Do decisions turn out better when they are taken by multiple people?

What happens when strategic decisions are not reached in the boardroom, but by a large number of stakeholders? Ali Banihashemi models the long-term impact of open strategy on companies and institutions. He has no doubt: “In the future, we will have to rely on open decision-making processes.”  

Typically, customers, employees or even competitors are not involved in strategic business decisions. Such decisions are usually taken within the governing bodies – be they in companies, in institutions or in the political arena. The open strategy is now shattering this paradigm. In exchange for more transparency and openness, companies benefit from greater innovation potential and the opportunity to assume a leading role in disruptive market developments, so the basic idea goes. Ali Banihashemi, whose full surname is Banihashemiemamgheisi, is a doctoral student in the DECIDE (Decision-Making in a Digital Environment) programme and is investigating how an open strategy affects the long-term development of these kinds of companies.

“We know that top managers are generally not very good at making decisions,” Ali Banihashemi explains, albeit the managers themselves frequently believe the opposite. Studies show that around 70 per cent of strategic decisions are not even feasible. By opening up the decision-making process and involving staff, clients and customers, or even random members of the public, the chances of making good decisions that lead to a long-term improvement in performance will increase.

Ali Banihashemi uses a quantitative approach to his work. Based on case studies involving real companies and institutions, he has developed a model with which he hopes to be able to see into the future: “The purpose of my simulations is to find out what is going to happen to companies that rely on open strategy in ten to twenty years’ time.” There are many factors to take into account: “In our models, we aim to approximate reality as closely as possible, to the extent that mathematics allows us to do this. Yet we know that there are always limitations to what we can do: Even managers do not always act rationally, they do not possess all the information, and often they do not even know what information might be relevant for them.”

Quizzed about how Ali Banihashemi makes his own decisions, he points to Mark Zuckerberg or Steve Jobs: They both almost always wear the same clothes. This is in keeping with the notion that people make better decisions when they limit themselves to as few as possible. “So, if you avoid having to decide which shirt to wear and how to combine it every morning, it gives you more time and energy to focus on more important decisions”, he tells us. Ali Banihashemi has set himself the goal of limiting himself to three decisions per day. He made his decision to come to the University of Klagenfurt for the doctoral post by tossing a coin. “At the time of my acceptance in Klagenfurt, I held a good position in a company in Iran. In order to embark on the adventure of entering the world of science, I had to give up a great deal and step out of my comfort zone.” Even back in high school, Ali Banihashemi loved mathematics. He subsequently completed a Bachelor’s degree in electrical engineering and realised: “We have a lot of engineers in Iran. But what we lack in a great many cases are prudent managers who make good decisions.” After spending some time in the field, Ali Banihashemi decided to pursue an MBA programme. “After starting my career, I soon discovered that I wanted to expand my knowledge. That’s why I started to look for a doctoral position and I applied for positions all over the world.” The path finally led him to Klagenfurt, where the topic, the great potential and the methodology matched his vision. His future path is still wide open: Maybe, some years from now, a different coin will determine where he will be putting his knowledge into practice.