Decision Intelligence: Transform Your Team and Organization with AI-Driven Decision-Making

By Thorsten Heilig and Ilhan Scheer

Dramatically improve your decisions with data and AI

In Decision Intelligence: Transform Your Team and Organization with AI-Driven Decision-Making, a team of pioneering decision and AI strategists delivers a digestible and hands-on resource for professionals at every part of the decision-making journey. The book discusses the latest technology and approaches that bridge the gap between behavioral science, data science, and technological innovation.

Discover how leaders from various industries and environments are using data and AI to make better future decisions, taking both human as well as business factors into account. This book covers:

• A demystifying behind-the-scenes peek inside how AI models, forecasts, and optimization for business challenges really work, and why they open up entirely new possibilities.
• A business-ready introduction to decision intelligence, exploring why traditional decision-making strategies are outdated and how to transition to decision-intelligence.
• The evolution of Decision Intelligence, coming from analytics and modern techniques like process mining and robotic process automation
• An examination of decision intelligence at the organizational level, including discussions of agile transformation, transparent organizational culture, and why psychological safety is a crucial enabler for new ways of decision-making in modern companies
• An overview of why (and where exactly) AI still needs human expertise and how to incorporate this topic in daily planning and decision making
  
  

Decision Intelligence is essential reading for managers, executives, board members, other business leaders and soon-to-be leaders looking to improve the quality, adaptability, and speed of their decision-making.


Praise for Decision Intelligence

"In Decision Intelligence, Thorsten Heilig and Ilhan Scheer build a compelling case for the world of tomorrow’s version of decision-making.”
―Martin Lindstrom, New York Times best-selling author

"Decision Intelligence will be one of the big topics for this decade and completely change the way organizations manage, plan, and operate. This book provides a comprehensive guide from the basics to the applications."
―Niklas Jansen, Entrepreneur and Tech Investor, Founding Partner Interface Capital and Co-Founder Blinkist

"The book impressively demonstrates the potential and entry points into the world of AI-powered decision making. A very valuable reading for managers and their organizations".
―Michael Kleinemeier, Member of the Merck KG Board of Partners, former Member of the SAP SE Executive Board

“The AI hype perfectly captured, easy to understand, de-mystified and mapped to clear use cases - a must-read for today's managers.”
―Dr. Daniela Gerd tom Markotten, Member of the Management Board for Digitalization and Technology, Deutsche Bahn AG

• Language: English
• Publisher: Wiley
• Release date: Oct 31, 2023
• ISBN: 9781394185443

Book preview

THORSTEN HEILIG ILHAN SCHEER

Decision Intelligence

TRANSFORM YOUR TEAM AND ORGANIZATION WITH AI-DRIVEN DECISION-MAKING

Logo: Wiley

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Published by John Wiley & Sons, Inc., Hoboken, New Jersey.

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Every single decision we make, every breath we draw, opens some doors and closes many others. Most of them we don't notice. Some we do.

—Douglas Adams

Figures List

Chapter 2

Figure 2.1  The road to 100 million monthly active users.

Figure 2.2  The Cynefin framework.

Figure 2.3  Decision Intelligence, the business trend of the future.

Chapter 3

Figure 3.1  The six levels of autonomous driving.

Figure 3.2  The three levels of Decision Intelligence augmentation.

Chapter 4

Figure 4.1  Client use-case: realized potential after the start of a DI initiatives.

Figure 4.2  Example for use-cases along the value chain/supply chain.

Chapter 5

Figure 5.1  Thickness of paper per fold.

Figure 5.2  Schematic overview: warehouse scenario.

Figure 5.3  The effect of short-term bookings on costs per mile.

Figure 5.4  Trade-off view with optimal solutions for two targets.

Figure 5.5  Example of order list recommendations.

Figure 5.6  Example trade-off view for a channel manager.

Figure 5.7  Optimized trade-offs for budget channel mix.

Figure 5.8  Example dashboard view of a Decision Intelligence platform (paretos).

Chapter 6

Figure 6.1  Effort and impact of implementing different technologies within a business.

Figure 6.2  Ambiguous picture of a young woman and an old woman.

Figure 6.3  Example of a representation without and with ontology of interacting parameters.

Figure 6.4  A simple linear regression model example based on given data points for one input parameter.

Figure 6.5  Two different possible models fitted on the same data.

Figure 6.6  A schematic view of different model classes based on data availability.

Figure 6.7  Time series forecast including dynamic uncertainty bounds for better interpretability.

Figure 6.8  Causal diagram of a business problem building the ground truth for a digital twin.

Figure 6.9  Pareto frontier showing the trade-off between costs and percentage of CO2 heavy emission from energy production.

Chapter 7

Figure 7.1  The four Rs of a DI organization framework.

Foreword

In the fast-paced, dynamic world of business, we are making decisions every second. As technology accelerates the pace of change, we find ourselves constantly responding to new information, new opportunities, and new challenges. Yet some of the world's best thinkers, philosophers, and business leaders – think Steve Jobs, for instance – have been known for taking long pauses, sometimes even up to 30 seconds, before sharing their responses. I remain convinced that, in all the rush, good decisions require reflection and intuition. Sound decisions emerge out from quiet reflections, from calm environments, and from conversations that allow many voices to be heard, to grow equally balanced thought patterns, and then make the call.

Consider this: we're often seduced by the promise of data, its ability to recount where we've been with unwavering certainty. It's alluring, isn't it? But let's step back for a moment and think about it. Can data, in its cold precision, truly illuminate where we are heading? Perhaps not.

Data, while valuable, is like a rearview mirror. It can perfectly detail the road traveled, but the path ahead? That's a different story. The future is uncharted territory, a journey not yet embarked upon, a tale not yet told.

In our quest to navigate the future, we mustn't lose sight of our uniquely human insight. It's our compass, our guiding star. It transcends the reach of data, infusing our decisions with the warmth of human understanding, empathy, and intuition. These human elements shape not just the decisions we make but also the very fabric of our interactions. In a world bewitched by data, let's not forget our inherent human ability to dream, to imagine, and to create – to chart a course toward a future not yet seen. After all, isn't it these human insights that truly hold the power to tell us where the world is heading?

However, with the emergence of Decision Intelligence – a new discipline that courageously combines human intuition and artificial intelligence for strategic and operational planning – I do see a promising shift on the horizon. This book, Decision Intelligence: Transform Your Team and Organization with AI-Driven Decision-Making, by Thorsten Heilig and Ilhan Scheer, masterfully captures this evolution.

The book presents an approach that might indeed predict where the world is heading in our ever-changing business landscape. It advocates a balanced and nuanced way of decision-making that draws on both data and human insights. This dual-pronged approach could potentially revolutionize how we make decisions, bringing a level of foresight and strategic thinking previously unattainable.

Recently, when I spent time with the CEO of one of the leading FMCG (fast-moving consumer goods) companies in the US, I asked him how much time he spent by himself only – away from screens, his phone, and meeting rooms – just reflecting on the situation. He paused and was silent for nearly two minutes. Then he answered, Right now is probably the longest time I've had in the past years thinking about a question. That very week, he reserved the first four hours of every Friday morning for what he called thinking time.

Here's the issue: we rarely take the time to think deeply, and in a world where answers are expected not in hours but in minutes, we often share reactive rather than proactive thoughts. If this becomes part of our behavior, our routine, our brains adapt. We're suddenly no longer comfortable spending time alone, without a smartphone at the ready, or without hearing that constant string of dings signaling incoming emails – because it makes us feel like we've been disconnected. Useless, irrelevant. Out of tune. All while the world – with the latest version of ChatGPT – passes us by at breakneck speed.

Six years ago, I jumped into the ocean of silence. I got rid of my phone. Not just the smart version, but every version. Not an easy task given that I spent more than a million miles a year in the air, traveling across the globe. The week after the beginning of my detox, I experienced a sense of loneliness, emptiness, even despair – something akin to what an addict might feel as they do the hard and necessary work of going through withdrawal.

But over time, I felt my way of thinking change. My personal assistant told me I was much easier to deal with – not sending and resending the same orders repeatedly, as she expressed it. My clients even embraced the idea, at first thinking it was a joke, then realizing it might be a source of my creativity and balanced reflections.

These pauses help us to put things in perspective, change directions, reflect, and simulate scenarios that may at first seem trivial, but once pondered they often make a lot of sense. How can we possibly make any of these great calls if the speed of reply time is what is perceived as the KPI?

Time after time I've met great leaders out in the world, and many seem to have adopted pauses in their everyday lives – breaks in the busy daily calendar meant for intentional reflections. As ChatGPT seeps into every juncture of our lives and informs our decision-making, enabling us to craft essays, reflect on the most hardcore philosophical questions, or even conduct risk analysis in a matter of seconds, we'll all be tempted by the seduction it offers – making us more efficient, productive, perfect leaders and decision-makers – whereas one could easily argue that the exact opposite is the case.

In Decision Intelligence, Thorsten Heilig and Ilhan Scheer build a compelling case for the world of tomorrow's version of decision-making. It's a world representing tools unheard of just a year ago. Yet it's also a world where cultures are struggling to survive, where personal interactions are a thing of the past, where budgets are ever tighter, and where the legal implications have never been larger and the rewards smaller. The authors explore all of the potential wonders that AI brings to the table, the efficiencies that such technology offers, all while considering the flip side: the temptation to abuse it, the shortcuts, the assumptions, and the plain laziness.

This book is a delicately balanced cocktail – mixed up with knowledge, insight, and experience worth tapping into before you're tempted to assume that all AI tools are of highest caliber and quality.

Be warned that it will take you more than a few minutes to read the following pages. Asking ChatGPT, the chatbot informed me that it would take 262 minutes total. That's a lot if you evaluate things in terms of speed over quality. But if you believe that quality content – and time – is the most important asset of our day and age and a worthwhile investment for the future, well, it's really not that much at all. Especially since you are increasingly more likely to be dumped into another round of decision-making – where AI seems to be the first point on the agenda.

—Martin Lindstrom, New York Times best-selling author of Buyology, Small Data, and The Ministry of Common Sense

Acknowledgments

Sometimes life plays in strange coincidences. When we had the idea for the book three years ago, Decision Intelligence (DI) was still very small as a topic. Moreover, almost no one called it that. But then DI suddenly went through the roof, first in the bubble of digital and research companies, then in consulting. After OpenAI launched ChatGPT at the end of 2022, the notion of using AI for decision-making became widespread, even though ChatGPT itself is a bad decision for good decision-making. Nevertheless, it paved the way for incorporating AI into everyday applications.

Let's be honest: we always had the book on our list, but the project was one of many. But then Wiley approached us, noticing the growing demand for Decision Intelligence. From minute one we shared the excitement for examining the topic from both a technological and a cultural standpoint. The journey of transforming organizations into DI organizations is a huge shift, and humans are still at the heart of it.

So, thanks to the Wiley teams in the US and in Europe (Sally, Annie, Deborah, Amy, Jutta, and many more) supporting us on our way so patiently.

Call us dreamers, but we thought of writing this book in the same way it began. We sit in cozy cafes and are immersed in thoughts and discussions. Then Captain Reality kicked in and reminded us that we are not full-time authors but have demanding leadership roles in our organization. This is why this book demanded everything from us and our surroundings.

We can assure you that without the people around us, helping, supporting, and pushing, this book would have never ended up in your hands.

So, a big, big thank you to:

Fabian Rang, cofounder and CTO of paretos, who was a substantial part of building the tech chapters – and also a great proofreader and discussion partner for every topic

Tina Sternberg, the master of text and content, who was our stable pillar from the beginning, and while we were sometimes irritated by her asking for which source, again? ;) this really brought us to a next level here

Konrad Heimpel, for providing some more real-life use-cases for the DI in practice

Christoph Burkhardt and Magnus Haensler, who know how to write good books (for digital topics and for thriller novels) and supported us with good tips

Simon Kondermann, for the great sprint designing the illustrations

Ksenia Zheltoukhova, Alexander Schaper, Torin Monet, Dennis Nagel, and Enrico Ferro for the conversations, discussions, and challenging our thinking to bring this book to a new level of greatness

In addition, a big thank you to all the clients, investors, and other dialogue partners with whom we had discussions around the DI topic– it means a lot to us!

Last but definitely not least, we are really grateful for our private environment, which was so kind with us as we were writing and not being very social (especially at the end), and first and foremost we are grateful to our families (Jana, Elias, Leon, Lena, Oskar, Lotti, Juli) for being incredibly wonderful pillars and motivating us to make this possible!

Introduction

It was a warm day in Heidelberg, Germany, back in 2020, when we – Ilhan and Thorsten, two startup CEOs – found ourselves deep in conversation about our challenges. We were drinking a cappuccino and an Americano in Café Nomad, exchanging stories, experiences, and insights, coaching each other through the uncertainties ahead.

Ilhan, the founder of fable+, had successfully scaled the company over the years, transforming the way businesses approach team dynamics, data-driven change, and psychological safety with AI-driven decision engines. However, the unforeseen consequences of the COVID-19 pandemic introduced unpredictable and significant challenges to the consulting industry, which slowed the momentum of scaling.

Thorsten, on the