By Alaina Love, SmartBrief.com

How well your organization makes decisions directly impacts the quality of the people you are able to hire and retain. This fact rang true as I watched Adam hurl a stack of performance appraisals across his office conference table.

“There are a bunch of capable people in this organization, but getting folks to make a decision and take action on it is an exercise in frustration!”

The evidence of his exasperation was etched firmly in the frown lines that had developed on his face over the 15 months since he’d accepted a position as the president of marketing for a midsized company. “We’ve made important and needed changes around here, but if we don’t fix this issue I don’t see how we will ever retain the best people who can help us grow the customer base or meet our goals,” he lamented.

Adam’s division had expanded rapidly, with more than half of the current employees new to their positions. It was apparent now, however, that making real progress required a deeper dive into how the team was making decisions, so we could understand the organizational roadblocks that prevented it from happening effectively.

Regardless of company size or industry, my experience has been that decision-making sins can be grouped into 7 categories, each of which has a distinct set of symptoms that play out in the culture of the organization. Do any of these look familiar in your own organization?

The Sin

The Symptom
Lack of an effective decision making process Decisions are frequently stalled or overturned, delaying progress and innovation
No decision making training for employees Large fluctuations in decision quality, more poor decisions than high quality ones
Inadequate guidelines for decision making closest to the customer

Customer-facing employees are unable to promptly resolve or address service issues, resulting in frustration for the customer and negative brand impact
“Empowering” employees to make decisions without adequate authority to take action

Employees are empowered to make decisions, but face obstacles to implementing them due to system or procedural restrictions or cultural resistance
Fear of failure The organization’s historical narrative indicates that making the wrong decision results in serious consequences, so employees resist taking responsibility for making or executing decisions.
Poor communication or lack of collaboration between stakeholders The organization operates in silos, with information so often hoarded that work is duplicated, decisions are made that solve the wrong problems or insufficient input is gathered to arrive at the best decision.
A “Funnel” or “Fan” decision-making culture causes all decisions to funnel to one person or fan out to multiple parties

Bottlenecks result as decisions “funnel” to one person. As more people than necessary have input, decisions “fan out” delaying action and compromising decision quality.

 

Facing the Facts

A short, but effective employee survey identified which of the 7 sins were at play on Adam’s team. It revealed that half of the employees felt empowered to make decisions, but less than 40% of them believed they had adequate information to assure their decisions were correct. Since team members were flying blind, I wasn’t surprised to find that almost 40% of respondents said senior management had reversed their decisions.

More concerning, though, was the fact that nearly a third of Adam’s team felt they’d personally experienced negative consequences for making a decision, so they became increasingly reluctant to take risks.

Another stumbling block uncovered by the survey was a “funnel culture” in the organization. One department’s long-tenured leader was reluctant to allow any decision to be implemented without his prior approval, so even the most minor ones were delayed unnecessarily. Worse, his department was ground zero for the development of young talent coming into the division, and the culture was causing employees with excellent potential to become quickly disillusioned with their career prospects.

“I’ll bet that’s why we lost some top recruits,” Adam reflected. “What smart young person wants to work under a command-and-control leader where they’re allowed zero autonomy on the job?”

Taking Action

Five important changes have been implemented since the survey that have significantly enhanced the division’s decision-making capacity and improved both team dynamics and talent retention.

  • Grants of authority. Adam set forth authority in a series of grants that outlined financial and procedural limits for decisions at every operating level in the division. Employees engaged in routine customer interactions were provided the authority they needed to solve common customer problems immediately, thus eliminating a major bottleneck that was fraying customer relationships. The process for addressing more complex customer issues was also streamlined. Further, in a remarkable demonstration of leadership trust, Adam provided a grant to his direct reports authorizing them to sign off on critical purchases and empowering them to renew contracts with external suppliers, while increasing their financial grants to a level that equaled his own.
  • Cross-functional teams. To improve information sharing and collaboration, cross-functional teams were established for key projects. As new projects evolve, the division has a process in place to staff those teams diversely, and leaders actively seek team participants beyond their own departments. As a result, work redundancy has been reduced and cycle times improved for delivery on key projects.
  • Project checkpoints. Project checkpoints are designed early in planning process to encourage teams to collaborate outside of the division with other departments or functions. Previously, project teams encountered resistance to their ideas and recommendations far too late in the project cycle to address them. Now, teams surface potential obstacles early, so that needed coalitions of support can be established.
  • Leadership communication. Adam’s bi-monthly leadership meetings were restructured when the survey revealed that his direct reports knew little about the projects or key challenges each member of the team was tasked with handling. Rather than conducting meetings as a one-way data sharing exercise where Adam communicates board and market related news, the team now discusses both the implications of the news on the division and its key projects, as well as individual progress with specific initiatives. Adam’s direct reports take turns facilitating the meetings and spotlighting their specific areas of responsibility. The meeting structure change has enhanced appreciation and understanding for the contributions of everyone on the leadership team, and improved the flow of information necessary for effective decision making.
  • Rewarding input as well as outcomes. The team is now focusing on ways to shift the cultural perspectives on risk-taking and mistakes. To support this, the division’s performance appraisal process is being revamped to better balance rewards to employees who directly contribute to favorable outcomes, with rewards for individual contributions to input, including those who offer ideas that challenge the status quo.

Adam’s work is still far from finished. He and his team recognize that refining decision-making is a dynamic process that needs constant reevaluation as new issues and challenges emerge. But, he’s invested in the process for the long haul.

“I need every bright mind that walks through our door,” he reflected. “And we need to create a culture here that unleashes their creativity, or this company won’t be relevant 10 years from now.”

A sobering thought for every leader.