Decision Governance Concepts: Situations, Actions, Commitments and Decisions

This is the first of several notes which will introduce concepts necessary to design and do decision governance. The aim is to develop a more precise idea of what decision governance is, how it works, and what it means to design it and evaluate its benefits and costs. 

The focus in this first note is on how to usefully make decisions visible, or observable when you believe there is a benefit to do so. It may seem odd that decisions are not observable, but as I wrote separately, here, a decision is a commitment to a course of action. As such, every time we believe we observe one, the best we may in fact be observing is a trace of the commitment – an executed agreement, an email, a plan, and so on, describing what should happen at some point in the future, and most importantly, identifying who will do it (being presumably their commitment).

Consider this simple thought experiment: think back at a business meeting you were in, and try to think about who made decisions when, during that meeting, and think about how you became convinced that these decisions were indeed made. Depending on the governance around the meeting (ad hoc one-on-one’s and board meetings are very different, to take two extremes), there may be a record of the observations and conclusions made in it, which will either call out what those who participated commit to do next (implying that decisions were made), or things explicitly called “decision logs” serving as records of commitments made. Think about how often these records matched what you thought the decisions were. It is indeed quite difficult to capture decisions made, except if very clear language is used to call them out – it is in fact part of decision governance to encourage such language: “we decided that…” or better “I decided that…”, “unless you disagree now, I am making the decision to…” and so on. 

In a given situation, you will have observed something that may stand out – it stands out because you like or dislike it, and in either case, you want to understand why it happened. It is relevant somehow to you, or in the context of the firm, you are convinced that it is relevant for performance.

As soon as you want to understand why it occurred, you need to assume – rather obviously – that actions led to it. 

So far, we’ve introduced two concepts which can have their usual definitions: situation and action. If you like having more specialized, still appropriate definition of situation for the purposes here, it would be that a situation is a partial world [1] – practically speaking, this means what you observe, whereby some of that piqued your interest (the relevant “part” of the situation). It being partial is quite important, and I will return to it later on as we need to do some more work before we go into complicated topics.

In that still specialized language, actions are what changes a situation into another one, and in organizations, the critical thing to always keep in mind is that individuals take actions – without this simple idea, responsibility and accountability have no meaning, and there is nothing to build decision governance on.

Now, by trying to think about rather ordinary things happening in organizations, such as meetings, other kinds of communication, individual work, and so on, as situations and actions, we are introducing some artificial distinctions over a reality that does not itself suggest how it needs to be cut up. 

The reason this is useful, however, is that we can now assume that actions are the result of decisions, that they were taken because there was thought put into what could be done, and these actions turned out to be the best given the circumstances, or given the specifics of the situation in which the decision was made, and actions taken.

To illustrate this with a common situation in a firm, think about when you were looking at the results of something that you asked someone to do. You see the result, and you don’t like it – you thought the work that was done should have led to a different situation. You then look into the actions taken, and once you understand those, the next step is to determine who decided to do these, and how they decided to do so. Those are decision governance questions, and we are simply here using three concepts to talk about this: there is a situation in which you observed something unexpected, you assumed that this resulted from actions that someone took, and you then want to investigate why they took those actions, i.e., how they made their decision.

By doing this, we artificially split the situation from actions, and do the same to actions and decisions. Finally, we reified decisions, as we cannot see commitment, only see behaviors that we assume it led to.

This distinction between situation, action, and decision is not necessarily surprising or particularly novel: when you see decision logs, action logs, plans, schedules, you are pretty much seeing the artifacts created as a result of the need to assign and realize responsibilities.