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Decision-making and the practitioner

decision-making

McKinsey has shared three articles with insights into effective decision-making.

It is not surprising that McKinsey’s surveys of executives found widespread dissatisfaction with both the quality and speed of decision-making. Yet, in today’s world it is essential to make informed and intelligent decisions without unnecessary delay.

The articles are:

What may surprise you is that McKinsey doesn’t talk about either risk or the quality of information!

There’s a great opportunity for risk and audit practitioners.

If the success of your organization hinges on the quality of decision-making (and it does), then what are you doing to ensure it is as good as it can be?

Surely, effective decisions at the speed of the business (and of risk) require:

  • Insight that is reliable and timely on what might happen and how it might affect the achievement of objectives
  • Quality information on the current state
  • An understanding of the enterprise goals and objectives
  • Guidance on which risks should be taken and by whom (for example, desired rate of return; delegation of authorities; risk criteria; how to assess the net effect of what might happen, considering both the upside and downside; processes to include everybody who needs to be involved in the decision; and, how to overcome cognitive and other bias)

The risk practitioner should:

  • Help provide quality and timely information on what might happen, addressing all significant potential effects on objectives (both good and bad)
  • Make sure decision-makers know when there are issues with the quality of the information
  • Use their tools to help decision-makers evaluate and select from available options

The audit practitioner should:

  • Provide assurance on all of the above
  • Share their advice and insight on how to improve decision-making, both its quality and speed

What do you think?

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Norman D. Marks, CPA, CRMA

Norman D. Marks is an Author, Evangelist and Mentor for Better Run Business, as well as an OCEG Fellow and Honorary Fellow of the Institute of Risk Management. Mr. Marks has been a practitioner and thought leader in internal audit, risk management, and governance for a long time. He has led large and small internal audit departments, been a Chief Risk Officer and Chief Compliance Officer, and managed IT Security and governance functions. Read more
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