What do you do if strategic decision making poses challenges for corporate finance professionals?

1 Identify the strategic problem

The first step in strategic decision making is to identify the problem that needs to be solved or the opportunity that needs to be seized. This requires defining the scope, objectives, and criteria of the decision, as well as gathering relevant information and data. Corporate finance professionals should avoid jumping to conclusions, making assumptions, or relying on intuition without evidence. Instead, they should use analytical methods, such as financial modeling, scenario analysis, sensitivity analysis, and risk assessment, to quantify the impact and uncertainty of different options.

2 Generate and evaluate alternatives

The next step is to generate and evaluate possible alternatives that can address the problem or opportunity. Corporate finance professionals should consider a wide range of options, including creative and innovative solutions, rather than settling for the obvious or conventional ones. They should also compare and contrast the alternatives based on the criteria and objectives defined earlier, using tools such as decision matrices, cost-benefit analysis, net present value, internal rate of return, and payback period. They should also weigh the pros and cons of each alternative, as well as the trade-offs and synergies among them.

4 Enhance your strategic thinking skills

Strategic decision making is not a one-time event, but a continuous and dynamic process that requires constant learning and improvement. Corporate finance professionals should enhance their strategic thinking skills by seeking feedback, reflecting on their experiences, and updating their knowledge and perspectives. They should also seek opportunities to collaborate and consult with other experts, peers, and mentors, who can offer different insights and perspectives. They should also challenge themselves to think critically, creatively, and strategically, and to embrace uncertainty and complexity as opportunities for growth and innovation.

5 Apply ethical principles and values

Strategic decision making is not only about maximizing financial value, but also about adhering to ethical principles and values. Corporate finance professionals should consider the ethical implications and consequences of their decisions, not only for themselves and their organization, but also for their customers, suppliers, investors, employees, society, and the environment. They should apply ethical frameworks, such as utilitarianism, deontology, virtue ethics, or stakeholder theory, to guide their decision making. They should also uphold the standards and codes of conduct of their profession, and avoid conflicts of interest, fraud, corruption, or manipulation.

6 Use decision support tools and systems

Strategic decision making can be facilitated and enhanced by using decision support tools and systems, such as software, applications, databases, dashboards, and reports, that can help corporate finance professionals to collect, analyze, visualize, and present data and information. These tools and systems can also help corporate finance professionals to simulate and test different scenarios and outcomes, and to optimize and automate some aspects of the decision making process. However, corporate finance professionals should not rely solely on these tools and systems, but also use their own judgment, intuition, and experience, and be aware of the limitations and biases of the tools and systems.

7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?