We asked business leaders from around the world for their perspectives on the decision-making challenges they face and how their organisations are rising to these challenges to improve their competitive advantage.
As the Managing Director at Ushdev International Limited, one of India’s largest companies, Arvind Prasad speaks about improving the decision-making process in the organisation and the importance of taking a long-term view in the metals and power generation industry.
Do you feel you are always getting the most relevant information for the decisions you are making?
We do not depend on just one source of information. We use the London Metal Exchange (LME) online service, Reuters, Bloomberg, industry-specific news agencies and the news bulletins of individual companies. We also work with Indian banks, several local banks so that we cover all the regions of the geographies we’re in, and multinational banks, like BNP Paribas and Citibank. We need to have good mix of information so that we can adjust to the broader environment and respond to what’s going on in the market.
Then, in terms of sharing what we learn, our business development team has a 15 minute Deal Call every morning where we discuss what is happening in the different geographies where we operate.
Over the last two or three years, have you made any changes to improve your decision-making process?
Yes, we’ve decentralised decision-making because we’ve grown both geographically and in the number of products we offer. If decision-making is centralised, it gets delayed. Also, the decision-maker may be too far away from the territory concerned - our top management in Dubai or India cannot easily respond to something happening in Australia, which is four or five hours ahead. Indeed, when Australia needs to make decisions, the top managers in India are still asleep!
We’ve made it so that the person making the decision is in the region, as they know the area and the business climate well. Decentralisation is one of our biggest themes and its borne fruit. We’re empowering lower management tiers and giving them leeway to make decisions and do the risk management, within certain boundaries.
How do your decision-making practices, organisational culture and executive incentive structures ensure that good decisions get made?
When someone makes his own decisions, sometimes they’re just wrong. We need a system that lets people make decisions, but the right decisions. We tell them the dos and don’ts, which are actually quite simple. Then we reward them financially if they are profitable.
Is short-termism an issue within your organisation?
By its nature, our business has a long-term view - we only work on long-term contracts of between 12 months and 5 years. When we acquire a new customer, we validate them before entering into a contract. We don’t do anything on the spot, even if we have cargo in that area. This approach requires us to think about the business over a longer period of time, which gives greater visibility to the company and enables you to plan resources more effectively.
Do you have a process in place for learning and taking meaningful lessons from the outcomes of past decisions?
We don’t formally report success or failure stories in our system. During our Deal Desk meetings we share what’s going on in different regions. You see what traders have done in their markets and whether it’s worked well or not, so we’re constantly learning from others’ experiences. The Deal Desk works well, and everyone’s connected through video conferences, chat mechanisms and phones. Information is readily accessible, regardless of location.
High quality decision making has never been more important — or more difficult. Learn more about what leading organisations are doing to overcome these challenges at cgma.org/joiningthedots.