Introduction
This week’s blog is
about how companies can make better decisions and the Harvard Business Review
video “How Companies Can
Make Better Decisions”. In the
video, Marcia Blenko, leader of Bain & Company’s Global Organization
Practice, outlines several key components to making better decisions. Correlations
to support / counter Marcia’s assertions are provided in this blog. Hopefully
your own perspective on how to make better decisions will broaden and have more
depth when you reflect on what this blog offered. A key component of this blog
will be zooming in and zooming out on the issues that surround decision making.
If you’re not familiar with these terms, spend a few minutes watching Rosabeth Kanter, Zooming:
How Effective Leaders Adjust Their Focus.
Why Zoom-in to Decision-making?
According to Marcia, she
believes that decision-making and executing decisions is a key driver of better
financial results and that starting with decisions as the basic unit of an
organization and not the boxes and lines of an org chart is a good way to begin
to think about how an organization functions and how they achieve the better
financial results. (Blenko, 2010). The concept that decisions should be used as
the basic unit of an organization may seem a reach, but think of it as Marcia ‘zooming
in’ to what keeps an organization vibrant, relevant, and perhaps more importantly
profitable. Let’s zoom-in even farther for a moment and consider what components
have a direct impact on decision-making.
Employee Engagement
Marcia identifies that
there is a direct correlation between decision effectiveness and “employee
engagement”. (Blenko, 2010). Involving
employees in decision-making whether by implementing teams or simply by
soliciting their input is supported by many current thought leaders. “Many
companies have attributed their improvements in performance directly to the institution
of teams in the workplace” (Whetten & Cameron, 2011, p. 495). Yukl (2013)
says this about teams “Organizations increasingly rely on teams to improve quality,
efficiency, and adaptive change…The potential advantages of teams include more
employee satisfaction and commitment, better quality of products and services,
and greater efficiency and productivity.” (p. 272). Yukl (2013) also asserts
this about decision acceptance “…participation increases decision acceptance if
it is not already high, and the more influence subordinates have in making a
decision, the more they will be motivated to implement it successfully.” (p.
112).
Clearly teamwork and
employee engagement are important factors in decision-making, but they are not guarantees
for decision-making success. Some of the drawbacks to engaging employees in decision-making
are team decisions generally take more time, dysfunctional conflicts could
derail a consensus and the team may not possess the relevant skills or know how
to get the right information to make a good decision (Whetten & Cameron,
2011, fig. 8.2). So while deciding if employee engagement is the right path to
take in decision making, there are more obstacles to watch out for.
Obstacles to Making
Decisions
Maria explains some of
the obstacles she believes are significant. The 1st obstacle may not
be obvious to most people “The last decade or so companies have become more
complex...people aren’t clear who makes or who should be involved in the decision”.
If you been exposed to the science of complexity and complexities effects on decision-making
then this is not new news. Hoch & Kunreuther (2001) bring the point home of
how complexity is affecting decision-making in today’s businesses “Compressed
decision time and complexity are swamping the orderly flow of information and
authority, characteristic of traditional decision making. Managers are turning
to new approaches, emphasizing options thinking and managerial flexibility.”
(p. 116).
Additionally Maria
identifies challenges with getting the right information, leadership behaviors
getting in the way, and the right talent not being involved as other
contributing obstacles to making decisions. In each of these cases, the power
of a good team either eliminates or negates all of these obstacles. There is
one obstacle in particular that probably should have made her list and that the
emotion of making a decision that involves a protected value. A protected value
is one that, as the name would suggest, is non-negotiable and if part of the decision
making process that could stall or cause a rash decision to be made. Leaders
with a lot of protected values can be difficult to work with in the
decision-making process and we all probably could name one or more such leaders
that we have had to deal with in our personal and professional lives.
Four Elements of
Good Decisions
Zooming back out a bit
to view decision effectiveness in a larger frame, Marcia asserts there are four
elements to defining decision effectiveness: quality, speed, yield and effort. These
four elements appear to categorize decision effectiveness sufficiently. There
is perhaps one element not mentioned worth discussion and that is, is the decision
sustainable into the future and for how long? Whether or not the decision is
sustainable into the future is often very dependent on employee acceptance.
Summary
How can we take this
information and make better decision going forward? Probably first and foremost
decide if the decision warrants employee involvement. Ask yourself, how much
time do I have to make the decision, do I have enough information, how
important is employee buy-in and is this a decision that will need to be viable
in the future? Generally speaking, when employees are engaged and involved in decision-making
processes, decisions are better, implementation is easier, and the decision will
be more sustainable into the future. The downside is that it can slow the decision-making
process down and increase the effort needed to make it. Spending some time to
zoom-in and zoom-out on these issues will help you make the first decision a
good one.
References:
Blenko,
M. (2010). How companies can make better decisions.
[Video file]. Retrieved from https://www.youtube.com/watch?v=pbxpg6D4Hk8&feature=player_embedded
Hoch,
S. J., & Kunreuther, H. C. (2001). Wharton on making decisions. (1st
edition.). Hoboken, NJ: John Wiley & Sons Inc.
Kanter,
R. (2011). Zooming: How effective leaders
adjust their focus. [Video file]. Retrieved from
https://www.youtube.com/watch?v=saNj6B0Vasw&feature=youtu.be
Whetten,
D. & Cameron, K. (2011). Developing
management skills. Upper Saddle River, NJ: Prentice Hall.
