72 % of senior-level leaders believe that bad decisions are “about as frequent as good ones 

Decision making is a huge part of running any successful team or business. 
It is a skill that companies across the globe seek to sharpen. McKinsey & Company is one of the largest consulting firms on the planet, it prides itself on delivering the facts on decision making. In their most recent global survey Just over half of respondents reported spending more than 30 percent of their working time on decision making. The study also found that over one-quarter spend a majority of their time making decisions. That share of time increases with seniority; for example, 14 percent of C-suite respondents say they spend more than 70 percent of their time making decisions. Amongst these high level decisions  inefficiency was identified as an expensive problem. On average, 61 percent said most of their decision-making time is used ineffectively. Among C-levels, 57 percent say the same.
Bad decisions can have a multitude of knock on effects. Hospital’s are a strong example of where bad decisions can have serious knock on effects. We can draw parallels from studies into patient perceptions of hospital reputations (Mira, Lorenzo, Navarro., 2017).

1. Reputation. Word can spread fast, and experiences affect reputations. Delivering a positive impact is therefore key.  It’s an ongoing chain of events. Hospitals are rated highly by their patients. Reputation drives utilization. Utilization drives future utilization. A bad decision could change that.
2. Perception. Poor decisions can negatively impact those you serve. When a hospital has a higher reputation, patients and their relatives feel the hospital offers a safer clinical environment. Major factors, including confidence in providers, clinical results and, of course, reputation, contribute to the public’s perception of the safety and clinical quality of a hospital.
3. Performance. While the mission of your business is client care, financial health must be managed within your organization to ensure the delivery of quality services to your community. How did you decide to make strategic investments to improve revenue capture in the future? A poor decision can certainly impact your organization’s ability to perform.

Why bad decisions happen

Throughout our time in cannabis business we have seen the negative impacts of poor quality decision making. A failure to catching these issues may mean that these mistakes are compounded and exacerbated when unidentified and left to fester.  Some of the key driving factors behind these bad decisions will be familiar to readers of this article. A 2001 book called "Wharton on Decision Making" brought together the decision-making research of 16 Faculty members from the University of Pennsylvania. Amongst their research were 7 prominent factors that impaired judgement and led to bad decision making.
  • Being blinded by Emotions: This can happen when emotions such a pride or admiration lead to the overlooking of shortcomings and errors leading to less effective decision making.
  • Over reliance on Intuition: Although intuition has served us well as a species, our instincts are not necessarily the most sustainable method of decision management. 
  • Emphasis on Speed: Decisions that have been made quickly may fail to effectively control or manage risks. 
  • Failure to Detect Deception: Unfortunately something we observe in the cannabis industry all too often. Due diligence, asking for references and qualifications are essential.
  • Underestimating Risks Until It’s Too Late: Sometimes a failure to investigate can lead to mistakes being accidentally buried. “Decision makers have great difficulty in evaluating low-probability high-risk events before disaster strikes so they tend to under protect themselves beforehand and overprotect themselves afterward.”
  • Insufficient Information Technology for Decision Support: Is the incorporation of technology into your business holding you back, and potentially leaving blinds spots in your business? 
  • Insufficient Monitoring and Control: Failure to implement controls and lead to managerial confusion making unwise decisions, as individuals, managers, negotiators and perhaps as regulators.

Education is Key

To empower our community we have formed a free set of educational tools that will help you navigate this emerging space and make informed, independent decisions. More on our digital education tools can be found at https://edu.globalcannabinoidsolutions.com/.

Why hire a consultant?

In an industry like cannabis with more unknowns than most it is vital to ensure a strong foundation to your business. There is often reluctance to welcome external advisors into an organisation. Trust is key, and finding reliable expertise can be a project in itself. When done right, consultants can offer tremendous value. 

References


https://www.mckinsey.com/business-functions/organization/our-insights/decision-making-in-the-age-of-urgency#  

Mira, J. J., Lorenzo, S. and Navarro, I. (2013) ‘Hospital reputation and perceptions of patient safety’, Medical Principles and Practice. Karger Publishers, 23(1), pp. 92–94. doi: 10.1159/000353152.