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Friday, January 09, 2009

How Companies Make Good Decisions

Companies get a lot of advice about how to make good decisions. Which decision-making disciplines really make a difference?

The good folks at McKinsey have some insights. (You'll need to register to read the entire article, but it's free.)

Key findings of their survey:
  • More than three-quarters of investments were aimed at revenue growth, and among decisions related to human resources, the majority aimed to improve efficiency or productivity.
  • A majority of decisions were undertaken at the request of the CEO or the executive committee
  • More decisions were made outside an annual planning process than within one.
  • Nearly two-thirds of respondents say they expected their decision to pay off within two years of implementation.
  • Operations executives had significant influence on only about a third of the most financially unsuccessful decisions, reinforcing findings from other surveys that companies frequently overlook execution when making decisions.

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