From a Maze to a Clearway

The road to better decision-making in organisations

By Matthew Rogozinski

We so often hear business leaders and teams complaining about the way decisions are made in their organisation:

• Decisions take too long: there are too many committees involved in decision-making, and poor discipline in coming to decision closure;

• Too much time is spent on resolving minor problems and not enough on business-critical issues;

• Many stakeholders expect to have a say in decision-making when it is unclear what value they add;

• Decisions can be made in very different ways for no apparent reason.

In essence, it’s a freewheeling cycle within a kind of corporate maze. What propels it is a fundamental confusion in many organisations about how business-critical decisions should be made and the precise role anyone should play in that process.    

So what are the principles that underlie sound, robust decision-making in large, complex enterprises? In our view, there are just five: 

1. The people involved in decision-making must play a set of clearly defined roles;

2. The task of decision approval is assigned to the most fitting role at the lowest appropriate level of the organisation;

3. Accurate, up-to-date, relevant information is easily accessible to support informed decision-making;

4. Decisions are guided by a set of simple protocols and processes that are clearly documented and available to all decision teams. Decisions are escalated on the basis of established financial and non-financial guidelines and delegations that are well understood by all involved in decision-making;

5. People involved in decision-making are expected to be constructive and focused on the efficiency and effectiveness of the decision-making process. Their performance on this dimension is regularly evaluated by their manager.

When these principles are agreed, the next step is to systematise decision-making across your enterprise. Our approach starts with identifying and categorising decisions that the organisation makes on an ongoing basis, assigning decision-making roles, optimising the protocol for each decision, and identifying relevant sources of information for informed decision-making. 

Our experience shows that there are usually not more than 50 or so important issues that organisations (say, a division in a large corporation) make regular decisions on. Staff members from relevant parts of the organisation are involved throughout this process to bring their perspective on the changes necessary to align each decision protocol to the agreed principles.

An integral component of our approach is setting and embedding expectations about the behaviours that need to prevail to guarantee the success of the decision-making architecture, for example:

• Agreed decision-making roles will be adhered to;

• Staff involved in decision-making will be accountable for their tasks and will follow the delegation protocols;

• Everyone involved in decision-making will trust the inputs of their colleagues;

• Anyone not meeting the expectations set for each role will be called out by fellow members of the decision team; and

• Decisions will not be revisited after they have been made, unless significant new information is revealed.

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When the new decision architecture is in place, the leadership team can expect: 

• Better quality decisions taken, due to clear accountabilities, tighter risk controls, and a consistent approach;  

• Faster decision-making, with no ambiguities of roles; 

• Most key decisions to be approved by individuals, as committees become convenient forums for consultation;

• More time for themselves to engage in business-critical questions and issues that span the whole enterprise; 

• Strong buy-in into the new way of operating and frustrations evaporating when key people are involved from the start; 

• Constructive behaviours firmly engrained, as they become the only credible option in an environment of new decision-making practices. 

This is an organic approach to revitalising decision-making in any enterprise. In engaging people from across the organisation at every step it maximises its chances of success. If you are interested in knowing more about how our approach could be used at your organisation, please contact Inhance Partners.