Every success and mishap; every opportunity seized or missed is the result of a decision that someone made or did not produce. Choices routinely get stuck and affect the performance, if you have not established decision roles. You will lose ground if you cannot make the right decisions quickly and consistently and execute those decisions.
"Wherever you see a successful business, someone once made a courageous decision." —Peter Drucker
What sets top performers apart is the quality, speed, and execution of their decision making. They shine when it comes to the critical operating decisions that need consistency and speed.
On an individual level “leads decisively” and “thrives in chaos” are the only two behavioural competencies that cut across all levels from manager to the C-suite. Our ladder of leadership provides a common of developing leaders to ensure the quality, speed, and execution of their decision making.
Teams have the potential to outperform individuals. High-Performance Decision-Making Teams do better because they have the right people working on a task. Team members have diverse skills and perspectives that create a multiplier effect.
On average, teams make better decisions 75 percent of the time. Teams rarely do worse than managers and executives. Since decision-making drives business performance, that decision advantage goes straight to the bottom line.
Decision-Making Bottlenecks
Ambiguity for the accountable person creates bottlenecks in the decision-making process. The conflicts below occur as both parties believe they should make the decision. Both have very valid reasons. Assigning it to one or the other will work. Not making it clear is a recipe for failure.
We need to think objectively about where we create value. Decision roles are assigned accordingly. This approach ensures that the people with relevant information can share it. Also, it provides clarity in decision-making responsibilities. This result is fewer cross-functional bottlenecks.
The decision maker is essential. However, it is more important to design a system that aligns decision-making and makes it routine. Common bottlenecks include team versus line manager, function versus function, HQ versus business unit, inside versus outside partners, and global versus local.
Function versus function decision-making
Decisions that cut across functions are among the most important a company makes. Indeed, cross-functional collaboration has become an axiom of business, essential for arriving at the best answers for the company and its customers. However, fluid decision-making across functional teams is still a constant challenge.
This conflict is the most common bottleneck. For instance, a team that thinks it is more efficient to decide without consulting other functions may wind up missing significant input or being overruled by another group that believes—rightly or wrongly—it should have been included in the process. Many of the necessary cross-functional decisions are difficult to orchestrate. So, the process is longer and the organization suffers a costly indecision. Cross-functional decisions too often result in compromise solutions—the lowest common denominator. Often the right people with a broad diversity of thought were not involved at the outset.
Decision Roles — Team versus line management
Each function has different incentives and goals. These are often in conflict, as few organizations align goals from top to bottom. When it comes down to a struggle between two functions, there may be good reasons to find the decision-making authority in either place.
This struggle occurs every time is the team is assigned a problem. The team believes it is empowered to make the decision. However, the line manager knows he or she will handle ongoing execution. Having rescued dozens of projects, I have noted that there is a critical success factor that has either been missed or messed up: clarity around the decision roles and responsibilities for each project participant and critical stakeholder. Regardless of the level of detail in the project plan, confusion or omission of participant roles and responsibilities will cause significant problems.
The RACI matrix is the most straightforward and most effective approach I have seen to address this shortcoming. The RACI model is used to define, and document decision roles and responsibilities. Integrating the RACI model into the team charter creates great cooperation that enhances and improves project outcomes and communications between the group and the line function.
Decision Roles — Global versus local
This conflict occurs in every primary business process and function. Companies struggle with how much authority local businesses should have to tailor products, determine pricing and advertising for their markets. You need to avoid becoming either mindlessly global or hopelessly local. If decision-making authority slants too far toward global executives, local customers’ preferences can easily be overlooked, undermining the efficiency and agility of local operations. However, a company is likely to miss significant economies of scale or opportunities with global clients if it provides the local unit with too much decision authority.
Decision Roles — HQ versus business unit
Organizations often grow into this type of problem. In small and midsize companies with a single management team effectively handles every major decision. However, as the company grows, its operations become more complex. The senior team can no longer master the details needed to make decisions in every business.
The business unit is on the front line and closest to the customer. The HQ sees the big picture, sets broad goals, and keeps the organization focused on winning. Should a significant capital investment, depend on the approval of the business unit that will own it, or should headquarters make the final call?
The arrival of a new CEO, creates similar tensions, as there is a change in management style.
Decision Roles — Inside versus outside partners
Outsourcing, joint ventures, strategic alliances, and franchising is increasingly common. In these arrangements, companies need to be clear about which decisions can be owned by the external partner.
Decision-making within an organization is hard enough. Trying to make decisions between separate organizations on different continents adds layers of complexity that can dismantle the best strategy. Companies that outsource capabilities in pursuit of cost and quality advantages face this very challenge.
Which decisions should you make internally? Which decisions should you delegate to outsourcing partners?
These questions are also relevant for strategic partners. There is no right answer to who should have the power to decide what. However, the wrong approach is to assume that contractual arrangements can supply the answer.
Clearing the Bottlenecks
"It is hard to imagine a more stupid or more dangerous way of making decisions than by putting those decisions in the hands of people who pay no price for being wrong." — Thomas Sowell
The most crucial step in unclogging decision-making bottlenecks is assigning clear decision roles and responsibilities. Good decision-makers recognize which decisions matter to performance. They think through who should recommend a path, who needs to agree, who should have input, who has ultimate responsibility for making the decision, and who is accountable for follow-through. They make the process routine. The result: better coordination and quicker response times.
Companies have devised several methods to clarify decision roles and assign responsibilities. The two that I found to be the most effective are:
- RACI decision matrix in the team charter. RACI — responsible, accountable, consulted and informed
- RAPID — the letters stand for the primary roles in any decision-making process: recommend, agree, perform, input, and decide.
These tools evolved over the years, help develop clear decision-making guidelines. The models will fail if you have an indecisive decision maker — the weak link. However, it is an important start and finds if you have a people problem or a process problem.
Clarity Essential for Decision-Making
Good decision-making depends on assigning clear and specific roles. However, many organizations struggle to make decisions because too many people believe they are accountable—or no one does. RAPID and RACI give senior management teams a method for assigning decision roles and involving the relevant people. While the RACI matrix was developed for projects, it is equally useful for clarity related to processes. Combining RAPID and RACI works best. Add sub-headers in the RACI matrix for each of the RAPID stages. Be clear regarding who has input, who are informed, who gets to decide, and who gets it done.
RAPID
Paul Rogers and Marcia Blenko developed the RAPID approach at Bain Consulting.
Recommend—People in this role handle making a proposal, gathering input, and supplying the right data and analysis to make a sensible decision quickly. While developing a plan, recommenders consult with the people who provide information, not just hearing and incorporating their views. They are also building buy-in along the way. Recommenders must have analytical skills, common sense, and organizational smarts.
Agree—Individuals in this role have veto power—yes or no—over the recommendation. Exercising the veto triggers a debate between themselves and the recommenders, which should lead to a modified proposal. If that takes too long, or if the two parties cannot agree, they can escalate the issue to the person who has the decision authority.
Input—People who you need to consult on the decision. Because the people who supply information are typically involved in implementation, recommenders have a keen interest in taking their advice seriously. No contribution is binding; however, this should not undermine its importance. If the right people are not involved and motivated, the decision is far more likely to falter during execution.
Decide—The person with the decision authority is the formal decision maker. He or she is accountable for the decision, for better or worse, and has the power to resolve an impasse in the decision-making process and to commit the organization to action.
Perform—After making a decision, a person or group of people will handle executing it. In some instances, the people responsible for implementing a decision are the same people who recommended it.
RACI
Responsible—Who is completing the task. People or stakeholders who do the work. They must achieve the mission or aim or make the decision. Several people can be jointly responsible.
Accountable—Who is making decisions and taking actions on the task(s). Person or stakeholder who is the "owner" of the work. He or she must sign off or approve when the task, objective or decision is complete. This person ensures the assignment of responsibilities in the matrix for all related activities. Success requires that there is only one person Accountable, which means that "the buck stops there."
Consulted—Who will you communicate with about decisions and tasks. People or stakeholders who need to give input before the work is complete and signed-off on. These people are "in the loop" and active participants.
Informed—Who will you update on decisions and actions during the project. People or stakeholders who need to be kept "in the picture." They need updates on progress or decisions. However, you do not need to consult with them formally. They do not contribute directly to the task or decision.
The Process
Writing down the decision roles and assigning accountability are essential steps. However, good decision-making also needs the right process. Too many rules can cause the process to collapse under its weight. The most effective method is grounded in specifics, however, simple enough to adapt if necessary.
When the process gets slowed down, the problem can often be traced back to one of three trouble spots.
First is a lack of clarity about who has the decision authority. If more than one person think they have it for a decision, that decision will get caught up in a tug-of-war. The other side can be equally damaging: No one is accountable for crucial decisions, and the business suffers.
Second, a proliferation of people who have veto power can make life tough for recommenders. If a company has too many people in the “agree” role, it usually means that decisions are not pushed down far enough in the organization.
Third, if there are many people giving input, it is a signal that at least some of them are not making a meaningful contribution.
Alternatives
The people who recommend a course of action handle proposing or offering options. They need data and analysis to support their recommendations, as well as common sense about what is reasonable, practical, and useful.
The people who agree to a recommendation are those who need to sign off on it before it can move forward. If they veto a proposal, they must either work with the recommender to produce an alternative or elevate the issue to the person with the decision authority. For decision-making to function smoothly, only a few people should have such veto power. They may be executives responsible for legal or regulatory compliance or the heads of units whose operations will be affected by the decision.
You consult people with input responsibilities about the recommendation. Their role is to supply the relevant facts that are the basis of any good decision: How practical is the proposal? Where there’s dissent or contrasting views, it is essential to get these people to the table at the right time. The recommender has no obligation to act on the input he or she receives, however, is expected to take it into account—particularly since the people who supply information are among those who must implement a decision. Reaching a consensus is a worthy goal. However, as a decision-making standard, it can be an obstacle to action or a recipe for lowest-common-denominator compromise. A more practical aim is to get everyone involved to buy-in to the decision.
Eventually, one person will decide
"On an important decision, one rarely has 100% of the information needed for a good decision no matter how much one spends or how long one waits. And, if one waits too long, he has a different problem and has to start all over. This is the terrible dilemma of the hesitant decision maker." — Robert K. Greenleaf
The decision-maker is the single point of accountability. They must bring the decision to closure and commit the organization to act on it. The person with the decision-making authority needs sound business judgment, a grasp of the relevant trade-offs, a bias for action, and a keen awareness of the organization that will execute the decision.
A good decision executed quickly beats a brilliant decision implemented slowly.
The final role in the process involves the people who will perform the decision. They implement the decision promptly and effectively. It is a crucial role.
RAPID helps organization target a single bottleneck. Some entities use the approach for the top ten to 20 decisions. Other companies use it throughout the organization. When people see an effective process for making decisions, they spread the word.
To see the process in action, read Rogers and Blenko's article, Who Has the D?: How Clear Decision Roles Enhance Organizational Performance. It provides insights regarding the way four companies worked through their decision-making bottlenecks using the RAPID process.
The Decision-Driven Entity
An ability to make good decisions and to make them happen quickly is the defining characteristic of high-performing organizations. The companies that succeed tend to follow these principles.
Some decisions matter more
Your choices that are crucial to building value in the business are the ones that matter most. Some are big strategic decisions, while others are tdecisions that drive the business day today. These decisions are vital to effective execution.
The action is the goal
Good decision-making does not end with a decision; it ends with implementation. The aim should not be consensus, which often becomes an obstacle to action. You want to get buy in from all involved.
Ambiguity is the enemy
"The worst business decision you can make is no decision. The needs are not going to go away. Waiting is whats gotten us in the situation we're in now." — John Peace
Clear accountability is essential: Who contributes input, who makes the decision, and who carries it out? Without clarity, gridlock and delay are the most likely outcomes. Transparency does not necessarily mean concentrating authority in a few people; it means defining who has the responsibility to :
- make decisions
- provide input
- is charged with putting them into action
Speed and adaptability
An entity that makes good decisions quickly has a higher metabolism. This allows it to act on opportunities and overcome obstacles. The best decision-makers create an environment where people can come together soon and efficiently to make the most critical decisions.
Decision roles trump the organizational chart
"Decision is the spark that ignites action. Until a decision is made, nothing happens.... Decision is the courageous facing of issues, knowing that if they are not faced, problems will remain forever unanswered." — Wilfred A. Peterson
No decision-making structure will be perfect for every decision. The key is to involve the right people at the right level in the right part of the organization at the right time.
A well-aligned organization reinforces roles
Clear decision roles are critical. However, they are not enough. If an organization does not enhance the right approach to decision-making through its measures and incentives, information flows, and culture, the behaviour will not become routine.
Practicing beats preaching
By involving the people who will live with the new decision roles in designing them. The very process of thinking about new decision behaviours motivates people to adopt them.
RACI Matrix Advantages
Streamlining Communication — The RACI matrix is useful to refer to throughout the life of a project or process. With simplified communication, you no longer need to involve every person in every decision.
Balancing Workload — When you get opinions from everyone, it is difficult to incorporate everyone’s point of view. You separate those involved in feedback and those who you only update on progress on the task.
Avoiding Overload and Silos —Today people wear many hats. They take on much responsibility and often covering multiple decision roles on a project or process. The RACI matrix mitigates having a single point of failure, where all knowledge and responsibility for a task rests on one person, therefore creating silos.
Setting Clear Expectations — You create many efficiencies by using a RACI matrix. It establishes expectations for who is managing or responsible for work going forward. The folks involved can see where they need to be involved, and with which tasks. It can also help cut confusion by knowing who is accountable for task completion. It is useful to set expectations with more senior stakeholders who you will inform on the project: it will allow them to know what information they will receive as part of the plan.
RACI matrix best practices
Merely creating a RACI matrix for the project or process is not enough. You must ensure that the model maps to a successful strategy. The table below sets out questions to explore before finalizing your RACI matrix.
Variable | Questions |
---|---|
Analysis of stakeholders | |
Too many R's | Does a stakeholder have too much of the project assigned to them? |
No empty cells | Does the stakeholder need to be involved in so many of the activities? Can Responsible be changed to Consulted, or Consulted changed to Informed? I.e., are there too many "cooks in this kitchen" to keep things moving? (And if so, what does that say about the culture within which this project is being managed?) |
Buy-in | Does each stakeholder agree with the role that they are specified to play in this version of the model? When such agreement is achieved, that should be included in the project's charter and documentation. |
Analysis of each step or deliverable | |
No R's | Who is doing the work in this step and getting things done? Whose role is it to take the initiative? |
Too many R's | Is this another sign of too many "cooks in this kitchen" to keep things moving? |
No A's | Who is Accountable? There must be one 'A' for every step of the Project or process. One stakeholder must be Accountable for the thing happening -- "the buck stops" with this person. |
More than one A | Is there confusion on decision rights? Stakeholders with accountability have the final say on how the work should be done and how conflicts are resolved. Many A's invite slow and contentious decision-making. |
Every box filled in | Do all the stakeholders need to be involved? Are there justifiable benefits in engaging all the stakeholders, or is this simply covering all the bases? |
Many C's | Do all the stakeholders need to be routinely Consulted? Can they be kept Informed and raise exceptional circumstances if they feel they need to be Consulted? Too many C's in the loop slows down the project. |
Are all stakeholders included in this model | Sometimes this is more of a challenge to ensure, as it is an error of omission. A steering committee or management team often best address this. |
A Decision Diagnostic
Consider the last three meaningful decisions you have been involved in and ask yourself the following questions. Moreover, it is an excellent framework for a project post-mortem discussion.
- Do we believe that we made the right decision?
- Did we decide with the right speed?
- Was the decision executed well?
- Did we involve the right people, and in the right way?
- Was it clear, in advance, for each decision, who would recommend the solution, who would provide input, who had the final say, and who would be responsible for following through?
- Were our assigned decision roles, process, and period respected?
- Did we make evidence-based decisions using the relevant facts?
- To the extent that there were different facts or opinions, was it clear who had the decision-making authority?
- Were our decision-makers at the proper level in the company?
- Did our measures and incentives encourage the people involved to make the right decisions?
Concluding Thoughts
Like many things progress boils down to people and process. This insight focused on importance of defining decision roles process. You need to spend as much effort on select the right people into leadership roles. I am a big proponent of evidence-based decision making. Our analytic will help you ensure the best people are in the decision-making roles.
SuccessFinder Predictor of Success
Predictor of Career Success | Typical comments of peers, managers and direct reports | Score Range | "Average or Better" Performer | "High" Performers | "Average" Performers | "Marginal" Performers |
---|---|---|---|---|---|---|
Excellent | "Amazed by her/his abilities." "Has an overriding impact on company results." "Everything s/he does is excellent." "Innately talented, and amazing to watch." | 80-100 | 98% | 80% | 18% | 2% |
Very Good | "One of our best employees in this role." "Has outstanding future potential." "Adept, and most capable." "Talented and professional." | 70-79 | 92% | 78% | 14% | 8% |
Good | "Consistent, solid performer." "Predicted to deliver good results." "Few peaks and valleys." "Sets good personal standards." | 60-69 | 82% | 51% | 31% | 18% |
Average | "Expect s/he will develop over time." "Good Potential with time." "Needs direction and strong leadership." "Not stretching to full potential." | 50-59 | 54% | 22% | 32% | 46% |
"Low" to "Low Average" | "Better suited to another role." "Adequately fulfills requirements." "His/her heart is not in the job." "Others could do more with this position." | below 50 | 24% | 6% | 18% | 0.76 |
Excellent—Individuals scoring in this range are predicted to have an exceptional future and the highest probability of rapid advancement in this career. If there is a problem, it will be due to career impatience, because the readiness to advance will be faster than most organizations can sometimes accommodate. Most with this score are predicted to ascend to the top of the field and can make a significant contribution to their chosen career.
Very Good—When tangible productivity is tallied, individuals in this range are predicted to be among the highly successful performers and are further predicted to advance more quickly and succeed with little difficulty. More importantly, the all-round consistency and proficiency demonstrated in this career choice will be difficult for the majority to match. It is predicted that the potential for success in this career will be recognized quickly.
Good—Success is predicted in this career, as is on the job performance. More importantly, performance and advancement potential are expected to steadily increase with experience. In summary, there is a good probability that pursuit of this career would offer good advancement and career satisfaction.
Average—Slower advancement (or some difficulty or frustration) is predicted with this career long-term, because of the 3-5 lowest Key Behavioral Traits and/or lower Key Career Interests.
Low to Low Average—This is a questionable career choice compared to other alternatives. At best, it is an atypical profile when compared those who are rated as highly successful performers in this field. The degree of difficulty needed to succeed, or quickly advance, in this career is predicted to be much higher than for those whose profile more closely aligns with high performers.
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