Approaches for Decision-making
Decision-making is often seen as a leadership role and delegated through a chain of authority. In this way, positional rank and its associated powers drive decision rights and how people are empowered through a delegation process. Unfortunately, this power-based approach to decision-making lacks the agility required today, so it becomes more important to create the conditions through which decisions are effectively made and implemented by those most knowledgeable (Marlow, 2023). Retaining decision-making power high in the organization has resulted in top executives spending an inordinate amount of time on decision-making that would be better done elsewhere in the organization (Duarte, 2022). Further, by not delegating what others could do, these executives are developing subordinates who lack the necessary skills for career development and nurtures an environment of learned helplessness that results in further escalation of issues for resolution. Instead, these executives should be focused on higher level strategic issues and be outward looking for threats and opportunities.
An earlier section addressed the steps necessary in problem-solving, decision-making, and decision implementation. When looking further into the actual decision process, there are several decision approaches that organizations can use, often in combination for different decisions depending on magnitude of the impact in resource requirements & anticipated benefit (Rau, 2023). These processes can also vary between those made by someone with sufficient decision authority or in a team or group setting. But, before getting into how teams can be involved in decision-making, it is necessary to start with the traditional decision-making approach found in hierarchical organizations.
Autocratic — a single person can decide using the formal authority that is delegated from above (ultimately from the owner or Board of Directors acting on behalf of the stockholders). While this positional power imbalance can mandate the decision using Level 1 Involvement of Telling people what to do, pragmatism defaults to Selling (Level 2) the decision to gain commitment, often supported with Testing and Consulting with others (Involvement Levels 3 & 4) prior to making the decision. This decision authority can also be used to override a decision made at a lower level with previously delegated authority. This threat of reversing the delegation of authority creates some fear in the decision-making process that may add an institutional imperative as a selection criterion by considering how superiors view a decision or even slowing an otherwise quick decision process by escalating the decision to a higher authority when sufficient authority is already available. There may also be some hesitation to using one’s authority for fear of making a poor decision that will be judged later in hindsight. To reduce this fear, many managers will employ a version of the Advice decision-making described below. By seeking out the advice of other peers and superiors prior to deciding, others in the organization are indirectly connected to the eventual decision thereby reducing risk for the decision-maker.
Unclear — even with a clear reporting hierarchy for the delegation of authority, there are many situations that lack precedence of earlier decisions. In these cases, the organization makes up the decision-making process as it opens the door to those with loud voices and favor trading providing the boundaries. Because the process is unclear, there will likely be differences of opinion as to how the decision was made that can then lead to poor implementation results later through lack of follow through. It can also encourage long meetings without a clear outcome for action since the process will be unclear. Eventually a decision may be made by default when someone takes a stand and moves forward by claiming the decision was made by lack of disagreement.
In the past, I did this for one decision that fell outside traditional decision rights but still needed a decision (any decision among several alternatives) to align the organization with a new regulatory requirement. I took a leap of faith by just making the decision myself from the options available and announced it. Because everyone knew a decision was required, they were happy to go along and not have to be part of the selection process. In this situation, while we may want everyone to agree, the choice really gave no one the option to disagree. Still, complaints are rare because there is no decision-making process to appeal to when wanting to disagree. Further, an unclear decision process has a high chance of poor implementation because the decision itself may be vague without accountability for action assigned.
On the other hand, this unclear decision-making process is a necessary step when forming a new team that has yet to decide on how they will make decisions going forward, assuming there is no organization protocol for team governance systems. The danger comes from tolerating unclear decision-making that can slow down the required decisions needed for organizational agility.
A variation of the unclear decision process is a Decision by lack of response. In this unstructured approach, people keep throwing out ideas until something resonates with others and a positive comment is made or the idea is extended through a brainstorming process. Objections to proposals are not voiced but instead, the idea is allowed to die through silence (Yip, 2017). Consensus is allowed to build informally, which may take a significant amount of time for complex issues or when involving many people. There is also a danger of Decision by self-authorization where someone assumes that silence without another option arising is an implicit authorization through lack of dissent. An example that combined a lack of response and self-authorization occurred in a retail chain where the marketing department proposed a significant rebranding program. The Board failed to respond in a meaningful way, leaving an unclear decision process. Using the idea that “it is better to ask for forgiveness than to ask for permission” the Marketing VP started a small market test that grew before anyone in the corporate planning group really became aware of the growing capital budget. This again is a danger (opportunity?) associated with an unclear decision-making process that requires putting the interests of the organization far above any appearance of personal interests.
Majority vote — has the appearance of being democratic but permits a sub-group having a majority of the total membership to dictate its view on a minority group. Having majority power for decisions can also establish a pattern of voting that keeps that majority in power thereby repressing a minority group. Such repressive behavior can also lead to vote trading for a favorable outcome on another decision. Nonetheless, a majority vote is a formal way to involve others in the decision-making process but does not guarantee having an effective voice. There is also a tendency to set up binary choices without working out complicated weighted voting processes. In using this approach, the focus is on quick group decisions that gain a majority of “votes” and not necessarily seeking the best available choice with consideration of all points of view. There is little tolerance for nuanced opinions that require in-depth discussion.
Consensus — everyone agrees (anyone has veto power!). On the surface this has the air of inclusivity, but only to the degree that people are encouraged to voice any dissent. And what is voiced may be someone’s first preference that adds time to sort through all the preferences and arguments on who is most “right” eventually getting to a smaller group of options that are acceptable but not preferred. Advocating for one’s preference can encourage one-way exchanges to convince others about what the better choice is, without encouraging the listening necessary to understand the differences between preferences. And in the conflict that may arise, quieter voices may be pushed aside with pressure for everyone to just get along. Those new to the organization or members of marginalized groups may be especially influenced to stay quiet thereby producing a false consensus. While providing the appearance of agreement, those marginalized are likely to feel excluded and hold some resentment that will be counterproductive later during implementation. Further, if everyone were fully free to express themselves, this decision-making process can take an inordinate amount of time necessary to address every concern even if minor and not material to the organization. Eventually, minor issues will be pushed to the side due to peer pressure and compromises made if only to end the conflict and get everyone back in alignment. This eventual outcome will have everyone’s agreement but not necessarily their enthusiasm and commitment. However, any remaining dissent can no longer be explicitly displayed since that would violate their agreement as part of the consensus. Continued conflict in extended debate and disappointment among those who have their ideas repeatedly sidelined can lead to frustration with this method of decision-making, to the point of withdrawing from active participation thereby losing any value their involvement may have.
Consent — this is a variation on consensus but instead of requiring agreement from everyone that leans toward preferences, consent requires everyone to “not disagree.” In this case, agreement is very different from not disagreeing since we move from preference to the wider group of options that are acceptable. It also shifts the debate from arguing for a preferred option to stating why you disagree with a specific option. This then allows others to understand points of disagreement that leads to improving the option pool or identifying areas for possible compromise. Using this approach to decision-making will still give voice to everyone but the focus is better directed on the core issues that are likely to be overlooked or cause problems later during implementation. This process also requires careful listening to understand someone’s objection in order to respond successfully in addressing the point of disagreement. The debate then shifts from “I’m right!” to “how can we fix this so we can both agree?”
This approach then searches for the space between preference and objection — a zone of tolerance where people can agree. Any remaining disagreements can also be softened with a “let’s try this for X months and see what happens.” This sets up a test with defined limits and a clear objective to test the validity of the remaining objective. Those championing the decision have the freedom to move forward but also know that they must provide the necessary data to support the decision, data that would not have previously been available without the tentative approval. This decision-making approach is also inclusive in giving everyone a voice while limiting that input to specific issues that can be debated separately from preferences. Quiet or shy voices will also be heard since it is the quality of their objective that counts, not the enthusiasm and loudness of how someone presents their preferred option over those with quieter voices. On the other hand, this approach to stating one’s objection does require rational thinking to clarify points of difference and the skill to structure a compelling argument. This may exclude people who are not structured and not clear themselves on why they dislike a proposal. Power distance in some national cultures across organization rank, gender, age, and other privileges related to race & class can produce barriers to the free expression required to state one’s objection.
On the upside, consent rewards self-responsibility to express one’s opinion knowing that others will have to listen to respond to the objection. However, while consent works well in small group decision-making, it faces the same challenge as does consensus when scaled to larger organization-wide decisions. This limitation can be overcome in how the debate is structured with objections rippling across and up-down the organization hierarchy. Sociocracy also addresses this scaling through how the organization hierarchy is made up of nested circles with built in bi-directional lines of communication. When compared to other decision-making approaches, this decision approach has many benefits and the necessary culture and training needed for consent will have beneficial spill over into other organization behaviors.
Advice — this decision process blends autocratic (having decision rights) and consent (involving others) to enable quick action while still including everyone who needs to be involved. In the consent process, everyone has the right to disagree and slow the decision until all objections are either fixed or the objection is withdrawn. This consent process is altered in advice by requiring the decision-maker to consult with everyone impacted or otherwise involved with the problem or implementing the decision. However, there is no requirement that the advice received be taken. In this way, objections can remain unaddressed but overruled by the decision-maker. While this greatly speeds up the decision process, it also places more responsibility on the decision maker in the event that one of the unaddressed objections becomes dominant in limiting the effectiveness of the decision. Risk reduction will then lead the decision-maker to lean toward consent. The decision maker also takes on the responsibility of identifying the group of people who will be consulted for advice on the decision which may also include asking who else may need to be involved? While there is personal responsibility of decision risk, that risk may be spread over the group involved in making the selection. Further, the advice process also requires a high level of trust across the organization since the decision rights granted can be very wide.
Breadth of Decision Rights — limitations on the decisions that can be made by any one person or team can vary in the above decision processes. These constraints can include explicit delegation for solving a specific problem that has a boundary to problem categories that can include scope or financial boundaries. Clearly defined decision rights can enable quick decision making but can also lead to many exceptions that do not fit within the predetermined boundaries. This may then require a clearly defined decision process for routine issues that arise and another process for exceptions that are likely to arise due to emerging conditions.
Which is the best decision process?
As we have seen before, the answer is “it depends” on several factors. Crisis situations require a fast decision that is possible with an autocratic or advice process. In these instances, the problem-solving steps can be shortened while knowing that this may increase other risks later — trading off possible unintended consequences from limited feedback for an immediate response to a fast-growing problem. On the other hand, getting everyone involved using consensus or consent will lengthen the problem solving and decision process, but will speed up the implementation phase since there will be group commitment for the decision, not passive compliance that may otherwise result from a more dictatorial process used.
The scope of the impact may drive the organization toward including more stakeholder involvement, thereby requiring a process that scales well such as consensus with linkages between levels or sub-groups. This involves a trade-off of time for wider commitment that may be necessary for successful implementation. An example here might be addressing a toxic behavior that is deeply embedded in the organization culture. Majority voting could also be employed when determining the scope and speed upon which a decision may be decided. In this case, there may be agreement on the desired end-state while significant disagreements remain on the implementation process.
Patterns of organizational behavior may lean toward certain processes that would otherwise have to be addressed before a different decision process could be enabled. An example is a traditional, hierarchical organization that has a long history of positional power driving decisions with learned helplessness outside a privileged group. Effective cross-organization communication is required in consent and advice processes while autocracy is suitable for a siloed organization, assuming the decision falls within the scope of the silo and does not span any intraorganizational boundary. Values for how conflict is resolved will also lean toward the political, hierarchical power on one hand or the trust needed for consent and advice approaches.
One significant shift from traditional hierarchies to agile network organizations involves how people are directly involved in decision-making versus “being changed” which is too often the norm of Industrial Era thinking. Introverts can gain a voice that would otherwise be shouted down, but the necessary culture of listening to all voices is required to minimize the fear of being judged by one’s peers. Formal processes in sociocracy provide some ways to transition toward consent and eventually building up trust for advice in some circumstances.
Finally, the unclear decision process would seem to be the least desirable of all approaches leading to confusion, slow response to problems, and no commitment to support change. However, there is a place for explicit recognition of this process when forming new teams that requires the flexibility to discover the best approach for their use. Further, the organization may have a cross-organization preference for how decisions are made with some accommodation for local work rules.
Summary
The traditional power structure embedded in the traditional hierarch has long driven how decisions are made with the authority for decision rights being delegated depending on the scope and impact of the decision on the organization. Increasingly, the stability required for this approach to decision-making is giving way to newer thinking about how to quickly involve more people in the problem-solving, decision-making, and change implementation. These shifts in structure and operating style also involve clarity of purpose that carries the voice of the customer across the organization, new role clarifications that quickly evolve with need, information transparency to eliminate that source of organization power, and an entrepreneurial mindset to keep moving forward in collaboration with others. Further, shifting to new approaches for decision-making cannot be done without consideration of how the necessary changes will impact other organization processes and behaviors since decision-making is at the heart of how organizations function.
Reflection
· What is the dominant decision-making process in use in your organization?
· Are there any local variations that may involve limited decision rights?
· What opportunity do you see for clarifying decision rights or employing a different decision methodology?
References
Duarte, N. (2022, April). Effective leaders decide about deciding. MIT Sloan Management Review. https://sloanreview.mit.edu/article/effective-leaders-decide-about-deciding/
Marlow, G. (2023). The double disconnect: The inevitable consequence of an outdated orthodoxy. Retrieved 2/28/2024 from https://geoffmarlow.substack.com/p/the-double-disconnect
Rau, T. (2023). Decision-making methods: a comparison. Retrieved 11/1/2023 from https://www.sociocracyforall.org/decision-making-methods-comparison/
Yip, J. (2017). Different group decision-making methods. Retrieved 8/30/2023 from https://medium.com/p/3da74fc16553
