Businesses run on decisions.
Every working day is a torrent of situations to understand, options to evaluate and decisions to make.
Decision-making spans the entire organisation. It runs from high volume micro-decisions to big bets that shape the future of a business.
Yet it amazes me how little attention is paid to how decisions are made.
We prevaricate too much over some decisions, while wilfully ignoring the significance of others. Our natural human biases are baked into decisions.
People avoid making decisions. They fear of consequences of making a perceived mistake. They’re unsure whether they have the permission to make a call on something that matters.
In hierarchical organisations people with management responsibilities get decisions escalated to them.
They lack the contextual knowledge needed. The sheer volume of decisions ending up with them causes overwhelm. They slow down the pace of the business and frustrating those around them.
The pivotal act of decision making is neglected. The shadow of that neglect is cast over the future of many businesses.
But it doesn’t have to be like this.
Brilliant businesses and their leaders decide about deciding.
They are deliberate about where and how decisions are made.
They create clear boundaries for decision-making autonomy. By doing this they unleash the latent potential in their people.
They have guardrails for decision-making. They create proportionate processes that they expect their people to follow.
They expose decision-making and its supporting rationale widely. They drive transparency and so widen situational awareness in their businesses.
There are three steps that leaders should take to improve decision-making:
- Define boundaries for decision-making on a per-role, per-individual or per-team basis.
There are many ways to articulate boundaries for decisions. Do this through criteria that are easily interpreted and that will endure for as long as possible. Don’t produce a definitive list of what’s in or out of an individual’s decision-making orbit. It won’t age when you scale. Instead help them understand where the boundaries lie and will shift.
- Have a clear and shared decision-making process. I love decision-making processes because they make methods explicit.
Groups often start a discussion without being clear how a decision is going to be made. They default to consensus as the basis for a decision without considering if that is the best way to decide.
A decision-making process provides consistency in what a business wants to happen. It encourages deeper reflection. It ensures the right people are involved according to the nature of the decision being made. It can raise consciousness of human biases in assessing options.
And it helps build trust and grow confidence for those taking decisions.
- Be context conscious in your decision-making process.
Decision-making will always be imperfect. In complex systems we can never wholly understand what will happen when we implement a decision. The consequences of decisions vary a lot.
That means we have to be OK with the consequences of a decision. Even when those consequences aren’t our desired outcome.
But it does mean we need to think about effort and risk in a particular decision-making context. The effort going into a decision needs to be considered alongside the potential outcomes from that decision.
Amazon has some famous principles that guide decision-making. They talk about one-way and two-way doors as descriptors for consequences of decisions. Some decisions are irreversible so merit different consideration to those that can be reversed out of quickly.
What are your equivalent of Amazon’s one-way and two-way doors? How can you build this kind of contextual awareness into your decision-making process?