Process Matters

McKinsey released a report this month, The Case for Behavioral Strategy, which pulls out the fly in the ointment by doing the analysis on the question:  “how much of the variance in decision outcomes was explained by the quality of the process and how much by the quantity and detail of the analysis.”

The answer: process mattered more than analysis—by a factor of six. The fly being poor processes of which any one who has spent any time in large companies knows out trumps the numbers, but, well numbers are king. Or were.  They are important, of course, but “superb analysis is useless unless the decision process gives it a fair hearing.”  And, as you will find out reading the report, superior processes improve ROI.

Sustainability initiatives present an excellent opportunity to address unsustainable processes.

While in this post I called out the process message from the study, the story begins with the profound “cultural change” it’s going to take to “debais” strategic decisions. Well worth a read and for the C-level executives a chance to look at how they might be converting process or work problems to people problems. This is how social sustainability can begin to play a bigger role in “greening” our institutions and cities.

My mentor, Dr. Herbert Heaton, then Comptroller of the Rockefeller Foundation and a numbers guy, warned me of the inclination for decision makers to convert work problems to people problems, resulting in firings and lay-offs, and an inordinate amount of time spent accepting and rejecting people.  My boss and mentor, Dr. Randy Hamilton, then of the Institute for Local Self Government, weighed in with the observation that “people hire in their image and likeness.” As I said, this study addresses the role bias plays in our decision-making. Here’s the hard part:  “ strategic decision making leaders need to recognize their own biases.” Now let me link all this talk about process and bias to employment.

The workforce of a company is its most strategic asset and addressing the bias inherent in the process of acquiring and managing this asset is what I move to the top of the list.  The report  doesn’t really talk about people-related decisions favoring instead to reference decisions around mergers, strategic plans that often ignore competitive responses, and investment projects.  Social sustainability and prosperity go together, you can’t have one without the other and prosperity is our economic foundation.