Understanding the Interaction of Forces

Understanding how forces interact and the effect of this interaction is also essential to making good decisions. Interactions lead to dynamics that you should incorporate into the decision-making process. Always imagine what will happen in other places if you change something in one particular place. By dynamically interconnecting all operational functions, you may solve a local problem, but cause problems elsewhere in your organization or at another time. Always remember that the ultimate goal of an organization is its ability to exist. This viability is given when a sustainably good operating result can always be achieved. And this operating result is determined precisely by three influencing factors, namely (1) a sustainably good order intake that (2) sustainably delivers sufficient contribution margins, and (3) effective and efficient order execution that goes hand in hand with the contribution margins. That is all! Unfortunately, it’s not as simple as it seems, because each of these three criteria is affected by all operational functions simultaneously and together within the context of the overall conditions. So make your decisions in such a way that each decision contributes to the improvement of the three relevant criteria. When making your decisions, consider not only the mutual reinforcing or stabilizing influence between the operational functions, but also the expected time of onset of the effect, the function (sinusoidal, volatile, steady incremental) with which the effect of your decision occurs, the decay rate of the effect of a decision. Grasping these relationships is not trivial. Experience helps, of course. Above all, an open exchange about interrelationships helps.

Decisions must also be made in negotiation situations and in cooperative relationships. In such cases, each participant tries to optimize his or her situation. Often, however, this is not possible without an impact on the overall result. Game theory provides recommendations for such situations.

Nowadays, there are also very good modeling and simulation applications that can help you to grasp the interrelationships and visualize them as a basis for discussion.

Physiological aspects are also effective in the decision-making process, which you should be aware of and take into account.


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