13 October 2011
NEW REPORT SAYS DECISION MAKING IN BOTH BUSINESS AND GOVERNMENT COULD IMPROVE.
RESEARCH REVEALS THE X-FACTORS FOR EFFECTIVE DECISIONS.
New research published today, Thursday 13th October 2011, by the Whitehall and Industry Group (WIG) and Ashridge Business School reviews the quality of decision making in government and business; identifies the features required for good decision making and makes recommendations to both government and business on how to improve. 'Searching for the X-Factors: A Review of Decision Making in Government and Business' reports that 90% of the high level Ministers, civil servants and business people interviewed agreed that decision making in government is more complex, more demanding and a good decision making climate is much harder to achieve.
At a time when good decision making has never been more vital, the report provides practical advice and specific recommendations to both business and government on how to increase the chances of effective decisions being taken, including an easy reference guide to the key factors and approaches required. The seven 'X-factors' are identified as: clarity of objective; early interaction and good communication with trusted stakeholders; relentless focus on priority issues; good team working; frank challenge; clear, practical implementation with accountability; effective post hoc review. The report says that the very factors that are critical to good decision making can inadvertently be given insufficient attention or get crowded out by other apparently more pressing priorities, but are neglected at significant cost.
Sir John Parker, Chairman, National Grid and Anglo American commented:
"All aspects of management benefit from exposure to the best skills and processes available and decision making is no exception. Too often, especially in pressurised situations, there is an over-reliance on gut instinct rather than an adherence to the factors we know will result in a more effective output. The report offers some useful insights for both business and government on the importance of following a process which will increase the chances that decisions are well made; and that this should be done as a matter of course, not convenience, for the benefit of us all."
Key recommendations include:
For government:
- Use the experience of independent members of departmental Boards to help Ministers focus on key strategic issues and review how best to delegate more from Cabinet Ministers to other Ministers and officials.
- Encourage and, where appropriate, make specific provision for frank challenge, exposure of dissent and stress-testing of options up to the point of decision.
- Direct more focus to implementation with early consultation with trusted stakeholders, opening clear and effective channels for comment, information and data between front line staff and policymakers.
- Demonstrate commitment to greater continuity for Ministers and senior officials, and review the value of the "four year rule" for senior civil service appointments.
- Put greater emphasis when making both Ministerial and senior civil service appointments on selection for top teams, not just individual appointments.
For business:
- Maintain the right balance between Boards and Executive management.
- Ensure sufficient stress-testing of options and explore the possible intended and unintended consequences of a course of action.
- Encourage challenge within teams and work to avoid 'group-think'.
- Clarify accountabilities and rights of veto over proposals in matrix organisations to avoid decision paralysis.
- Involve stakeholders at every stage. In particular, when working with Government, find ways of building trust with officials and Ministers to encourage early consultation and reduce apprehension about premature disclosure.
Mark Gibson, Chief Executive of The Whitehall & Industry Group, said:
"WIG was established with a charitable purpose of building understanding and co-operation between government and business and our work is designed to encourage learning between the sectors. 'Searching for the X-Factors: A Review of Decision Making in Government and Business' addresses the key questions of how effective is business and government at decision making and how can this be further improved? The report provides useful learning which I hope will be of use to decision makers across business and Whitehall."
Dr Mark Pegg, Director of Ashridge comments: "This research successfully explores a critical issue for leaders: providing those who must take critical decisions in business and public life with real insight on the ingredients for good quality decisions. This cogent report gives those searching for the X-Factors, the highly accessible and practical advice they can rely on when a vital decision needs to be taken."
The report will be available for the first time at WIG's event 'An interview with Sir Gus O'Donnell, Cabinet Secretary and Tom Enders, Chief Executive of Airbus' on 13 October 2011.
For further information, copies of the report or interview requests please contact: Sue Youngman, Compass Rose & Co on
07768 283 162
NOTES TO EDITORS
1. About WIG (wig.co.uk) Independent and not for profit, The Whitehall and Industry
Group (WIG), was established in 1984 with a charitable purpose to enable
learning, build understanding and co-operation between the public, private and
voluntary sectors for the greater public good - a nation better governed,
business better managed and society better served. WIG achieves these outcomes
through a comprehensive programme of cross-sector placements, leadership
training and events promoting dialogue and consultation between business and
government to promote understanding and share best practice.
2. About Ashridge Business School (www.ashridge.org.uk) Ashridge works with
individuals and organisations from around the world to build management
capability and address individual and organisation development challenges.
Clients span the private, public and not-for-profit sectors. Activities include
open and customised executive education programmes, organisation consulting,
MBA, MSc, Doctoral and Diploma qualifications, applied research and virtual
learning. Ashridge is consistently ranked as one of the world's leading
business schools and works with over 100 organisations and 9,000 managers every
year.
3. Research Terms of Reference
This report, jointly sponsored by the Whitehall & Industry Group (WIG) and
Ashridge Business School's Public Leadership Centre (APLC), was commissioned in
response to concerns expressed by former Government Ministers and others about
the challenges they face. One ex-Minister, looking back on the piles of
paperwork for decision he used to receive each night, commented that "It
is no way to run a life, let alone a country." Much has been written about
the importance of effective leadership in the turbulent early years of the 21st
century but less has been said about a key aspect of that leadership:
what helps leaders make good decisions? The primary source for this research is
a series of structured interviews with around 60 people, from both the public
and private sectors.
The interviews, which concentrated on processes and approaches used by the most
senior decision-takers in organisations - the equivalent of Board level and the
immediate tiers below - included past and present Ministers, senior civil
servants, business leaders, local authority and charity executives and
academics. They are listed in note 3 below. The research was supported by a
literature survey of relevant recent academic research reports and some
exploration of illustrative case studies. At all stages, the research has
helpfully been guided by the Editorial Panel listed below. The views expressed
in this report are, however, not necessarily their views but a consensus drawn
from the research.
4. EDITORIAL PANEL
Catherine Bell, Non-Executive Board Member, United Utilities, Department of
Health and Civil Aviation Authority Dame Sally Davies, Chief Medical Officer,
Department of Health Martin Donnelly, Permanent Secretary, Department for
Business, Innovation and Skills (Panel Chair) Mark Gibson, Chief Executive, The
Whitehall & Industry Group Ray King, Chief Executive, Bupa David Laughrin,
Former Senior Civil Servant, Ministry of Defence and Fellow of the Ashridge
Public Leadership Centre (Research Author) Stephen Lovegrove, Chief Executive,
Shareholder Executive Sir Richard Mottram, Non-Executive Chairman, Amey Erica
Zimmer, Head of Public Affairs, J Sainsbury plc Sir John Parker, Chairman,
National Grid and Anglo American plc Dr Mark Pegg, Director, Ashridge.
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