The economics of decision-making
A glossary of the economics of decision-making
The concepts behind the analysis Exelvys publishes, each defined in a few sentences. Every definition is signed by Peter Guillon and links to the article that develops it.
- The correction window
-
The gap between the moment a signal is received and the moment a decision is made. The longer the window stays open, the more the correction costs. The Meadows model (1972) measures this dynamic on a global scale; it applies in the same way to a single organization.
- CEO sparring partner
-
A partner who trains you for decisions: a peer who pressure-tests your decisions before reality does. Not a coach (who works on the person) and not a consultant (who delivers a recommendation): a sparring partner works on the decision itself, in confidence.
- The process floor
-
The threshold below which an organization can no longer cut its processes without losing its ability to control. Above the floor, every additional process slows you down; below it, removing a process creates a blind spot. Most organizations operate above the floor without knowing it, because removing a process takes a kind of courage the quarterly calendar does not reward.
- Decision speed as a factor of production
-
In classical economics, the factors of production are labor, capital and technology. Decision speed appears in none of the models. Yet two organizations with the same resources pull apart depending on how quickly a signal becomes action. Decision speed is the invisible factor of production, and the one that artificial intelligence transforms most directly.
- Decision architecture
-
The formal and informal structure through which an organization turns a signal into action. Decision architecture covers approval chains, how mandates are allocated, dashboard formats and governance rituals. It is not the org chart: two companies with the same org chart can have radically different decision architectures.
- The cost of delay
-
All the losses, direct and indirect, caused by the delay between detecting a signal and implementing a decision. The cost of delay appears on no budget line. It shows up as lost market share, departed talent and options that are gone. The classic example is still La Redoute (a French mail-order retailer): a signal readable for ten years, then a sale for a symbolic one euro.
- The Flash Read
-
The Exelvys trial format for decision sparring. Thirty minutes on a decision you are working through, three signals and one blind spot, no slides and no obligation to continue. The format rests on a simple principle: if a peer’s perspective is useful to you, you will know within half an hour.
Let’s talk about your situation
Peter Guillon will call you back within 8 business hours.
