Decisions are the lifeblood of any business. They precede action. They are highly correlated to outcomes. They compound, for better or for worse, in that a series of low-impact good or bad decisions can have a multiplier effect on resulting outcomes.
Business cultures that make mainly good decisions are usually not random or accidental. The same is true for cultures that for the most part make as many bad decisions as they make good ones.
What sets apart cultures that seem to have an affinity for routinely moving towards good decisions?
McKinsey recently published an article titled “Reimagine decision making to improve speed and quality” highlighting some best practices that underpin the craft of making good decisions.
The article points to segmenting different decisions, so more time is spent on decisions that are likely to be “game changers”.
They recommend making meetings effective and efficient.
They suggest clearly designating decision makers distinctly from other participants involved in the decision-making.
Finally, they call to push decision-making authority to the front-lines, close to where the action is, and to intelligently tolerate mistakes.
But what if you want to improve more than just speed and quality? What if you want the kind of decision-making that will raise your team’s game in ways that propels your business to the next level in terms of performance and results?
Consider the four best practices below to improve your team’s decisions. When these become habits, you can expect to see a multiplier effect on business performance and outcomes.
One, drive deliberate and disciplined high-quality debate on the most important issues.
Teams need three key skills to do this. Your organization needs the ability to systematically and consistently
- SURFACE the most important issues, so the focus moves from identifying and discussing symptoms to digging deeper to find the root causes,
- EXAMINE the issues once they are properly surfaced to gain a deeper understanding of cause and effects, and to consider ideas for resolution,
- RESOLVE the issues effectively encouraging constructive conflict and steering the decision-making towards what’s best for the business. An important part of this step is to ensure that there is:
- A clearly identified course to move towards issue resolution,
- A clear owner for the issue resolution,
- Deep clarity and tight alignment across the team about how the issue will be resolved and who is accountable.
Two, get your team to a place of deep clarity and tight alignment around decision-making roles and processes.
Work first with your top-team and then your entire organization.
It’s not enough that those who are accountable for decisions and processes be clear themselves. Everyone else on the team must also be clear and tightly aligned about the contours of the decision-making landscape.
Three, clearly communicate the broad guidelines for decision-making.
The guidelines must be consistent from the top-team to the front-lines of the organization.
It makes sense to establish a culture of empowerment that allows decisions to be made close to the front-lines, where the impact is greatest. However, for that approach to be effective, it’s equally important to share a common framework that underpins and guides decision making in response to unique operational circumstances.
The following four essentials, shared across the organization, can help inform and guide effective decision-making across a diverse array of roles ranging from leaders to cross-functional front-line staff.
- Purpose of the business
- The most important current strategies and priorities
- Core company values and behaviors
- The key accountabilities that underpin each person’s role
Four, establish a meeting cadence.
Establish a cadence of weekly, monthly, quarterly and yearly meetings that reinforce each other and provide structured forums for decision making on issues that are important, but not necessarily urgent.
These meetings, if done right, provide training and practice the team’s decision-making muscles needed to be effective on the fly, in situations where there isn’t opportunity to have deliberate and high quality debate.
Decisions are the lifeblood of any business. They precede action. They are highly correlated to outcomes. If you think of your business as a rocket ship, the collective decisions your organization makes is the rocket fuel. If you want to fly faster and farther, you don’t want anything other than the best fuel in the tank.
Ask yourself how effective your organization’s decision-making is on the most important issues for your business? What actions are you taking today to elevate decision-making effectiveness for your top team and across your organization?