Recently I posted about the responsibility leaders have for making decisions, and identified six disciplines necessary for better decision-making. This post describes the second of those disciplines, clear decision rights.
It is a rare day when leaders do not have to make decisions of some consequence. Whether deciding how to respond to an unexpected move by a competitor or supplier, what features to include in a new product, or choosing between two promising candidates for a job, decisions are a daily occurrence.
One of the pitfalls that often gets in the way of effective decision-making is unclear decision rights. Simply put, any decision that needs to be made should have a clear owner and time frame associated with it. Yet I’ve seen three kinds of “acts” lead to indecision:
In acts of omission, nobody has clear accountability for a decision. I’ve often heard (and used) the phrase, “Acts of omission are worse than bad acts of commission.” Not making a decision is equivalent to deciding to do nothing, and an organization that decides to do nothing is a dying organization. In a bad act of commission, a wrong decision may have been made, but at least there was engagement and action. Aside from the possibility of a catastrophic outcome, making a wrong decision is generally reversible or recoverable and better than making no decision at all. Companies that have strong cultures of accountability are best at avoiding acts of omission. A manufacturing company I’ve worked with spoke of individuals “having the dot.” Literally, a dot appeared next to their name in a chart of key activities and decisions. Clarity ruled.
In acts of confused commission, more than one person feels accountable for a decision. On the surface it seems that with a well-defined organization and clearly delineated responsibilities this should be infrequent. But areas of accountability are typically not as clear as an organizational chart would suggest. Is the head of operations responsible for choosing a construction contractor or is it the head of real estate? Or is it the capital committee? These ambiguous roles are everywhere and without clarity comes the risk of multiple decision makers, conflict, and delay.
The most insidious of the three are acts of organizational antibodies. Despite careful stakeholder analysis, there may be some in the organization who, without legitimate reason to participate in a decision, find a way to derail it. There is an archetype of these antibodies: mid-level, long-tenured managers who have personal connections to a senior executive or the CEO. I’ve seen these quite often in family businesses where there is a long-serving CEO with whom these mid-level managers have cultivated relationships. Should an antibody feel threatened by change that’s being considered, they will spring into action, using their direct line to the CEO or other executive to cause mischief. Knowing in advance who these antibodies are and engaging them in the decision-making process may be the best way to inoculate against them. Of course, that adds complexity to the process and could slow things down, but not nearly as much as having a well-considered decision derailed at the last minute.
The importance of effective decision-making cannot be overemphasized. Agreeing that a decision needs to be made is an obvious first step. Agreeing on who will make the decision (and who will not) and by when is an often overlooked second step that can undermine the best analytic approaches.
Photo: Boston Customs House - November 28, 2009
For over 20 years, I've worked with CEOs and senior leaders both as a consultant and c-suite executive. These articles are culled from some of those experiences.