Chapter 14: Eighty-five Desks — On How to Make Decisions
Ever notice how a crisis begets opportunity? That’s just what happened with SparkLight Digital.
When the system outage hit, everything needed doing at once. Product and Engineering had to shift all resources to hardening infrastructure security immediately. Customer Success had to develop a comprehensive customer reassurance plan. Marketing had to devise a campaign to address the negative brand impact. Sales had to shift its attention from chasing new customers to recovering lost ones. Finance had to redo projections and lead the cost-cutting initiative. In HR, three hard weeks of work processing the layoffs gave way to new concerns about the health of the company’s culture.
In the beginning, the team at the top took command and directed a mad scramble of actions. But once the initial frenzy of remediation steps had subsided, it soon became clear that substantive, across-the-board changes were needed. To depend just on top leadership to get everything done would strangle progress. Light work required many hands.
In a meeting with company management, you set forth the challenge. From this point forward, an empowered, team-based decision-making approach would drive change. Mid managers and individual contributors, not just VPs, would plan and implement significant change initiatives. Project teams would be initiated to redesign workflows, upgrade technology and implement metrics.
“Your responsibility remains to ensure day-to-day performance in the work groups you lead,” you said. “I call that working in the business. There is no change in our expectations there. But from this point forward, we will also look to you to be drivers of key change initiatives — projects that work on the business to make it more successful, scalable, efficient and secure. Let’s call this our ‘In/On Challenge.’”
The chartering began. Soon, you mustered and mobilized the Security Team (product and engineering), Customer Reassurance Team (product and customer success), Brand Team (marketing, sales, and customer success), and Welcome/Welcome Back Team (marketing and sales). Team leaders worked with their executive sponsors to finalize project scope. Each team delivered a defined project plan. With that done, team leaders assembled a cross-departmental team of managers and individual contributors, and work began.
It was messy. Some teams got stuck. Mid managers struggled to lead teams made up of people that didn’t report to them. The demands of daily work kept intervening; everyone had to figure out how to set boundaries and prioritize. But with the help of coaching from executive sponsors, somehow all four project teams found their cadence.
Throughout the ensuing two months, conference rooms were perpetually in use. Debates frequently spilled into the open work area, sparking frowns and rebukes from busy CSMs, SDRs, and engineers. Project leads and team members scrambled back and forth between project work and their day jobs. Data gathering and research took more time than anyone expected. Nonetheless, slowly but surely the plans came together.
On September 8, project teams presented their final proposals at an executive retreat. The agenda included two presentations in the morning and two in the afternoon, each two hours long. Every full project team presented. You were impressed to see that for three of the four presentations, the team leaders asked other team members to present parts of the final presentation. Some presenters were nervous, but all were well-prepared.
Each presentation covered the current state and exposed flaws in the plan. Data backed up findings. Speakers proposed new workflow designs, new tools and technologies, new metrics dashboards, and new skill development programs. Across the board, all four teams demonstrated work that was both substantive and actionable.
Exec team questions were tough and specific. Some recommendations were provocative, leading to challenges. For instance, the Customer Reassurance Team proposed to delegate CSMs the authority to waive up to two months’ fees without seeking management approval. This proposal generated a spirited exec team debate. But in the end, one by one, the exec team approved all recommendations from all four project teams. One word summed up the teams’ demeanor as they exited the room: swagger.
A company runs on decisions. As data streams in from the market and filters throughout the company, and as internal workflows yield issues and demands, direction setting takes place. Execution priorities must be determined. And the tasks associated with these priorities must be executed.
Decisions can be small and tactical, made by an individual contributor operating within a limited range of authority. Or they can be significant and strategic, with the future of the company on the line. Choosing how to make a decision is as important as the decision itself. How you decide affects not just decision quality, but also talent growth opportunities, leadership development, and cultural health.
In deciding how to decide, consider first principles. How do you think about authority? One must start there. All decision-making springs from the authority to decide.
Increasingly, CEOs recognize that involving a broad selection of employees in decision-making (i.e., empowerment) is critical to decision quality, healthy culture, and talent development for both managers and individual contributors in most circumstances. For some companies, such as Google, empowerment extends to a wide array of decisions — including who to hire, who to promote, how to recognize accomplishments, how to evaluate performance, and even how to compensate. Google actively seeks to limit managerial power, so as to elevate company-wide power.¹
Consider your biases. Is it your bias to give power away? Or to hoard it? Why?
As CEO, you must ponder these questions. Are your values aligned with company needs, or ego needs? Your attitude towards power will affect the decision framework you create for your company. Whenever a decision is required, a leader’s first instinct will often be to “just decide.” Don’t do that. The first decision to make is how you will decide. Can you push the decision down? To whom, and why? What degree of decision freedom should you delegate? What data will you require? How quickly must the decision be made? Who must be informed?
It is essential to determine the role data will play in decision-making. Do you trust opinion, or do you require data? On the one hand, data requirements in the decision-making process add a burden to decision makers and slow decisions down. On the other hand, data requirements force rigor and increase decision quality. Whenever feasible, it’s best to follow the adage, “In God We Trust — All Others Bring Data.”
Context is important. If you’re leading in wartime — when decisions are existential — you and the executive team will need to take command and own more decisions. But if you’re leading in peacetime, it’s best to push decisions down as far as you can. You will increase decision capacity, free managers and executives to look further into the future, accelerate the growth of talent, and enhance the health of your culture. An empowerment approach may initially increase decision error rate, but these are teachable moments. In time, empowerment wins.
Of course, the nature of the decision itself impacts the decision approach. Can it can be “roughly right” (i.e., a beta product release or the first iteration of new messaging), or must it be exactly right (i.e., the response to a sexual harassment complaint, or the summarization of the year’s financial results, or an upgrade to platform security)? What degree of impact will the decision have on the company’s future? These questions will inform the degree of power you delegate, and to whom.
Many decision types are predictable and repeatable. Too often, executives treat these decisions as if each was unique. They reinvent a brand new decision approach every time. This makes no sense at all. Figure out how to address predictable decisions up front. Develop a framework and teach everyone to follow it. Such decisions include:
- How to hire
- How to compensate
- How to promote
- How to fire
- How to recognize accomplishments
- How to evaluate performance
- How individual contributors work with customers
- How to optimize workflows
- How to identify new product needs
- How to launch new products
- How to make product roadmap decisions
- How to maintain culture
- How to set strategy
- How to set operational plans
But, other decisions are less predictable than those listed above. For example, when you have to downsize, or pivot, or address a data breach, or deal with a senior executive’s significant ethical failure, you will need to figure it out on the fly. Although even here, it makes the best sense to “decide how to decide” by starting with clear principles such as “push power down” and “bring data.”
You can choose from different degrees of delegation:
- Make the decision yourself, with no input
- Make the decision yourself, but first, seek input from one or more people
- Search for consensus from the group, but clarify that you must buy in, too
- Delegate the decision to a project team with an assigned leader, who must develop a proposal to be submitted for your approval
- Delegate the decision to the group, which must reach consensus and inform you — or if no consensus, you will decide
- Delegate the decision to a group or individual, and ask to be informed if and when they make a decision
- Delegate the decision to a group or individual, with no expectation of being informed
No matter what delegation choice you make, you never relinquish accountability. Accountability is shared. But in the act of delegation, you shift the locus of responsibility, which increases your capacity to drive change, builds leadership competency, and frees yourself for higher-value tasks.
The $10M inside round closed a couple of months later. It was a “down round,” with Kapoor Capital leading, and Smash and Imagination Capital following. You immediately implemented compensation adjustments to reverse the forced pay cuts, and to bring all positions in the company up to market rates. You then published a company blog on compensation philosophy, including the pay ranges for all positions in the company — including your own. After much deliberation, you decided not to make public equity-based compensation.
At the Culture Committee’s recommendation, you decided to initiate a monthly survey of all employees. The study identified employee satisfaction levels to discover breakdowns in adherence to company values and to highlight the most challenged work groups. When the results came in, they caught you off guard. The lowest scores in the survey were in the areas of compensation (not surprising) and communication (surprising). Universally, employees wished for better company-wide and cross-departmental communication of strategies and plans. Furthermore, despite your empowerment efforts, most employees felt disconnected from the decisions that affect them. They wanted to understand the reasons for change and to have the opportunity to participate earlier in change efforts. More, they favored the freedom to initiate changes themselves when opportunities for improvement arise.
As you prepare to present the findings from your first employee survey at the next All Hands Meeting, you feel chastened. Given all the progress the project teams made, the exciting new spike in sales, the recent dramatic improvement in customer retention, and especially given the $10M funding event you closed, you expected the feedback to be more positive.
Nonetheless, you dutifully present the findings and discuss their implications. As you share the results, eighty-five people stand in the front lobby area, surrounding you in a half circle, most with arms crossed. There are nods, but no questions.
Finally, the meeting wraps up. You walk back to your office, feeling lonely.
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Next up Chapter 15: Ninety-five Desks — On Communications Architecture publishing on Tuesday, March 20th.
- Laszlo Bock, Work Rules!: Insights from Inside Google That Will Transform How You Live and Lead, (n.p.: Twelve, April 7, 2015).