Decision Effectiveness

How effective is your organisation at making decisions?

Bad decisions are made in organisations every day. Whether it’s fuzzy goals, competing interests, bad assumptions, not enough time or insufficient information there are countless hurdles to good decisions. We find time and time again that decision making is one of the most overlooked capabilities of an organisation. With other challenges such as business performance, changing consumer needs, volatile markets and rapid digitalisation of goods and services it is easy for leadership to skip over investment in an executive team’s decision making capability.

Too often, unclear decision rights and process result in misalignment among leaders, causing competition, power struggles, accountability gaps and ultimately hindering an organisation’s ability to make good decisions and get things done.

We believe a well-run organisation must be able to make swift, high quality decisions with minimal fuss or confusion. We help organisations untangle who is accountable for a decision, who makes the decision and who is involved in a decision. We recommend setting up a clearly defined and communicated decision making framework and decision rights. This sets the foundations for embedding decision making routines and behaviours that enable better and swifter decision making.

Typical decision making challenges can arise in the following areas:

• Which decision rights do the head of sales or marketing have in defining profit targets?
• What decision rights do marketing have in the development of new products or services?
• Which executives should be involved in decisions around new strategies?
• Who decides the project or investment priorities for the organisation?
• What happens if there are different views on decisions?

If the answers to these types of questions are not clear to an executive team then there is an opportunity to dramatically improve decision making and collaboration in your organisation.

At DCS we recommend organisations who embark on improving decision making effectiveness follow these steps:

• Identify a handful of decisions that are really important to your business and work on improving them first
• Develop a basic framework for defining decision support and rights e.g. who is involved in decision making, what roles do they place, who makes the final decision, who actions decisions?
• Apply the framework to the handful of important decisions to assess how useful the framework is in practice
• Ensure there is buy in to use the framework at regular decision making forums and get into the habit of using it for other important decisions
• Challenge each other when decisions are being pushed through outside of the framework. Keep your leadership committed to making effective decisions

On some level, making bad decisions is unavoidable. No one can always be right. But leading organisations tend to make fewer bad decisions when there is a purposeful and repeatable approach to decision making.