Making decisions and solving problems is something that we naturally carry out in our daily lives, both personally and professionally. However, the vast majority of people have never been exposed to decision-making and problem-solving methodologies. This is not the case with well-educated leaders and experienced Key Decision-Makers (KDMs) who are often exposed to several JDM and CPS methods that simply do not work. This leads to an administrative skepticism regarding these methodologies.
When asked about them, managers often argue that JDM and CPS strategies are “mostly theoretical, without any practical implications”, “great for generating ideas, but not solutions”, “not agile and/or structured”, “cannot manage paradoxes”, “are not driven by KPIs”, among other equivalent opinions.
Due to the complexity of the challenges and problems associated with the decision-making process, we do not always come up with the most appropriate solutions and decisions appropriately. Therefore, having the ability to solve problems, manage paradoxes and make effective decisions efficiently is indispensable in our daily lives.
Many argue that the ability to overcome challenges and make the right decisions is innate. Some suggest that challenges have to be solved through the use of intuition and personal experience. Others argue that through a rigorous process of rational choice and methodologies to support decision-making, it is possible to manage paradoxes and solve complex challenges. In my point of view, this is not a matter of intuition versus rationality. It is a matter of finding the best possible combination between the two schools of thought.
Over the past fifty years, a number of investigations into problem-solving and decision-making processes have been developed. Daniel Kahneman's work, Nobel laureate in economics, systematizes several decades of research in this field. From a theoretical point of view, he points out in his book Thinking, Fast and Slow two types of decision-making processes:
According to Kahneman, it is man's ability to integrate both types, intuition and rationality, that allows him to make the "right" decisions in the "right" way. Any of us can learn how to make the right, effective and efficient decisions every day.
Despite his remarkable and ground-breaking work with many practical implications, Kahneman does not present the "formula" for solving problems with any complexity. However, several attempts have been made to discover this "formula". One such participant-oriented attempt is the Value Creation Wheel®(VCW) meta-structure.
The VCW Scientific Method was published in Journal of Business Research and has been supported for over two decades of co-creation with executives and researchers from top universities around the world, including Nova SBE and MIT. For many years, VCW has been applied by KDMs and leaders of several organizations, from NGOs and start-ups, to SMEs and Fortune 500.
In Portugal, several organizations have also applied VCW to solve their challenges:
Acredita Portugal-Montepio;
Aga Khan Foundation;
Bébécar; Claranet DNS.pt;
Fundação Ageas & Impact Hub;
InvestLisboa;
IPO Porto;
Jerónimo Martins Distribuição;
Nova University (Nova Executive Education, Nova SBE, Nova Medical School, Nova Law School, Nova Doctoral School. ITQB & FCT);
Renova;
Santander;
Santa Casa Misericórdia Lisboa.
VCW is a dynamic, planned decision-making framework that helps systematize the innovation process and value creation.
“The VCW process does not waste time (…). It allows us to agree on which ideas have the most potential for the topic we are dealing with (…). We focus on the ideas reached by consensus. VCW can help KDMs make a decision and focus on stakeholder input to find out which actions will have the most impact, (…). It helps a lot to focus on production and time management.”
António Gutierrez, Head of GROUND SEGMENT BUSINESS UNIT at Elecnor Deimos Group
To solve a challenge, the practical framework of VCW begins with a diagnosis and defines the basis and desired KPIs (phase 1). Subsequently, VCW generates a wide variety of ideas and criteria/filters (phase 2) that will then be analyzed by decision-makers (phase 3). Then the various ideas go through the filters defined by the KDMs and leaders, using Value Creation Funnel and design/prototype (phase 4). In the last phase, the final solution is implemented, and the results evaluated. (phase 5).
Throughout the five phases of the decision-making process, VCW incorporates different perspectives on problem-solving, including opinions from different decision-makers, internal and external stakeholders, including laggards and skeptics.
Maybe it is, maybe it is not. Some executives decided to apply VCW to solve organizational challenges in their organizations and discovered the impact of this decision-making framework through their own experience.
“In the beginning, I was skeptical of this methodology, and I confess that in the first phase I was not counting on the results we obtained. At the end of the process we found very practical solutions and achieved the goals set. It was indeed a pleasant surprise.”
Paulo Pires, WhyMob CEO, and Oramix Board Member
Or do the same as a wide range of individuals of different ages who have already applied VCW to solve personal challenges (directing their personal and professional lives, solving children's challenges).
“The VCW methodology helped me select a job… I had never considered. The methodology indicated a way, a path, for me to follow. (…) After the internship I went to work for another institution with renumbering. (…) Everyone in this situation should apply VCW, particularly when they are unsure, life is undefined, the labor market is overcrowded.”
Woman in her 50s, unemployed for 8 years, found a job after applying VCW
As you can see from many projects, VCW helps you get started by answering questions like:
Learning problem-solving and decision-making methodologies can help to develop one's innate abilities. The more complex the challenge, the more conducive it is to engage a significant number of stakeholders and to combine intuition with analytical thinking to make more effective and efficient decisions.
In this sense, by combining intuition with technical knowledge about problem-solving and decision-making processes, it is within our power to make the right decisions efficiently both in the workplace and in different areas of our lives.
In short, the larger the number of stakeholders, the greater the uncertainty and ambiguity, the greater the complexity of the problem, and the greater the added value of the VCW process.