Why decision intelligence is crucial for a career in digital entrerprises
While decision intelligence is crucial everywhere, it is a critical capability required in a digital enterprise where all sorts of data, information or knowledge are the only resources that can create a competitive advantage
nIn 2018, Google defined “Decision Intelligence” as a key element of further competing in an increasingly digital economy and society. Cassie Kozyrkov, Chief Decision Scientist at Google wrote in the same year: “Decision intelligence is a new academic discipline concerned with all aspects of selecting between options. It brings together the best of applied data science, social science, and managerial science into a unified field that helps people use data to improve their lives, their businesses, and the world around them.”
Why go Google and other tech companies like Alibaba, best known for their capabilities to deal with big data and artificial intelligence, put suddenly such a strong emphasis ‘old-fashioned’ social and managerial sciences?
An answer might be that the business environments of companies around the world are progressively becoming more volatile, uncertain, complex and ambiguous, often denoted by the acronym ‘VUCA’. In such a VUCA world, the business models of all sorts of companies are increasingly challenged by developments such as swift policy changes, fast macro-economic and social trends as well as disruptive technological innovations and advancements. One such major disruptive development is the shift to an increasingly knowledge-based and digitalized society and economy, also in India.
DECISION INTELLIGENCE AS THE FIT BETWEEN INFORMATION REQUIREMENTS AND INFORMATION PROCESSING CAPACITIES
In such dynamic environments, the information requirements of senior executives and other managers to formulate competitive strategies are exacerbated. Senior executives and other decision makers increasingly rely on big data-driven approaches.
At the same time, the way individuals, groups, organizations, and industries work and collaborate are being transformed by the capacity to store, communicate, and compute information – resulting in new and different types of digital enterprises. However, with an almost unlimited access to an array of information sources, senior executives and their middle managers also face a host of challenges, such as potential information overloads leading to biases in judgements, costs associated with managing vast information, and the risk of being distracted from truly relevant information. From a career perspective, any future leader in a digital enterprise must therefore be proficient at filtering insights that really matter from the information (over)loads they are exposed to.
Almost 30 years ago, scholars had already identified that a misfit between the information requirements of a company and the way it gathers and processes information increases the likelihood of accidentally neglecting relevant factors, filtering out important information, or relying on misleading clues.
Recent research has further empirically confirmed that a better fit between the various levels of information requirements of a company and its information processing capacities leads to superior levels of strategic insights, and subsequently to firm performance. The same research also confirmed that there exist different ideal information gathering and processing profiles depending on the VUCA environment a company operates in. However, today’s reality for most executives is still well described by what Prof. James G. March wrote already 25 years ago: “Decision makers and organizations (a) gather information but do not use it, (b) ask for more and ignore it, (c) make decisions first and look for relevant information afterwards, and (d) gather and process a great deal of information that has little or no relevance to decisions”.
DECISION INTELLIGENCE COMBINES MANAGERIAL & SOCIAL SCIENCES WITH DATA SCIENCES
Some years ago, we have therefore developed the Decision Intelligence Navigatortm to support companies in achieving and sustaining competitive advantages in a VUCA world. It stands for a different perspective when thinking about strategic analyses and the creation of competitive advantages – especially for digital enterprises which often face “the winnertakes-it-all” markets and where any strategic mistake can ruin the company. Although Decision Intelligence is pioneered by tech giants like Google or Alibaba it is less about data analytics or artificial intelligence but about the capability to combine the right analysis frameworks from social & managerial sciences or engineering with the most suitable information gathering and processing solutions.
According to our experience with multinationals, SMES and start-ups the effective application of Decision Intelligence in a company builds on the four elements of the Decision Intelligence Navigatortm:
•DECISION CONTEXT: Do the executives in a company understand the decision challenges they face and sufficiently reflect on what kind of frameworks and intelligence (data, information, knowledge) they need?
•FRAMEWORK PROFICIENCY: Do executives master enough social sciences and managerial frameworks to select the most appropriate analysis concepts for any decision challenge they face?
•INTELLIGENCE ACCESS: Does a company provide access to the necessary data analytics tools and databases to gather and process the necessary intelligence?
•DECISION PROFICIENCY: Are executives able to turn strategic insights into effective decisions and implementation plans?
While Decision Intelligence is crucial to a career in any company, it is most likely to be the most important capability of any executive in a digital enterprise where all sorts of data, information or knowledge are basically the only resources that can create a competitive advantage. Thus, if you aim at a career in a digital enterprise or tech giant, do not underestimate the value of social sciences to reach the top.
The author is Senior Lecturer, Macquarie Business School, Macquarie University, Sydney, Australia & Adjunct Professor of Business Policy & Strategy, Indian Institute of Management, Udaipur, India.