Social Learning: How to Use It to Accelerate Adoption of Decision Governance
Let’s say that a new decision process for capital allocation needs to be introduced in a firm. Based on factors which accelerate social learning, what can be done to accelerate the adoption of the new process? By combining leadership advocacy, structured training, visibility of benefits, peer learning, risk reduction, and digital tools, a firm can accelerate the adoption of a new capital allocation process. These interventions ensure that employees not only understand the process but also see it as beneficial, easy to use, and socially reinforced.
This text is part of the series on decision governance. Decision Governance is concerned with how to improve the quality of decisions by changing the context, process, data, and tools (including AI) used to make decisions. Understanding decision governance empowers decision makers and decision stakeholders to improve how they make decisions with others. Start with “What is Decision Governance?” and find all texts on decision governance here.
1. Leverage High-Status and Prestigious Models
Senior executives and influential managers should publicly endorse and model the new capital allocation process. Employees are more likely to adopt changes when they see respected leaders actively using and advocating for the process.
- Action: Ensure that C-suite executives, finance heads, and business unit leaders champion the new framework in meetings, reports, and internal communications.
- Example: The CFO demonstrates the new process in key capital budgeting decisions and highlights successful outcomes in company-wide briefings.
2. Increase Social Reinforcement and Repeated Exposure
Employees are more likely to adopt new behaviors when they see them reinforced through multiple channels and experiences.
- Action: Integrate the new process into ongoing training sessions, team discussions, and performance evaluations.
- Example: Require managers to use the new process in quarterly planning and encourage discussions on its benefits in internal workshops.
3. Enhance Observability of the New Process and Its Benefits
If employees can see tangible benefits of using the new capital allocation process, they will be more likely to adopt it.
- Action: Publicly showcase successful case studies of the new process improving financial outcomes.
- Example: A high-profile investment decision made using the new framework is highlighted in internal newsletters and town halls with detailed financial results.
4. Utilize Peer Learning and Perceived Similarity
People are more likely to adopt changes when they see colleagues in similar roles successfully using them.
- Action: Establish peer mentoring programs where early adopters guide others in applying the process.
- Example: Finance managers who have successfully used the process lead informal discussions or “lunch and learn” sessions to share best practices.
5. Reduce Perceived Risk and Clearly Communicate Benefits
Reducing uncertainty around the new process and highlighting its advantages can encourage faster adoption.
- Action: Offer hands-on workshops, clear guidelines, and decision support tools to ease the transition.
- Example: A simulation tool allows managers to test capital allocation decisions under the new process in a risk-free environment.
6. Strengthen Social Networks and Frequent Interactions
Encouraging collaboration and open discussions helps reinforce new behaviors.
- Action: Facilitate cross-departmental discussions on the new process in investment committees and project evaluation meetings.
- Example: An internal forum or Slack channel is created where employees can share experiences and troubleshoot challenges.
7. Ensure Institutional Support and Policy Endorsement
Policies and incentives should reinforce the new process and make compliance expected.
- Action: Tie performance metrics, bonuses, and decision-making authority to proper usage of the new allocation framework.
- Example: Senior managers must demonstrate adherence to the process before gaining approval for large capital investments.
8. Leverage Digital and Algorithmic Amplification
Digital platforms and automation can reinforce the adoption of the new process.
- Action: Embed the new framework into decision-making software and dashboards used by employees.
- Example: Investment proposals must go through a workflow that follows the new allocation methodology.
Decision Governance
This text is part of the series on the design of decision governance. Other texts on the same topic are linked below. This list expands as I add more texts on decision governance.
- Introduction to Decision Governance
- Stakeholders of Decision Governance
- Foundations of Decision Governance
- How to Spot Decisions in the Wild?
- When Is It Useful to Reify Decisions?
- Decision Governance Is Interdisciplinary
- Individual Decision-Making: Common Models in Economics
- Group Decision-Making: Common Models in Economics
- Individual Decision-Making: Common Models in Psychology
- Group Decision-Making: Common Models in Organizational Theory
- Role of Explanations in the Design of Decision Governance
- Design of Decision Governance
- Design Parameters of Decision Governance
- Factors influencing how an individual selects and processes information in a decision situation, including which information the individual seeks and selects to use:
- Psychological factors, which are determined by the individual, including their reaction to other factors:
- Attention:
- Memory:
- Mood:
- Emotions:
- Commitment:
- Temporal Distance:
- Social Distance:
- Expectations
- Uncertainty
- Attitude:
- Values:
- Goals:
- Preferences:
- Competence
- Social factors, which are determined by relationships with others:
- Impressions of Others:
- Reputation:
- Social Hierarchies:
- Social Hierarchies: Why They Matter for Decision Governance
- Social Hierarchies: Benefits and Limitations in Decision Processes
- Social Hierarchies: How They Form and Change
- Power: Influence on Decision Making and Its Risks
- Power: Relationship to Psychological Factors in Decision Making
- Power: Sources of Legitimacy and Implications for Decision Authority
- Power: Stability and Destabilization of Legitimacy
- Power: What If High Decision Authority Is Combined With Low Power
- Power: How Can Low Power Decision Makers Be Credible?
- Social Learning:
- Psychological factors, which are determined by the individual, including their reaction to other factors:
- Factors influencing information the individual can gain access to in a decision situation, and the perception of possible actions the individual can take, and how they can perform these actions:
- Governance factors, which are rules applicable in the given decision situation:
- Incentives:
- Incentives: Components of Incentive Mechanisms
- Incentives: Example of a Common Incentive Mechanism
- Incentives: Building Out An Incentive Mechanism From Scratch
- Incentives: Negative Consequences of Incentive Mechanisms
- Crowding-Out Effect: The Wrong Incentives Erode the Right Motives
- Crowding-In Effect: The Right Incentives Amplify the Right Motives
- Rules
- Rules-in-use
- Rules-in-form
- Institutions
- Incentives:
- Technological factors, or tools which influence how information is represented and accessed, among others, and how communication can be done
- Environmental factors, or the physical environment, humans and other organisms that the individual must and can interact with
- Governance factors, which are rules applicable in the given decision situation:
- Factors influencing how an individual selects and processes information in a decision situation, including which information the individual seeks and selects to use:
- Change of Decision Governance
- Public Policy and Decision Governance:
- Compliance to Policies:
- Transformation of Decision Governance
- Mechanisms for the Change of Decision Governance