Julie Hughes, J. R. Maxwell and Leigh Weiss* say inefficient decision making wastes time, money and productivity. As leaders respond to today’s paradigm shift, companies can pursue four actions to adopt and sustain high-velocity decision making.
In our pre-pandemic research, we discussed three characteristics that lead to better, faster decision making: high-quality debate, well-understood processes and a culture of empowerment.
Our research also identified three facilitating actions: making decisions at the right level, aligning decisions with corporate strategy and committing to execution.
Then, during the pandemic, we saw organisations making decisions faster than ever.
As the world progresses into the next normal, companies must reconsider the basic tenets of the organisation to avoid complex and costly decision making.
As companies look to organise for the future, we have observed an additional four actions that complement our earlier research and can help sustain rapid decision making.
Focus on the game-changing decisions
Prioritise decisions and debate the ones that matter most by asking what decisions can best help your organisation create value and serve its purpose.
Senior executives can be judicious with their decision-making time by segmenting decisions into four categories: debate and decide, approve, provide guardrails, and delegate; the latter two are critical to facilitating rapid decision making across the organisation.
Executives should also be heavily involved in the small number of “game changers”—decisions that are most critical to deliver on the organisation’s strategy—that make up debate.
Convene necessary meetings only, declare war on lengthy reports
Most regularly scheduled meetings keep employees busy but not productive, contributing to poor employee morale.
People typically spend too long writing lengthy reports for meetings, creating data overload and making it difficult to make decisions.
Organisations should rethink current meeting schedules, length and preparation practices.
Meetings that can be replaced with written updates should be eliminated.
For those meetings that remain, attendees should be given short, focused, well-prepared pre-reads can aid decision making.
Amazon, for instance, encourages streamlined reporting and facilitates productive decision making with a standard six-page memo that tees up the critical facts.
Companies are also moving faster by speeding up the cadence of some decisions.
For example, many organisations allocate resources quarterly instead of annually, and some do so even more frequently.
Although this means more meetings (though not necessarily more total meeting time), companies can move more quickly because there is less guesswork.
Clarify the roles of decision makers and other voices
The essence of decision making requires a clear understanding of who has a vote (decides) versus who has a voice (provides input).
Lack of role clarity is a frequent barrier to rapid decision making.
Therefore, organisations should designate the accountable decision makers and those who are involved, consulted and informed.
Push decision-making authority to the ‘edge’—and tolerate mistakes
Agile organisations navigated the initial impact of the pandemic better than most.
One reason is that they delegate decision making to frontline employees and to other critical roles where value and risk are concentrated.
Yet, delegating does not mean leaving people on their own; rather, it is about coaching (not micromanaging) decision makers to make successful decisions, providing guardrails and empowering them to make final decisions.
Making decisions faster inevitably means mistakes will happen.
However, organisations should give employees room to make those mistakes—as long as they don’t threaten the business.
We’ve seen organisations take steps to build risk mitigation into their decision processes.
This lets them continue to move with speed: moving forward with implementation and quick test-and-learn cycles that allow for nimble adjustments and open doors to opportunities.
As the pandemic continues, organisations should embrace the mindset that progress—and learning as you go—is better than perfection.
The risk of standing still is greater than the risk of making bold moves.
*Julie Hughes, J. R. Maxwell and Leigh Weiss are contributors at McKinsey.
This article first appeared at mckinsey.com
