How does your organization decide how to decide? Are decision making authorities (i.e. decision rights) clear, and are people truly aware of the impact of their daily decisions?
Studying decision making is the full time occupation of many very intelligent people, and there is a wealth of information available on what leads to, and what detracts from, making good decisions. Perhaps you have adopted some of the latest processes for decision making within your own organization.
According to McKinsey, however, in their recent article entitled Untangling Your Organization’s Decision Making, there are a number of factors in the current business environment that work against effective decision making. Organizations are becoming more complex, and dependence on email communication has risen exponentially – just two of the factors that lead many organizations to find their decision-making authorities are not clearly defined.
The recommendation coming from this article is quite simple and straightforward, yet very valuable. The authors advocate categorizing the types of decisions required into four buckets and then tailoring the approaches accordingly. The four buckets neatly form an ABCD framework:
- Ad hoc decisions – infrequent, low-stake
- Big-bet decisions – infrequent, high-risk
- Cross-cutting decisions – frequent, high-risk
- Delegated decisions – frequent, low-risk
You will have to decide for yourself, of course, but I think the discussion, examples and tips presented in this article are well worth considering.