Decide how to decide (HBR)
This article is the translation of the chronicle published on HBR France: https://www.hbrfrance.fr/chroniques-experts/2019/09/27862-decider-comment-decider/
There isn’t a right or a wrong way to make a decision, only a decision process of (way of deciding) whether or not it is appropriate, for a given situation at a given time T.
“I am proud to make as few decisions as possible in a quarter. Sometimes I can go an entire term without making a single decision,” said Reed Hastings, Netflix’s CEO since 1998, at an EFILE conference in Vancouver.A funny way of conducting the decision-making process in companies, a priori. However, this attitude and this way of making (or rather not making) decisions has a name: “avoidant decision making”, which we could translate to “avoidance strategy”. Such a decision-making process may seem irresponsible, absurd even, but it is in fact based on clear principles, calculated ambitions and has not failed to prove its worth. In terms of employee satisfaction, Netflix regularly leads the world in technology. Empowerment of actors, freedom and well-being of employees… All these aspirations guide Reed Hastings in his way of managing and conceiving his role as a decision-maker. The result is a corporate culture that is radically different from what can be done elsewhere.
Without a decision, nothing is possible
In this respect, the most common misconception is indeed the following: the role of a manager is to make the best decision, and that of the employees is to ensure that it is applied. An almost grotesque caricature of governance. This would mean forgetting the complexity and plurality of the different decision-making methods available to a group or a team, as reflected in Reed Hastings’ management policy.
We may not like to make decisions, we may not like the way they are made, but making decisions remains fundamental and inevitable in a company as in any organization. Without a decision, nothing is possible. Therefore, deciding how to decide becomes a crucial issue, if not the one and only issue. The corporate culture will then be one of the many reflections. Here are some different decision-making processes that you might try to apply or experiment within your team.
How to decide?
1. Autocratic decision-making. Deciding alone, without asking anyone for their opinion. This is the cliché of the almighty leader. This is obviously a very fast process, which can be very effective. But since no one can reasonably claim to be omniscient, the risk of missing decisive information is real. In addition, deciding alone can ultimately threaten the involvement and well-being of other members of the group or team.
2. Decision-making by delegation. This involves delegating a particular decision to one of the group members. Delegating saves time and allows you to focus on the really essential decisions. Moreover, the delegate (person who is chosen to decide) usually gains in motivation. But delegating can also be time-consuming, as things will never be done exactly as planned.
3. Consultative decision-making. Without letting go of the final decision, the decision-maker chooses to ask a number of people to participate in the development of the final decision. A technique that allows you to gather as many insights as possible before confirming your choice, and that, can also have a positive influence on those whose opinions are being considered. Be careful, those who remain on the sideline may feel excluded and, in the long term, the lack of transparency may harm the company’s culture and the spirit of the group.
4. Democratic decision-making. Decision-making power goes to the majority through a voting system, like the pioneers of ancient Greece! Considered transparent and fair, the process evokes a certain respect among the teams (see also the column: “Why companies have to learn from associations”). But democracy in a group ultimately encounters the same limits as in a society: vulnerability to internal lobbying, risk of disdain or oblivion of the minority, lack of involvement of the “losers”, etc.
5. Decision-making by consensus. It is one of the longest and most laborious decision-making processes, but when it comes to horizontality, it is difficult to compete. Everyone in the group must participate in bringing out the decision and gradually shaping it until a consensus is reached, satisfying for everyone (also read the interview with Lars Rebien Sørensen, former CEO of Novo Nordisk: “I have a Scandinavian leadership style, focused on consensus building”). The principle is to include all perspectives, all needs, and then to get all permissions. The process is certainly laborious, but it allows stakeholders to be as involved as possible. This decision-making process has already been emulated, particularly among trade unions, which have long opted for this collegial process.
6. Decision-making by consent. Consent generally refers to the absence of major objections. But, unlike consensus, the consent method does not allow stakeholders to backtrack on the decision in question indefinitely, the idea being to obtain the group’s rapid agreement on a decision that seems, at a minimum, sufficiently good to everyone. Here, the process is becoming faster, where it is losing in terms of collaboration and equality. The result is a real balance in the distribution of power within the group, but also a strengthened involvement of stakeholders. It is for these particular reasons that, this way of deciding together has seduced the sociocratic movement, and irrigates the texts of one of its great thinkers, Gerard Endenburg.
However, these last three forms of governance, which are more shared, horizontal and inclusive, are not always obvious to be put in place. This is what Mathieu Castaings, founder of Finacoop, an expert structure for the SSE, realized. When it came to growing his team from 8 to 15 employees, collective decision-making proved much more complicated. This is particularly due to certain individual reticences (feeling of imposed collaboration, loss of reference points in decision-making, need — often very entrenched — to have someone above you…).
7. Stochastic decision-making. Why not imagine playing this or that decision by dice or tossing a coin? This method, which is based on chance, is certainly not the most widely used, but can also be interesting. Fast and simple, it can, for example, be used in decisions where all the possible consequences are clearly understood and appear equivalent to each other. If there are no serious criteria for making a decision, why not leave it to chance? Its playful aspect is certainly the main strength behind this decision-making method.
In fact, this list could be endless. Everyone is free to innovate. This is what Scop Semawe did in Grenoble, whose activity focuses on online visibility and management of e-reputation, with “the trio decision”. Starting from the observation that it could be too slow to take decisions in a totally collegial manner, the company devised a system based on a trio, one of whose members is systematically from outside the concerned project. The result is a decision-making that remains shared and inclusive, but which gains in speed.
Whatever the chosen decision-making method is, the key is to remain flexible and retain a taste for experimentation. Indeed, all can only be applied optimally and effectively in certain given situations. So why not adapt the process to the context of a part of the company and de facto, accept its hybrid dimension in organizations with a significant size? Choosing is giving up, they say. Why not betting that choosing could also be an experiment?
By Luc Bretones, co-organizer of the NextGen Enterprise Summit “The NextGen Enterprise Summit” on March 26th and 27th under the high patronage of Bruno Le Maire at the Pierre Mendès France Conference Centre of the Ministry of Economy and Finance, with Holaspirit, Maif, Manpower and OCTO Technology.
Apply for the “The NextGen Enterprise Awards” for managerial innovation trophies organized with ESSEC.
