What is the key decision making process in your organization? Untangling your organizations decision making, is a tricky business. With all the latest research, leaders also are much more aware today than they were 20 years ago of the cognitive biases—anchoring, loss aversion, confirmation bias, and many more—that undermine our decision making. Being clear about what decisions need to be made and who owns them is something I’m working on with a client right now. And there are lot of decisions to be made.
“72% of senior-executive respondents to a McKinsey survey said they thought bad strategic decisions either were about as frequent as good ones or were the prevailing norm in their organization.”
McKinsey suggests the following framework. Think about the decisions facing your organization and where they fall in the below categories.
- Big-bet decisions. These infrequent and high-risk decisions have the potential to shape the future of the company.
- Cross-cutting decisions. In these frequent and high-risk decisions, a series of small, interconnected decisions are made by different groups as part of a collaborative, end-to-end decision process.
- Delegated decisions. These frequent and low-risk decisions are effectively handled by an individual or working team, with limited input from others.
- Ad hoc decisions. The organization’s infrequent, low-stakes decisions are deliberately ignored in this article, in order to sharpen our focus on the other three areas, where organizational ambiguity is most likely to undermine decision-making effectiveness.
Many of the projects I work on are cross-cutting decisions. Here’s what I’m working with this week for my client – the key steps to clarity:
- Map out the decision-making process, and then pressure-test it.
- Roll a marble through the system – or do a test of a common situation.
- Establish steering committee, project team, and decision-making bodies.
- Create shared objectives, metrics, and collaboration targets – this last one is KEY to drive the behavior change.