With the world changing at exponential rates, organisations are needing to rapidly adapt and become more adept at solving complex problems and making decisions often with incomplete information and time pressures.
In such an environment, the role that governance professionals play in steering the board through decision processes becomes even more important.
Boards are grappling with decisions about how to best position their organisation as the world moves into a period of change so great that the World Economic Forum is calling it the fourth industrial revolution. For most organisations the outcome is the need to undertake significant organisational change and transformation.
This is supported by KPMG’s 2016 Global CEO outlook report, which found that 41 per cent of CEOs expect their organisation will be significantly transformed over the next three years; an increase of 12 percentage points on the prior year.
During times of transformation and change, organisations make critical decisions that can shape and impact the organisation’s future success. The stakes are high, and decision-making can’t be left to chance. However, many people are unaware of the influencing factors that can play into how they decide.
The brain isn’t fact based
Research shows that people don’t make decisions on facts alone. This is because a person’s brain uses information from the past to help it determine how to proceed in the future.
As the brain takes in new information it tries to make sense of it, so that it knows what it needs to do. To ease the cognitive load this processing takes, it compresses information and sorts it into patterns. It looks for things that are familiar and goes — ‘I now know what to do’.