Critical business decisions: Are you looking through the wrong lens?

Every business leader makes decisions on a daily basis, but what criteria are used to influence those judgements? And what are the factors that make the difference between success and failure of the actions that follow?

Clearly these are critical issues for any business and they were addressed at an excellent seminar staged jointly by the Hull University Business School and the Institute of Directors on “decision-making capabilities for competitive advantage” - the latest in a series of “Business Bites” events held at the business school.

The event featured two viewpoints - from the worlds of business and academia. The speakers had not consulted each other in advance, but their presentations dovetailed. The linking theme was that, in order to make successful, critical decisions, organisations had to be able to look at themselves from external and alternative perspectives.

Kevin Walsh, Chief Executive of Hull-based telecommunications provider KC, talked about how KC had reinvented its brand and culture after looking at itself from the viewpoint of its customers, while Prof Alberto Franco of the business school observed that corporate decisions were too often “framed” by fixed perspectives.


KC Chief Executive Kevin Walsh

Mr Walsh said KC underwent a fundamental culture change after conducting extensive customer research in 2009. The results were a wake-up call - it was evident that KC did not have a “winning brand” and needed a new mission and purpose, “a new flag to rally around,” he said. It changed “from an engineering-led business to a brand and marketing-led one”.

The brand reinvention was one of two examples Mr Walsh gave of critical business decisions - the other being KC’s investment of millions of pounds rolling out an industry-leading fibre broadband network. For both, he used his own “RICE” - Reputation, Implementation, Cash and Energy - decision-making checklist to evaluate the likely positive or negative consequences of the decision in terms of reputational impact, implementation challenges, cash implications and the “corporate energy” within the business.

The latter factor was vital, said Mr Walsh. KC identified 35 “brand trustees” to overcome internal objections to the culture change, with each challenged to “enrol” a further 10 colleagues to rally behind the new brand. Because of this, it became “not a dictat from on-high, but co-invented within the business” and achieved “emotional buy-in”. Giving spectacles to staff across the company reinforced the need to “see the business through the customer’s lens,” he said.

The brand transformation succeeded because of it generated “corporate energy” within the business, with colleagues embracing the “proud to be part of local life” brand statement and a major focus on communication sustaining the culture change. It convinced Mr Walsh that businesses with the greatest corporate energy will be those that prevail in an ever more competitive and rapidly-changing business environment.

The decision to invest in KC’s Lightstream fibre network was another example of what Mr Walsh described as the 5% of decisions that really do matter, because they leave a legacy and have an impact beyond the business and upon all stakeholders.

The decision was about “anticipating customer need, for competitive advantage”, recognising the rocketing usage of digital devices and demand by residential and business Internet users for ever-faster content and data transfer.

In terms of cash it was expensive because of the substantial capital costs of laying new fibre connections. It was also commercially and technically difficult to implement. But Mr Walsh was sure it would be hugely positive for KC’s reputation and would once again generate positive energy within the business. Despite the challenges, it had proven to be “the most successful product or service launch in the history of the business,” he said.

Those decisions illustrated that KC is one business that has avoided what Prof Franco described as “strategic inertia”, when traditional ways of operating - which may once have been successful - become embedded in an organisation and prevent it responding to changing market conditions, or delay that response.

He described how decisions are often made within “frames” - “limited perspectives that influence our perceptions of what we see or expect to see”. To avoid this, he said, it was important that businesses stayed close to their customers and found ways to take on board their perspectives, as well as being open to outside views from consultants and other third parties.

Both speakers acknowledged that critical decision-making was a complex process. Indeed, Mr Walsh said that “gut instinct”, based on experience and intuition, was also important. But the key question for any business leader must be: Do you make decisions based only on what you and your senior colleagues see? If so, could it be that you’re looking at the issue through the wrong lens?