Debiasing Operational Planning in Business Enabling Functions

Abstract

This master’s thesis is a qualitative case study for Netlight, a network organization of 2000 professionals providing a full range of consultancy services from technology and design to data and management. The thesis aims to develop the decision-making of Netlight's business enabling functions in the realm of operational planning.

Operational planning aims to convert strategic goals into practical plans that provide direction for the organization's daily activities. A business enabling function is a department that provides internal assistance, services, and expertise to help the organization operate efficiently and according to the strategy. Decision-making is the process of selecting one option from multiple alternatives. In traditional economics, decision-making was believed to follow a rational model, but later behavioral economics research has shown that the way people decide deviates from this model in predictable ways. Decisions are guided by different mental rules of thumb, heuristics, which, despite their usefulness, often lead to different types of biases.

The thesis was carried out as research-oriented development process including three phases. The first phase focused on understanding the development context by building a theoretical foundation for the study. In the second phase, decision-making challenges in Netlight's business enabling function’s operational planning were identified through a focus group study including three focus group interviews. Insights from this phase, along with the theoretical foundation, helped identify potential biases. The third phase aimed to map solutions to reduce biases and offer recommendations for improving future planning efforts.

The challenges that arose in the focus group interviews were categorized into four themes: reactive decision-makers solving problems of today, ambiguity of decision-making, lack of alignment, and lack of confidence. The findings of the study show that Netlight is a noisy decision-making environment and operational planning may be affected by many kinds of decision-making biases, not all of which can be identified with full certainty through this study. Among the biases identified are the status-quo bias and salience bias, contributing to a pattern of reactive, short-term decision-making. Additionally, social biases, like groupthink and silo-thinking, can hinder alignment and open disagreement. Moreover, miscalibrated self-confidence may pose challenges, as it's essential to remain open to different opinions but be decisive at the end of the decision-making process.

Based on the findings, it is recommended that Netlight clearly define what good decision-making in operational planning entails, focusing on the decision-making processes. It is also recommended to start reducing biases in decision-making by improving decision hygiene and building psychological safety to fully harness diversity of thought. Training to increase awareness is also recommended, although it alone is not enough. The functions also need support from the rest of the organization because preventing biases is challenging without examining the organization's structures and beliefs more broadly.