Decision making in traditional hierachical organisations all too often defaults to a HiPPO.

A HiPPO is a Highest Paid Person’s Opinion.

Typically, they over rule the data, which comes in endless streams of so-called reports (numbers in various, mostly Excel and dashboard, forms, without analysis and insight), and personalise decision making with their opinions.

Post-industrial enterprizes or, if you prefer, enterprize 2.0 entities will make decisions in new ways.

The hierachical-based, HiPPO decision process was the best available option when people assumed that experience equated with competence.

Often these guys, and they were mostly guys, got to the top of the decision-making tree, in part, as a result of their experience, often gained within the one company or several companies in the one industry vertical.

However, today that conventional approach is less and less effective as the speed of digitally-driven change means experience no longer correlates with competence.

Social decision making by inherently collaborative, socially-integrated organisations will challenge and surpass those legacy companies where HiPPO dictates remain the norm.

Marketing in these customer-driven entities will focus on harvesting the right data points, extracting insignts, committing to data-driven actions and making increasingly accurate forecasts.

Entire organisations will obsess about how customers experience their brand.

New sources of competitive advantage will be created and there won’t be a HiPPO in sight.

For more, check out Wired magazine’s great article on the merits of A/B Testing, and the Decision Hacker blog, and Avinash Kaushik’s Seven Steps to Creating a Data-Driven Culture.

And this book will be worth considering when it is published in February 2013: Decision Sourcing by Dale Roberts and Rooven Pakkiri.