience this week and the readings. I have always found the readings in this course particularly valuable as they are so relevant to the practical experience we are gaining in the functioning of our teams. Clearly Peter has selected readings which generally correspond to the concepts and questions relevant to whatever activity we have been focussed on from week to week. It was more by chance however that this weeks readings directly shed light on a very powerful realization I had which was discovering the value of an analytical fact based approach to decision making.
One significant challenge we faced as a team was ensuring there are positive and predictable outcomes from the business decision we make each week. We have often had a general understanding of which areas of performance need improving and have made changes which attempt to stimulate such improvements, but more than often we have just been guessing when it comes to determining how much of each factor to change, and whether the factors we change will definitely have the desired outcomes. For example, in attempting to increase quality we have often just spent more and more money on quality systems technology and preventative maintenance. In trying to increase sales we have resorted strongly to increasing advertising and PR. This approach to decision making got us into a position of having really high costs without a corresponding increase in the desired outcomes.
At the beginning of this week myself and a few other team members made greater effort to deeply analyse the complexity of input factors, costs, revenues, ratios, suggestions and scenarios in order to be better positioned to make fact based decisions. After deeper than usual analysis we were able to identify some much needed changes and for once were able to base these changes on numerical evidence which supports reasoning. For example, we realised that in order for our racer sales to actually cover costs we needed to more than half spending on advertising and PR for those products. Simple but crucial things like this were often overlooked because we were basing decision largely on theoretical conceptions and guesses rather than quantifiable reasoning. The outcome from our decision this week ended up being really positive. We managed to recover from significant debt and are now in a position to gain significant profit on the next turnover and begin to recover our share value.
Having gone through this learning process this week I am thrilled to be able to relate my experience to the readings again. Davenport (2006) suggests that we know we are adopting an analytical approach we we "treat fact-based decision making not only as a best practice but also as a part of the culture that's constantly emphasized and communicated by senior executives." This is an approach and method that I hope to adopt more strongly moving forward. I will as usual share these thoughts with my team mates and suggest we all give added attention to deeper analysis of data relevant to our fields of profession so as to make decisions which are more likely to be tied to positive intended outcomes.
Davenport, T. H. (2006). Competing on analytics. Harvard Business Review, 84(1), 98--107.