The Five Sources of Organizational Decision Drag
Having a Great Strategy is Useless if Decision Making is a Tar Pit
This is the second of a two article series on developing a startup culture that drives decision making excellence. Check out part one, What Startup Leaders Can Learn About Cultural Strategy from a Polarized Political Environment.
“Having made the decision, do not revise it unless some new fact comes to your knowledge. Nothing is so exhausting as indecision, and nothing is so futile.”
― Bertrand Russell, The Conquest of Happiness
Strategy is intended to influence actions and decisions of the organization by coordinating decision making toward the objective. Most organizations adequately articulate their strategy, but many of them have no clear approach to creating an environment of decision making to drive to the goal. Decision making fuels progress at your startup. The alternative is living in a state of decision drag. Why is it that decision making can be so difficult even when strategy is clear?
The Roots of Decision Drag
1. A decision is a commitment and commitment is scary
People often assign far more importance to decisions than they deserve. They may assume that decisions are immutable. Research shows that people often overestimate the long-term importance of events and decisions. Few decisions are true “one-way doors” but overestimating the downside of a wrong turn is common and can be paralyzing for decision making on teams.
- Ensure decision owners have support. When a decision is made, the people who consult and review this decision take on the responsibility as a group.
- Create incentives. Critical business decisions should be attached to a KPI framework such as OKRs.
- Work to create an environment that is safe for an appropriate level of risk taking. Reactions to individual and team failures set the tone for future willingness to take risks.
2. A decision is based on available knowledge but information is unreliable, inaccurate, and speculative
Startups move fast and often lack the resources or time to get all the information they need to feel fully informed. A blend of partial data and intuition is all that most teams will have in the short term. A lack of alignment on the acceptable risk posture of teams can set an uneven or ambiguous bar for decision makers.
- Set the risk bar for what quality of information is needed to get to a decision. Clarity about how much risk is acceptable allows for stronger buy-in to get past decision draggers like “unknown unknowns.”
- Encourage risk taking by having a culture of iterative learning rather than quantum leap decisions.
3. A decision represents the loss of the path not taken; someone has to lose; arguing feels personal
If we think of a decision point as a fork in the road, the decision itself can be interpreted as a loss of opportunity on the path not taken. Typically there was an advocate of the unchosen path whose idea didn’t clear the bar and their influence may drop a notch.
- Diverse idea contributors represent your greatest opportunity for innovation. Set the incentive toward ideas themselves, not just winning decisions.
- Remind your team that the state of your business will always be as much about the things your team chose not to do as it is about those things your team chose to do. Your enterprise value is built on both.
- Set the goal to beat the crap out of the ideas on the table, not the people who shared them. Praise teams that do this well and coach those that do not.
4. Leaders are often the only people allowed to make decisions and some don’t listen to their teams
Organizations literally get dumber when strong leaders hold decision making authority alone. Decades of research demonstrate two key findings:
- The higher people are in an organization, the less likely they will take the advice of their subordinates.
- Diverse perspectives yield greater quality decisions and innovation (read The Wisdom of Crowds by Surowiecki).
Pairing these findings with a lack of delegation, the stage is set for decision bottlenecks, poor quality decisions, and low organizational creativity.
- Start listening more and speaking less.
- Delegate to the lowest capable level of your organization and incentivize your leaders to follow suit.
- Drive training and clarity of expectations to lower organizational levels to improve the potential for #2.
- Reward initiative at low levels of the organization to demonstrate commitment to #2.
- Share stories of when you were wrong about a big decision and changed your mind.
- Encourage your team to engage in debate with you in ways that are low stakes and non-threatening.
5. On weakly diversified teams, the set of options available may constrained; groupthink prevents strong debate
The best solutions come from a broad set of options and often require ideas brokered from other problem domains and non-traditional sources. In a perfect information economy, your competition has access to the same information you do. Finding truly unique information requires thinking differently. Weak diversification and groupthink chokes off the fuel of innovation.
- Hire, train, and promote to drive diversity in all forms.
- Actively seek out contrarians to contribute to the debate (but be careful to maintain decision ownership clarity).
- Clearly distinguish between weakly held opinions and when you have arrived at a firm decision.
Listen, Learn, Lead
Identifying the source isn’t enough. Seek to eradicate the root causes of drag, which likely include a lack of clarity on how your people are expected to engage one another as they navigate decisions. Take a look at your culture. Survey your teams. Start by listening and learning, and then lead. Otherwise you may witness an unintended culture eat your strategy for lunch.