As the forces of globalization continue to connect and intertwine commercial and financial markets, and new technologies come online in the marketplace, the time between "event" and "action" is rapidly closing.
In the past, managers could take weeks or days to make important decisions, however to effectively compete globally, some companies are making critical decisions in hours, minutes or even seconds. With windows for decision making closing faster than ever–are your decision making processes setting you up for success–or failure?
While most would agree that strategic decisions require thoughtful consideration that should rightly stretch out months or weeks, the financial market turmoil of the past year plainly shows that decision making windows can open and close quite rapidly. In fact, as marketplaces grow more complex, and financial markets interconnect in ways analysts still struggle to understand, strategic decisions (even those involving M&A) sometimes need to be made in 24-48 hours.
The window for operational decisions is also shrinking. Companies now need the ability to detect and respond in real-time or near real time when fraud is occurring, products are out of stock, lines at store checkout are too long, online shopping carts are abandoned, or customers are calling with product/service quality issues.
There can be significant financial benefit to speeding operational decisions. Case in point is the financial services industry.
As early as the 1990s, trades were conducted on a system called SuperDot which still exists today. However, according to Richard Bookstaber, an equity fund manager and author of "Demon of Our Own Design", there was nothing super about the system. "Orders were sent using primitive 386s communicating via Hayes micromodem," he writes. "Between short sale restrictions and bottlenecks from excessive volume, there was no guarantee orders would get executed at all."
Now let's fast forward to the future. In Technology Review, an article titled, "The Blow Up" mentions that many high frequency financial services traders make 1,500 or more trades a day, whereas the computers at some brokerage firms execute "hundreds of thousands of trades everyday"–most of which are automated by computers following complex business rules and require no human intervention.
The same article details how the "science of event processing" allows computers to "read, interpret and act upon news" such as making a trade in response to an "FDA announcement–in milliseconds!"
The ability to act upon information faster than others–in this instance to execute a trade faster than other market participants–can make a huge difference in profits or loss. Creating business value via faster and better operational decision making extends to other industries as well.
In retail, analytical systems are enabling workforce and inventory optimization to ensure plenty of staffing and products, notifying managers of stock outs, and even helping speed up the checkout process.
According to an article in the Economist titled, "Watching While You Shop", one very large British retailer is using a system to sense the number of shoppers that enter and leave the store, and then use that data to predict how many check-stands should be open. Systems predict, "up to an hour in advance and monitor average waiting times and queue lengths." Since most of the point of sale systems at this retailer are self service, the system can detect when lines get too long and then open check-stands accordingly.
Faster and better decision making can infer a competitive advantage for companies, but those advantages don't traditionally last very long. Competitors can invest in the same technologies and copy workflows. However, those companies that create a culture based on analytical decision making are hard to imitate as "thinking by the numbers" becomes a way of life.
Getting back to the original premise, I believe that in a complex and global economy, there is less room for error as economies, companies and even individual actions are more tightly coupled. Nothing happens in a vacuum anymore. This means there is less time to react as single events often start chain reactions.
To thrive in a global economy, companies must be able to make the best decisions based on accurate data sources that present as complete a picture as possible. Windows of opportunity are opening and closing faster than ever before. The ability or inability to capitalize on those open windows could be the difference between sustained competitive advantage and obsolescence.
Questions for DailyFix readers:
* Do you see the "windows for decision making" closing at a much faster pace?
* What other drivers besides technology, globalization and interlocking financial markets are driving a reduction in time between "event" and "action"?
* With decision making windows closing faster, will "gut decisioning" play a bigger role going forward?
* When decision making opportunities arise, how are you preparing yourself or your company to best act on those opportunities?
I'd love to hear your comments!
Continue reading "Is the Speed of Decision Making Accelerating?" ... Read the full article
MarketingProfs provides thousands of marketing resources, entirely free!
Simply subscribe to our newsletter and get instant access to how-to articles, guides, webinars and more for nada, nothing, zip, zilch, on the house...delivered right to your inbox! MarketingProfs is the largest marketing community in the world, and we are here to help you be a better marketer.
You may like these other MarketingProfs articles related to Content:
- The Impact of Digital Currencies on Future Marketing Efforts: Jeremiah Owyang on Marketing Smarts [Podcast]
- A Snapshot of the Content Creator and Influencer Economy [Infographic]
- Blogging Benchmarks: Word Count, Frequency, Production, and Traffic Trends
- 2022 B2B Content Marketing Report: Benchmarks, Budgets, and Trends
- Does Including Video on Site Landing Pages Boost Conversions?