Empower Your People: Decision Making
Decision-making is at the core of organisational effectiveness.
“Improving any of the elements of decision-making - quality, speed, implementation - has a direct correlation with financial performance of organisations…and getting better at all of them has a multiplier effect.” - Decision Effectiveness Score, Bain and Company.
Which means it makes financial sense for you to read this article.
As the workplace navigates its new normal of hybrid working, it can feel disjointed and disempowering for teams heading back into the grind; but as specialist consultant Andrea Darabos put it, “there is an opportunity to unleash collaboration and the intrinsic motivation to make decisions better”.
In a recent webinar, hosted by Lithe Transformation, Andrea talked about how there is significant scope for organisations to learn and experiment with decision-making.
Referencing Daniel Pink’s book “Drive”, a summary of comprehensive studies that look at what qualities motivate us as humans to perform and contribute, not just in our work but also to the world around us, Andrea discussed the importance of Autonomy, Mastery and Purpose and why now more than ever, teams should demand better decision-making.
But how does decision-making and empowering people tie in together?
Most organisations are set up as centralised governance, where decisions are based on levels of hierarchy rather than collective expertise. Any high risk decisions are escalated up and the language often used by teams is always looking for permission. This is hardly empowering in itself!
This also means that many decisions when centralised like this, can become inherently biased due to the lack of diversity in boardrooms and management teams as well as causing unnecessary delays in the process.
Centralising decision-making in this way can be detrimental to companies, not just because of disempowerment but also because what really matters at the moment for organisations is their pace of innovation. The organisations that are faster at decision-making, are able to compete better in the marketplace.
What are the alternatives?
Distributed Intelligence
According to Andrea, if we look to nature for inspiration, we are all wired to work in a manner of collective intelligence; we naturally adapt our behaviour to our environment and look to tap into our natural wisdom which can support us in becoming more ‘self-directed’. When working in agile and adaptive environments like this, the language also changes. It is less about seeking permission and more about asking for any objections to the venture at hand. This encourages curiosity and engagement and allows for more experimentation as well.
It is simply not possible for one person to take high-risk decisions; it is not possible to know everything and do everything to deliver an end-to-end service, which is why looking for this shared collaboration can help us tap into collective skills.
Authority to information
David Marquet, a former navy captain and commander of a nuclear submarine, is a renowned keynote speaker on leadership. Safe to say, he understands the pressures of effective decision-making in a high-pressured environment.
“Don’t move information to authority, move authority to information” - David Marquet
In hierarchical organisations, decisions are made by reporting information back up the reporting chain of command. By suggesting this approach, David Marquet proposes that decision-making should become the remit of those who are on the frontline. These are the people who look to create value within our organisations, which should be everyone but particularly those who face customers on a regular basis and feedback from the customer root.
In sociocracy, which is one of the foundational pillars on how to decentralise decision-making, there is some detailed guidance on freeing individuals and teams up to create value as autonomously as possible, deliver value fast and avoid unnecessary dependencies.
These principles not only build autonomy, but also support in understanding the organisation’s infrastructure and architecture:
How does your organisation create value?
Who are your customers?
What are your Products and Services (service domains, value streams)?
How can you deliver value through small semi-autonomous teams?
In her talk, Andrea gave the example of Buurtzorg, a nurse-led healthcare organisation in The Netherlands. Buurtzorg started out with four people and one nursing team.
It has managed to scale as an organisation by creating 900 self-managing semi-autonomous teams. Each team is based in a district in the Netherlands and serves the local community providing health care and wellbeing services, putting the patient at the centre of their service.
There are only 50 people in HQ, out of which 15 colleagues are coaches. These coaches can be called by the teams if they have conflicts or some development needs that they cannot resolve themselves.
Simplifying bureaucracy supports organisations working towards the end goal: of serving customers rather than creating complicated processes around internal reporting.
Structuring teams
Andrea also spoke about the importance of structuring growing and autonomous teams.
A lot of companies invest in internal decision-making systems to empower teams to have better data about customers and market opportunities. However, when it comes to autonomy of external facing teams, this can sometimes miss the mark in supporting these teams to make frontline decisions.
She encourages organisations to “grow like a fractal” to keep the ease of decision making.
Taking Buurtzorg’s example, when the board reaches more than 5 people on a team, they split the team. These are then split into those who are customer facing and those that support internally, such as IT and infrastructure teams.
[This work is by Bernhard Bockelbrink, James Priest and Liliana David is licensed under the Creative Commons Attribution-ShareAlike 4.0 International License.]
Types of decision making
Not all decisions can be localised to teams. Some decisions are high risk and need the input of senior team members.
One-way-door decisions:
These are decisions that have a big impact and are hard to reverse once the decision is made. These decisions are those that need to be recognised, and in order to make them, need diversity, wisdom of crowds, multiple perspectives and actively try to remove our bias. These decisions could have a big impact and could be irreversible on the microscale.
The key is to take time when making these decisions and consider all the options when making these high-impact decisions, such as firing someone, building a new office location, etc. as they aren’t reversible. However, Andrea suggests that when looking at these decisions, it is possible to reduce these down into small bets.
Two-way-door decisions:
These decisions are those that are low stake and easy to reverse.
If you are a global organisation, this might be launching a product with a new feature to only one city or location. This can also be used to customise what percentage of users get access to this new product.
By allowing these decisions to be two-way-door decisions, an organisation can manage the risk and make decision making easier for employees.
It’s all about creating a culture and practice where decisions are small, reversible and creating an infrastructure to do so.
If we take Amazon as an example, it runs a lot of A/B tests, such as wording, positioning and even colours of buttons. This is how they optimise their service.
“Speed matters in business. Many decisions and actions are reversible and do not need extensive study. We value calculated risk taking.
We think those two-way-door decisions are reversible and we want to encourage employees to make them.
Why would we need anything more than the lightest weight approval process for those two way doors?” - Jeff Bezos
These are micro decisions, that are particularly easy to implement in the digital sector especially easy to do in the digital sector. So, making decisions small is great when organisations know for whom and how to then use these decisions to deliver value.
The pre-approval process
UK-based IT company, The Happy Company, uses ‘the pre approval process’, which is effectively advocating for its people that you can approve someone's solution or idea before they come up with it:
“What makes people unhappy is being micro-managed and going through layers of approval. Great managers get out of the way and enable their staff to implement their own solutions.
So how do you allow this to happen in your workplace?
With pre-approval, you approve someone’s solution or an idea before they come up with it. You need to agree the guidelines, the budget, who needs to be consulted (if anyone is going to be affected by it), but you ‘pre-approve’ the implementation – whatever idea they come up with, is what will happen.”
This can act like a safety net; organisations can set some boundary agreements in place by having guidelines, budgets, budgetary limits and what needs to be converted to have a pre-approval process that makes it safe for people to make their own decisions and is also safe for authorisation.
For those of us who coach teams or management in Agility, need to focus on the boundary agreements between the rest of the organisation and the semi autonomous teams, or as Andrea likes to call them, Agile teams as they help their organisation deliver value fast and early incrementally, and have the organisation adapt accordingly.
The semi autonomous team has very clear boundaries. For example, they are given a budget per quarter that they can spend on no-questions-asked capex and opex budget. This does present the question of what is expected in return.
The team's purpose is to deliver releasable and quality products or services to customers ideally every day in line with organisation’s goals, missions, values and standards.These teams also need to advocate and live transparently; they need to measure their performance and also publish this performance on customer market feedback, sustainability, and so on.
When these semi-autonomous teams are set up, they may be allocated the pattern of roles: one could be the product owner role and the product owner role delegates the decision-making authority on what the team should build within the budget. They are also responsible for maximising the customer and the business value delivered by the team, so every decision they make needs to be balanced to maximise value. The scrum master role, also commonly found in the HR team, is a facilitator and responsible for improving the performance of the team, the collaboration but also the well-being of the team and often serves as a coach for the team and stakeholders. The HR team is responsible for self organising in making all the other decisions on the day to day tasks, the collaboration between the team and stakeholders and also the customer interactions, how they deliver their best work, while staying motivated while staying empowered and maximising speed and quality of value to customers.
This is particularly a genius move, if you do have boundary agreements already documented for your organisation’s themes and regularly revised with your managers or other teams around the structure. If not, this is a big opportunity to implement self-organisation which is agreed within these boundaries.
It is extremely beneficial if organisations can create an environment where teams can self-manage their actions and decisions based on clear values and agreed principles. These can go from those that are challenging, going from the very detailed agreements to a more generous and trusting one with more freedom in the framework.
Techniques to clarify delegation
In her talk, Andrea shared her techniques to clarify delegation and decision-making on a role-by-role basis, for example, in a manager vs semi-autonomous basis.
Levels of delegation
When decision making power is distributed, the decision is often shifted from one person here to a manager telling the team for the rest of the organisation what to do. But in relation to the team, the manager has the choice on how to make decisions, based on their level of delegation.
Level 1: They may tell the team about their decision
Level 2: They might try to sell the idea to the team
Level 3: They consult the team but ultimately decide themselves
Level 4: They may agree collectively with the team, whichever agreement process is used
Level 5: They may advise the team but let the team make decisions
Level 6: They enquire after the team has made the decision
Level 7: They fully delegate the decision
This is dependent on the manager’s time, competencies, how they assess risks and situations, as well as what type of decisions the team needs to make.
The type of decisions will then also determine the level of empowerment.
Mapping out key decisions
When using these techniques, it is important to remember that the main purpose of an organisation is to create value – to our communities and for our customers. Everything comes down to value delivery.
Andrea’s approach is to work closely with your team to map out the critical decisions for fast value delivery and assign the levels above. These can be done by looking at initiatives such as:
Period (Yearly, Quarterly) Budget Approval
Funding Release/Spend Approval
New Product/New Feature Development Decisions
Team Membership/Hiring/Firing Decisions
Team Tooling Decisions
Team Learning And Self-Development
Architectural Decisions
Test Verification Decisions
Go-To-Market Release Decisions, Approvals
Team decisions
When making decisions where team agreement is required, it is best to be smart about them. The agreement of a team is necessary in some situations but can also be very tricky.
As a manager, here are some agreement options you can look at:
Majority voting: good for small-risk and simple decisions
Consensus: where unanimity is required, but note that it can lead to a deadlock and endless discussions
Advice process: where managers can decide as long as they seeks and consider advice from experts on the topic
Consent process: decisions that are safe enough to try
Overall, Andrea’s advice and recommendations are to look at decision-making as a dialogue, a discussion, where teams are involved at various levels to feel empowered where they can feedback their thoughts and opinions to avoid bias and encourage diversity, even if the eventual decision is from a higher manager.
Working asynchronously, can be a beneficial way for teams to work through and digest information; for them to sit on their thoughts and feedback in a positive and empowered way, rather than being forced to commit in the moment.
The future of decision-making and organisational operations is bright. We have all the tools we need to work in an agile, adaptive manner and what’s more, we can empower our teams to change the way we run our organisations for the better.
About Andrea Darabos
Andrea is a frequent conference speaker and (co-)author of several books and articles including "Agile People: Your Call to Action for The Future of Work", "Ethics in Agile Coaching (AgileAlliance)" and "De-Risk your Products with Experiments (InfoQ)".
Andrea Darabos advises senior management teams and organisational leaders in using agile and New work leadership approaches to help achieve business adaptability, innovation capacity and continuous product to market delivery. Andrea and her team deliver organisational results through a combination of facilitated learning programmes and targeted consulting/advisory.