Guideline Decisioning

I am as close to the army as Arnold (in real life) is close to being the terminator. Even then, it always fascinated me, so much so that I decided to even watch Tom Cruise starrer Born on 4th of July. I even lost the lack of respect; I so much had previously for American foreign policy.

Anyways, this post is not to talk about the foreign policies but another one of my weird observations and insights gained from watching war based films. May be there is something for businesses to learn about. I am sure a lot many entrepreneurs already do what I am about to propose, else their adaptability to changing and volatile business environment would be in question.

So my post is not proposing a “paradigm” shift in decision making. It is just including some common sense, something humble decision making, about which I read in my B-School, (Disclaimer: No, I am not from Harvard.) tried to do long ago.

Amitai Etzioni is amongst the top 100 American intellectuals as measured by academic citations in Richard Posner's book and I believe his persona may have been one critical factor for me to still remember something about humble decision making.

Guideline Decision making, just like humble decision making tries to simply the process. It however is a little different from decision making guidelines. Most decision making guidelines tend to list the important criteria which will measure the effectiveness of the decision, popularity of the decision or in some cases, feasibility of the decision. Most rely on pragmatic outcomes which are largely measurable, objective in nature, and lead to a better financial outcome (or avoids a worse financial outcome). In short, all decisions in business tend to target one and only one area. The bottom line (some also like to call it profitability).

Even decisions taken to enhance brand image, or seek feedback from customers etc are most likely driven by industry pressures, competitive marketing strategy and a strong unnecessary need to provide differentiated service. Bottom-line is always to ensure how business remains profitable, which is probably the most commonly understood and unfortunately agreed purpose of the business.

A famous author once said “The Social Responsibility of Business is to Increase its Profits” and also that the “business of a business is business”.

I do not agree.

I guess the purpose of every business, every job, and every task no matter how big or small the organization is, no matter how high or low an individual is on societal echelon, is first survival. Maslow would have been happy in my saying it. That is what motivates most people and I am assuming since businesses do not have a mind of their own, they are also looking for the same basic needs that ensure survival. Surviving in business can be loosely translated to profitable execution, but only loosely.

The first profession was for survival. Politics or the economics of the institutions of government were largely attributed to warfare. John Keegan in his History of Warfare says that war is a universal phenomenon whose form and scope is defined by the society that wages it. Society on the other hand acts collaboratively to enable its members to benefit in ways that would not otherwise be possible on an individual basis. In other words, war is a natural evolutionary process that makes it easy to survive and grow. By the way politics is only after prostitution in terms of profession evolution.

Since the two oldest alive professions were born out of need for survival, it is only fair to assume that almost all business look for survival. There may be few, which are there for the greater good, creates products or services to help mankind and so on so forth, however, I am sure they are not called businesses and even if they are, you may be able to count them on fingers.

Most organizations have a mission or a vision statement, if not both. Some organizations like J&J have done away with vision & mission statement and try to live by a credo, which essentially is the beacon that guides them in dire straits.

Guideline Decisioning is defining guidelines that form the basis of organizational culture. Since management so heavily inspires itself from military, it is but prudent to see an example of the guideline. This is followed not because it is more efficient, but because they are the right thing to do. Something business must learn.

Never leave a man behind from U.S. Army Ranger creed is an admirable idea. U.S. military (and other armed units across the globe) spends huge amount of money to bring back the dead, fatally wounded soldier and their weapon and personal belongings (whatever possible). This acts as a great motivation to other soldiers that they will not be left and their family not ends up mourning a picture without even having a chance to see their beloved before last rites.

Rules of engagements are another set of guidelines that enable decision making. Please note these are not decisions themselves, but an enabler to make right decisions under specific situations.

Many organizations have demonstrated a similar approach, where they have thought less about the profits, and more about the right thing. Johnson & Johnson recall of Tylenol for an example is one such step even when the harm was not really done at the time of recall. Mattel’s famous magnet recall of over 18 million toys in 2007 and rewriting its policy can also be an example. Please note that at the time of the recall, none of the U.S. or European safety legislation and standards addressed the specific hazard of strong magnets. You may argue that the organizations did it for avoiding harming their images, and I have no reasons to disagree with this line of thought. However, the fact remains the same, business decisions are made to ensure profitability, not the right thing. Right thing for them of course, is probably what many of them think. Even here I would disagree.

Any organization, that repeatedly does the “right thing” for them or tries to constantly answer “what’s in it for me” will surely start losing the respect and support from junta. Organizations are led by individuals and hence share the same virtues or vices that an individual does. Profitability alone can never be the sole force that will make an organization immortal. Profits of Enron, Anderson and Lehmann brothers are just another names & numbers in the book. So are these organizations.

Not just me, a lot of pundits (and lot of broken homes, struggling financial institutions, failed governments and tearful eyes) wish these organizations had guidelines, which would have guided their decision makers do the right thing and survive rather than Q on Q, Y on Y profitability.