Recently, I had the chance to watch a law enforcement official make a decision during a high-profile criminal investigation. Strong arguments could have been made for one of two options. Although this lead investigator clearly had the statutory authority to make the call unilaterally, he hesitated to do so. Instead, he opted for consensus among all of the agencies involved — in other words, a group decision.
His rationale was both high-minded and cynical. On the one hand, he knew that the vigorous debate to forge an agreement would mitigate blind spots and counter biases he might bring to the table. On the other, he also knew his decision would minimize second-guessing and back-channel griping to political officials or the media should things not go as planned.
The anticipatory moves and the potential outcomes that the lead investigator considered, both consciously and subconsciously, highlight how gingerly successful decision making must be approached. It also shows how easy it is to do poorly — especially now that the nature of decision making in organizations is undergoing radical change.
In traditional corporate hierarchies, decision making was seen as a scarce commodity, the province of a few managers on the flowchart. When a choice had to be made between one option or another — whether to add a larger taillight on a sedan, name a new supplier from competing bids, offer a job to a sales rep candidate, or simply pick a caterer for the company holiday party — a short list of scenarios was run up the chain of command. At some point, the buck stopped and a decision was made by the executive with the most authority in the immediate area of the company. The front lines were places for execution of decisions handed down from above. It was a measured and often slow process, centralized in corner offices.
Now, however, hierarchy is in retreat. Speed, agility, and responsiveness determine market gains or failure. Decision-making skill must be in ample supply and spread throughout the organization, including on the factory floor, at the tiny R&D lab in another country, and in the external sales office 6,000 miles away. Where once large parts of the organization could deflect, defer, or delay their way out of making a tough call, everyone at a company today needs to move fast, pivot smoothly, and then adapt quickly to choices made. And for executives now, embedding a decentralized, comprehensible, and coherent decision-making culture, one that ensures consistently superior choices in rapidly evolving circumstances with increasing transparency to a range of stakeholders, is a critical factor in career and organizational success.
Decision-making skill must be in ample supply and spread throughout the organization.
Here are three steps for a stellar decision-making organization:
Articulate the decision process. There are many ways to make a decision: You can make a unilateral call. You can take input from multiple sources and then decide. You can take a vote. You can work to consensus, as the lead investigator did. Each of these is valid in the right circumstances. Clearly expressing which approach you prefer achieves several objectives. It keeps you from falling into the rut of always using the same process — and too often coming to the same conclusions. It helps you educate and model good decision-making behavior for others. And it can ensure that you build certainty and clarity through a logical and stable decision-making strategy even when the outcome is not assured.
Create values-based guideposts. Making decisions always involves risk. While getting it right can garner praise, getting it wrong could have serious consequences. It may attract the ire of your boss or a customer. At the extreme, it can be a career-ender. If you expect people throughout the organization, even at lower levels, to take this risk, you must accept that not every decision will play out the way you would hope. Failure is always an option and definitely a possibility. Simple rules for decision making rooted in adding value to the organization foster a willingness to make difficult choices confidently and provide a means for decision-quality assessment.
A resource development company that I have studied prioritizes its operations in this order: people, environment, and business. People always come first and when they make decisions, they are only judged by how carefully they have considered the impact on the environment and the business. When the decision could be explained in terms of what was known at the time and how potential value in these areas drove the choices, the individuals making them were not only supported — they were celebrated.
Teach decision making. For all of the importance of decentralized decision making in organizations today, few people are trained in how to do it well. The “making good choices” skill seems to fall into the “born, not made” bucket, though that need not be the case. Carl Spetzler, CEO of the Strategic Decisions Group, has studied this issue intensively and in a new book, Decision Quality: Value Creation from Better Business Decisions (Wiley, 2016), he and his coauthors lay out a step-by-step method for achieving higher decision quality.
Spetzler’s approach, which is essentially a series of exercises for evaluating choices, could be a good starting point for taking the art and science of decision making seriously. Accept that many inherent human foibles and limitations inhibit our ability to assess risk, unearth creative options, and make the most appropriate choices. Our natural outcome bias, for example, impedes our evaluation of previous decisions — a critical learning opportunity. People build proficiency by learning core skills, practicing, stumbling, learning from mistakes and successes, and eventually by teaching others.
Because employees today move from organization to organization more frequently than before, it is not enough to assume that long periods of observation and mentorship are sufficient to develop decision-making capacity in individuals. For that reason, it is critical to treat decision making as a core skill worthy of investment in training, just like Six Sigma or any other approach that propels strategic and operational excellence.
Analytics have driven a revolution in data-driven decision making. However, it is important to remember that driving decisions and making them are two different things — for consequential decisions across a broad spectrum, humans must make the final decisions. And how that turns out should not be left to chance.