Making crisis decisions with military precision | Strategic Risk | Deloitte

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Making crisis decisions with military precision 

What is needed to make effective decisions?

Every day is made up of hundreds of small decisions. Most of them we make without even thinking, because the majority of decisions are not that important or because we have made a decision a hundred times before. What to do when decision-making is not that easy? When the outcome of the decision could have extensive consequences, because the reputation of your company - or more dramatic - lives depend on it?

Claire Bakker & Anouk Jessurun - 31 August 2017

Almost every crisis evaluation comes to the same conclusion. Decisions were not clear, taken too late, or were non-existent at all. All crisis teams, regardless whether they are active in the public or the private sector, find effective decision-making challenging. Moreover, effective decision-making is not only important for the organization’s crisis management team. Regulatory bodies, the society and consumers demand timely and adequate decision-making as well. News travels fast and questions from stakeholders about solutions and accountability issues arise quickly after a crisis occurs.

In this article, we draw upon the experiences within the military. In the military, decision-making is a process that helps the commander and his staff to examine combat situations and reach effective and efficient decisions in a time-constrained environment. 

What do we need to make effective decisions?

1.       Clear organizational structures

A crisis confronts both the operational, tactical and strategic level of an organization with issues and dilemma’s. To solve those, effective decision-making is necessary. However, as decisions need to be made under (extreme) time pressure, there is no room for discussions about roles, responsibilities and which professional will handle the situation at hand. In the military, organizational structures are therefore hierarchical. There is a clear distinction between the operational, tactical and strategic level. For example, a general is focused on the overall strategy of the mission, whereas a fighter pilot specifically focuses on individual targets. Role confinement is necessary to achieve this. Professionals should be aware of their own roles and responsibilities within their specific organizational level and stick with it.

 

2.       Situational awareness

Situational awareness is achieved by structured information processing. In the military this is required because information continuously flows in from different levels, and inadequate decisions can lead to serious consequences. A fighter pilot receives a lot of information during a mission, such as radio messages, radar and sensor information. However, there is very little time to process this all. Therefore, decision-making is structured according to a clear process in which raw information is collected and then filtered through culture, best practices and previous experiences.

The process of gathering all filtered information and transferring it into (actionable) intelligence is called information fusion. This last step is necessary to use the information for decision-making. The same applies to corporate environments as well. Organizations are confronted with a variety of information, for example from social media, clients, customers and shareholders. The challenge is to bring all information together and transfer it into intelligence, which can be used for decision-making.

A difficulty all organizations should be aware of is target fixation. Under stress and time pressure, individuals and teams are naturally programmed to leave out information. Target fixation could lead to taking ineffective decisions because information is missing or invalid. It is therefore recommended to continuously reflect on possible missing pieces of information. Being aware that target fixation could occur, taking a step back by zooming in and out can help avoiding this problem.
 

3.       A learning organization

Practice, practice, practice. Trainings and exercises should take place both horizontally within the own level of the organization but also vertically to ensure effective cooperation between all levels of an organization. In the military, soldiers walk through scenarios before deployment and are brought to their boundaries in a controlled and safe learning environment. This provides them with the confidence to decide and act when they are actually on the front line. They are then better equipped to handle stress, uncertainty and time pressure.

The same holds for organizations outside the military. In order to become a learning organization, it is important that organizations gain insight in their risk exposure and develop related training scenarios. By training these scenarios through all levels of the organization in a controlled manner, management can evaluate if the organization is well prepared for a crisis. In addition, to evaluate if the developed plans are sufficient, these plans should be tested to their boundaries by performing ‘stress testing’. Learning from the military shows that good crisis management happens for 95% before the crisis and that learning is a key element.  

All elements needed for effective decision-making during crisis are very much present in the way the military is structured. Learning from their best practices could help both public and private organizations master the art of decision-making.

This article was written in close collaboration with General (ret.) Dick Berlijn, former Chief of Defence of the Netherlands. 

More information?

Do you want to know more about dicision making during crises? Please contact Theodorus Niemeijer via tniemeijer@deloitte.nl / +31882881978.

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