Monday, October 03, 2011

Quantitative decision making, stakeholder influence and gut feel

For a long time now I've pushed the benefits of modelling to aid in decision making. It was never believed that modelling would result in 100% accuracy and that decision makers would not need to make decisions based off judgement or gut feel, just that a well modelled business case would make this judgement a more informed one and hence more likely to be the correct one. Even with the push for long term and triple bottom line analysis, it was always understood that this analysis played a supportive role.

This passion for investment analysis has led to our business case training course being delivered to over 1,000 attendees since 1999. However, of late, I have found that facts are ever increasingly hard to come by. The internet and enterprise search allows for verification of statements in a second. Using these tools to verify statements made in business cases invariably leads to the identification of falsehoods rather than the verification of facts.

I still believe that a well modelled and fact based business case can greatly improve the performance of both business and government, I am being more and more disillusioned with the use of erroneous facts and robust yet erroneous business cases being used to justify what is essentially a gut feel decision (i.e. make the facts bend to the decision that's already made rather than explore the options and decide after the analysis is presented).

What is also disappointing is the periodicals and people who are using this "make the facts meet the story" method in justifying their statements. In the next few blog entries I'll highlight some of the more recent blatant factual errors used to justify some policy or business decision making reason. Included in these will be statements made by Sage of Omaha - Mr Buffet, the Economist, Michael Pascoe of the SMH and some You Tube videos I've watched recently. Hopefully this will help clear the head and get the frustration out of my system.

No comments: