If organizations are decision factories, how do you keep the production line running smoothly?
Many organizations are finding that decisions are getting stuck more often and for longer. Or decisions are being “re-litigated” as new information surfaces or new people want to have their say. Here are three of the top reasons decisions get stuck and what you can do about it.
Flattened hierarchies are great for visibility. Executives have a better understanding of what’s happening on the front lines and people who are customer-facing have a better understanding of the goals of the company. But an underappreciated side effect of a flat structure is that this same visibility can cause decisions to get stuck.
The effect is counterintuitive and is a result of executives having more direct knowledge of analysis and action further down the structure. People further down the hierarchy learn that leaders are more likely to react to partially formed ideas or early experimental results which may cause them to swoop in and overturn a decision. People can get half-hearted about choices or create too many options. With too many choices coupled with a diluted commitment to one path forward, decisions stall.
What you can do: Have the people in the middle dance
The answer isn't to have the people in the middle be roadblocks or gatekeepers. It isn’t to add more layers of authority or hide information or make discovery more difficult. That would be a return to the bad old days of hierarchy.
Instead, you want the people in the middle to dance: to understand their primary role is to coordinate, collaborate, and synchronize across the organization. When those in the middle spend more time communicating and coordinating—dancing—with each other, they are able to resolve competing objectives, tensions, paradoxes, and tradeoffs before an executive acts by overvaluing one side of the story.
Have people in the middle schedule regular one-on-one meetings to discuss what’s on each other’s minds. Connect people whose roles might give rise to natural conflicts, for example, a director in the technology organization with their peer in new product development.
Decisions are like traffic jams—an accident on one side of the highway causes a slowdown on the other as folks slow down to rubberneck. In addition, when decisions are made at variable speeds, all decisions slow down and decision processes can “rubber band” up and down the process, just like in a traffic jam.
The key to maintaining decision productivity is ensuring that the speed of decisions syncs up with interconnected decisions. Of course, this gets very complex when decisions rely on having many diverse views and perspectives on multiple connected issues.
What you can do: Make decisions as modular as Lego
You might think of Lego as play. But Lego is also about the power of modularity—pulling things apart—as it is about putting things together.
Just as we need to break up problems to solve them, we sometimes need to break up decisions. Breaking up a decision is both an art and a science. Being successful requires first considering what error you’d prefer: failing to coordinate and making a suboptimal decision as a result or failing to decide because you can’t cohere around an action.
If you need to make decisions quickly, it’s usually better to break decisions apart into smaller, more autonomous decisions. Design incentives so that people can rely on everyone having clarity on the organizational goals and unambiguous information. Incentivize high-quality decision making in small teams—both the quality of the decision method and the quality of the decision makers.
This is how agile development works—a large project progresses iteratively and in a modular way where users provide feedback on components. This feedback is essentially an outsourced decision.
If your business context is complex and interdependent and you're not entirely sure of the desired outcome, choose the latter. Forget trying to eliminate errors in component parts or solving for single optimum outcomes. Focus on designing mechanisms that average and aggregate errors in the collective output. Your decision making should focus on synthesis more than summarization or analysis. Make this step conscious and deliberate. For example, schedule synthesis meetings where people resolve clashing causal forces in decisions. Set a timer 15 minutes before the end of the meeting so that a table consensus can be reached before the end.
Another tactic is to strive to make high-stakes or long-lived decisions as reversible as possible. Irreversible decisions make people anxious: design for reversibility as much as possible.
It seems ironic that data makes decisions harder given that the promise of analytics was to make decision making easier, more efficient, and more accurate. But this promise came with a hidden (and flawed) assumption—analytics would reduce uncertainty and human fallibility.
Analytics has not reduced uncertainty nor fallibility of decisions. Instead, often we perceive the world to be more uncertain than ever and decision makers can feel more anxious about the consequences of poor decisions.
Some of this is attributable to information overload. Most decision making processes in organizations have not been designed to handle the perceived increase in uncertainty that too much information delivers. We are left with the feeling that we can always know more. This makes it hard to make a decision.
Making this worse is what we call “dashboard loss aversion.” Loss aversion is a psychological phenomenon where individuals strongly prefer avoiding losses to acquiring equivalent gains. This means that people tend to place a higher value on avoiding a loss than on achieving an equivalent gain.
No one wants to get rid of a dashboard they don’t look at anymore because what if there’s something there that could be important in the future? Which is why we have more dashboards and metrics than we can possibly act on—we don’t want to prune our information sources.
But as the saying goes, if you pay attention to everything, you effectively pay attention to nothing. Constant bloat of key information sources is a perennial issue and one that is overlooked and undervalued in decision making.
What you can do: Treat dashboards and metrics like seedlings in a forest
Someone tending a forest must be constantly attuned to new seedlings that need cover to grow and require nurturing. But they must also be constantly vigilant to too much growth or unhealthy growth. They need to both prune and plant. Periodically a controlled burn is required.
Think of dashboards and metrics as a forest you want to hike in. Design trails and offer places to rest, to camp, and to take in the view. Don’t let the seedlings be shaded so much they won’t grow but prevent them from overcrowding. Rigorously deal with weeds. Do a controlled burn from time to time.
Use dimensional changes to help you decide what to prune. For example, ask what would happen if a metric doubled, halved, or increased by a factor of ten, or vice versa. Do you care?
Decisions are products of organizations. They reside inside a complex and interconnected web of people and systems. Getting decisions unstuck requires thinking about the system of decision making as well as the quality of decision making itself.
You can learn more about decision making by subscribing to our newsletter our checking out our book, Make Better Decisions.