Smarter Decisions at all Levels

It is challenging to reach smart organizational decisions in an uncertain and complex world.

In order to prepare organizations for current challenges, managers and organizational developers need to change their way of thinking. For an effective support of this process we introduce you the concept of the SMART-DECISION-Culture (SDC).

It is based on the insights from the newer system theory and the latest knowledge from neuroscience.

System Theory

Organization & Decision

The starting point of the SDC concept is the view on organizations as complex social systems. Seen from this perspective, the traditional assumption to causally explore and explain organizational phenomena is abandoned.
Organizations are communication systems. The most important communicative event in these systems is the decision. An organization exists as long as it makes decisions. As soon as no decisions are made, the organization disappears. In systems theory terms, a decision is only a genuine decision when subsequent decisions follow the taken decision. Many decisions in organizations can be considered to be statements of intent that do not entail any further decisions.

Employees and managers are not part of the communication system – as often assumed - they are the so-called relevant environments. They act as players of a game who make an important contribution to the organizational communication. The game with its rules does also exist without its players. Nevertheless, only their participation – their communicative contribution – brings the game to life. This fact has a major impact on the decision process in organizations. In order to consider the knowledge of the management and employees in decision-making processes, it has to be integrated into the communication process. If this is not the case, the knowledge is useless for the organization.

The strong independent existence of organizations has a determining impact on managers and their behavior. If the collectively embedded expectations are not met (also) by the management, the reaction shown by the organization can be unexpected and very strong. In turn, this reaction impacts the management and its role definition. The origin of this reaction is the culture. Unintentionally and unknowingly, it usually impacts the way how decisions are taken. Often, as a result, no smart decision are (or can be) made. Common cause is that available information does not flow into the decision-making process.

In the today’s complex world, it is no longer about making right or wrong decisions. It is about smart decisions. Also at the management level, it is no longer about making own, right decisions but to ensure that all relevant information that is available inside and outside the organization is fed into the ongoing communication process. Depending on how well designed this communication process is, it has an effect on the quality of the taken decision.

Organizational Culture

Culture is a buzzword comparable to a jelly. If you try to grab it, it slips out of your hand. What is culture? We define culture as a not decidable decision premise. Thus, game rules that are simply there and haven’t been explicitly decided, with major impact when disregarded. The stronger the reaction from the system, the more it can be assumed that it is about a cultural topic. Culture is something that cannot be seen or decided upon but still has a determining effect on the organization and persons in organizations.

It can reasonably be concluded that the informal something that we call culture, which is linked to emotions and not focused on a certain goal, that this something influences the way how decisions are made in an organization. Therefore, the sophisticated topic of organizational culture is not neglected but consciously addressed in the SDC concept. This invisible something can considerably support or impede the adoption of smart decisions.

Persons and Decisions

Neural Networks

Current neuroscience sees the human brain as a dynamic, self-organized super system, which consists of a variety of neurons (nerve cells). These neurons are closely linked to each other by synapses and form neural networks. The neural networks highly influence our mental processes: perceptions, actions, emotions and motivation.

Contrary to previous assumptions, the brain has the ability to change and to learn throughout an individual's life course (neural plasticity).The brain is understood here as an organ that has a similar function as a muscle.

Through the frequent activation of neural networks, i.e. by repeating certain perception, thinking and behavior patterns that are typical for the respective person, neural networks are strengthened throughout the life course. This increasingly leads to established paths, i.e. patterns of reaction and experience, which then run automatically and often are of unconscious character. Inversely, if a network is no longer used, it diminishes slowly and the person shows a certain behavior less frequently.

During the learning process, new neural networks are formed according to this principle. The more frequently the new behavior is practiced, the stronger becomes the connection. The more seldom the behavior is practiced, the weaker the neural connections. This means that new neural networks result in changed behavior and experience.

According to Roth, all memory performances have one thing in common: “They are based on changes in our brain that depend on our experience and form the foundation for learning.”[1]

New neural networks play a significant role when it comes to successfully meeting the challenges ahead. The SDC concept uses the brain as a resource- and solution-oriented organ and builds on the current neuroscientific findings. Accordingly, it supports the personal development process for managers and future managers with regard to their current tasks.

Affective Assessment System

The brain has an assessment function and identifies behaviors that harm or benefit the psychobiological well-being. A distinction is made between cognitive (rational/ mind) and affective (emotional/ feeling) assessment systems.

We can assume that all lived experiences (with situations or objects) as well as associated emotions and physical sensations are stored in the experience memory of the brain. In terms of affective assessment, the brain uses the stored experience to support a behavior that ensures the best possible psychobiological well-being. Therefore, the brain relies on stored experiences with situations and objects – the somatic markers. These markers react in milliseconds in the categories “good“ or “bad“ and lead to the corresponding feeling or physical sensation. We can thus sense positive and negative somatic markers.

Within the framework of the SDC concept, we particularly use the positive somatic markers to form neural networks as these markers are associated with positive, affective reactions and pleasant physical reactions. Thus, we utilize those resources that the managers already have at their disposal in order to develop adequate behaviors, based on a self-determined attitude.

The Psych in the Decision-Making Process

As already mentioned, the modern brain research provides us with knowledge about what happens in the head of a person when it comes to decision making. The basis for decisions is a completed assessment. The brain has two possibilities to evaluate situations:

  • It uses the mind (cognitive assessment system) or
  • the emotional experience memory (affective assessment system)

Both assessment systems are entirely different.

The mind operates slowly and thoroughly. It follows the law of the logic and rationality. The emotional experience memory reacts relatively quickly with vague feelings.

Ideally, the mind and the emotional experience memory are synchronized. A smart decision is brought about when the mind, emotions and experience are all balanced. Within the context of the SDC concept, this important aspects is given special consideration.

Team and Decisions

When talking about good management, one automatically thinks also about management teams. Often, there remains the strong conviction that successful company management is closely linked to a charismatic personality. Still, in order to reach sustainable decisions, the complexity of the tasks that need to be solved requires working and decision team in organizations.

Company success is more than ever associated with good interaction in the management team. The quality of decisions can be measured based on two observation points:

  • Has a smart decision been taken, which includes all available information, opinions and hypotheses?
  • Is the decision supported by the company and have further decisions been taken based on the first one?

The today’s complexity means that in many decision-making processes conflict of objectives and paradoxes have to be dealt with, which overwhelm single persons. It is self-explanatory that often contradictory options and interests collide. The prerequisite for good decisions is then to assess the different viewpoints and – in spite of any disagreements and interests – to reach sustainable decisions. This increases the chance that after taking the decision further decisions are made entailing the implementation of the first decision.

This process does not happen automatically, but requires suitable structures, processes, conventions, role definitions and a communication behavior, which is characterized by the balance between push and pull styles. All these aspects are effectively addressed in the SDC concept.

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[1] Roth, G. (2003). Fühlen, Denken, Handeln. Wie das Gehirn unser Verhalten steuert. Suhrkamp: Frankfurt am Main. p. 150.