A good friend of mine recently moved from being a Senior Partner in a Law Firm to an Executive with a Global Financial Institution. Having served large institutions in their M&A for over 30 years, he thought he knew how corporates worked. One of the biggest shocks was the number of meetings and endless global conference calls, the number of people involved in any number of decisions and the sheer magnitude of the “politics” and “noise” involved to decide on seemingly obvious things. Large organisations are rife with lobbying; aligning large numbers of stakeholders prior to meetings; and lack of clarity on how to actually get decisions through.
Decision making in most organisation isn’t too dissimilar. Lots of people feel they need to be part of the Decision Making Process (DMP). To start with, the actual process isn’t defined nor are the roles. It can take as much time to define the DMP as it takes to actually decide. This is all wasted energy.
In top soccer teams and all top professional sports teams, everyone knows their role, watching them work can be visual poetry. Knowing how to hand-off to each other and trusting the other person will do their job.
The process of defining the DMP is pretty simple: Define the decisions; define the accountability matrix for each one; reflect on the practicality of the structure -> will it actually work? Will it be efficient? Will it lead to good, timely decisions?
For each decision, think through who the main “Decider” is. The person responsible for ensuring the decision is made. Related to this is who else needs to “Approve”. Organisations often want to define additional roles, for instance who needs to be consulted prior the decision being made or who has to be informed once the decision is made. When defining the Decision Accountability Matrix, it can feel like a good thing to define these roles. However, be careful, it can increase effort hugely and lead to many futile debates.
In thinking through the do-ability, think through the amount of “political noise” that will be generated by the numbers involved. The more people who need to be involved the more: corridor conversations; lobbying & influencing; diaries to co-ordinate for that all important meeting (and how often are decisions really made in meetings anyway?). The below graphic highlights the increasing number of possibly side-line one-to-one conversations as the number of approvers is increased.
Therefore, quantify the numbers of those involved in the DMP. Think through if the increase in the number of approvers will lead to better results – improved decision & meaningful buy-in and therefore chance to effectively execute the decision. Could the results be improved through a less expensive method? Will being an Approver really have the desired impact?
Like so many elements of effective organisational design, think through the unintended consequences of the design. Think about the underlying cost and true practicality. A little bit of thought can save a huge amount of noise, effort and frustration. Leaving this unattended will eventually lead to the size of the organisation and complexity of the stakeholders involved jamming up the entire system. Equally, thinking that the CEO therefore needs to decide everything is clearly a folly. This is just another bottleneck. Design for success; design for simplicity and design once; if you don’t then as H. A. Hopf said: “Indecision is debilitating; it feeds upon itself; it is, one might almost say, habit-forming. Not only that, but it is contagious; it transmits itself to others.”