5 mistake (almost) all companies make in decision-making
Decisions are making or breaking the success of projects, teams, and companies — this is common knowledge, however, decision making seems to be an unpopular topic throughout organizations. Why is this?
Likely because decisions are mostly different and therefore hard to standardize. In contrast, the way decisions are made is easy put into a structure. This structure, or rather the absence of it, is often the root causes of poor decision-making.
As per a McKinsey study , less than 25% of managers say their firms excel in decision making.
Here are some reasons for why this might be:
1. No process for buttom updecisions
While the most important decisions are pretty obvious to the management, those are only the tip of the iceberg. Most decisions are required for the progress within the broader organization, often driven by “middle management”. Without easy access to the leadership, decisions are either 1) postponed until the next 1:1 2) triggered by overloaded e-mail chains that eventually get stuck or 3) just made on a lower level — which is great for speed but comes with various risks.
Establishing processes for each level of the organization to trigger decisions empowers employees, helps them grow, speeds up progress, and keeps decisions documented and structured.
2. No due date for a decision
Often, decisions that are due are acknowledged, but not tackled. In some cases, decisions should not be made because the uncertainty is too high, however, when postponing a decision, it should always be defined which piece of info is missing. As soon as it’s available, the decision should be made. If the uncertainty is not too high or the uncertainty will likely persist, a due date should be set immediately to get a decision made. This reduces uncertainty and shifts the focus from waiting for directions to execution.
3. Decision makers are not defined
When decision-makers are unclear, it has two reasons:
The decision feel too big for the initiator to assign or the decision is in-between areas of responsibility.
- Is the decision too big for you to be made? Escalate it and make sure to include the due date, all relevant info and known dependencies. Push your superior to assign a decision-maker or to escalate it further.
- Is the decision not exactly within your scope? Align with others who’re affected and appoint a decision-maker or decide that it’s a group decision. Important: document and share who makes decisions of this type in the future in order not to discuss the same issue again.
4. Stakeholders are not clearly mapped
Often, decisions are made without considering all implications of the decisions. It’s normal that some teams/folks who are affected were not considered in the decision-making process. It is important to communicate openly to those who were missed out initially and make sure that there is documentation for what to consider for such situations. Besides RACI (splitting stakeholders into Recommenders, Approvers, Consultants and Informees), there are many other Responsibility-Assignment-Matrix that provide guidance to keep everyone in sync.
5. No tracking/documentation of decisions
Especially in large or fast-growing orgs, similar decisions are made over and over. It’s frequent that an obvious idea proposed multiple times, consuming lots of resources. Having all decisions stored in one searchable place helps in reducing redundant decisions.