Bad decision making is holding you back

One of the most important tasks in an organisation is the task of making decisions. I’ve worked in organisations that employ different models and approaches. During this time I’ve seen it done well and I’ve seen it done badly!

So what does it mean to make good decisions? How do you know if you’ve made a good decision? What does a good decision look like? Do you need to wait to see the outcome to decide whether it was a good decision?

Above all, we need to distinguish between a good decision and a good decision making process. A good decision making process can produce a bad decision. It’s how the organisation reacts to that bad decision that is most important.

In this post:

• The ingredients of good decision making.

• An example of a model for making good decisions - RAPID

• How an organisation should react when things go wrong.

The ingredients of good decision making

1. High input, low democracy

I don’t believe organisations should be democracies. Maybe that’s controversial but let me explain. I’m talking here about the specific task of making decisions.

There are always a myriad of views, interests and feelings around a specific decision. It’s important to take on those views but ultimately there needs to be one person to make the decision who is able to balance all of those views, the overall company strategy and how the decision will impact the wider stakeholder groups.

I’ve been there in meetings where everyone in the room feels they have a legitimate veto on the decision being made. This simply results in paralysis and ultimately an unproductive organisation.

1. Listening.

The best leaders I’ve seen seek out views of the team first before giving their views. I’ve also seen examples of the opposite where the team leader comes into a brainstorm meeting and immediately gives their views. In this situation, the team tended to fall in line with the view of that leader. This approach can significantly curtail innovation and diversity of thought. In some circles this could be called “groupthink”. Don’t do that!

1. Ensure that analysis is proportional to the risk

Amazon talk about one way and two way doors. One way being irreversible decisions. This could be a decision to close a factory or sell a particular part of your business. Once done, there is very little going back.

For two way door decisions, you know you can rein in on the change if things start to go awry. An example here might be a new product or marketing channel. By keeping close to project as it’s rolled out you can make quick decisions to reverse a change. However, the pitfall you can fall into with a two way door decision is reigning in just before it’s about to become a success. With one way door decisions you have to stay the course!

1. Be Decisive

With the above points you should be a in a good place to make a decision. The key now is to make that decision quickly and decisively.

RAPID: A useful model for making good decisions

We have all heard of and no doubt experiences RACI. The problem with RACI is that it’s not always clear what the difference is between the accountable ‘role and responsible role. An alternative that could work for you is RAPID (Recommend, Agree, Perform, Input, Decide).

What you must do before you apportion roles is to clearly define the decision. The roles should then flow from there.

R - Recommend 

The Recommend group are the people the Decide person turns to for profession expertise. Ideally this is a diverse group covering different viewpoints. Again, they should be made aware that they aren’t there to Decide and are there to provide their expert opinion in a clear and concise way. Their information should be fed into the decision process at the right level of detail. This is a skill in itself.

A - Agree

The people in the Agree group have a specific remit to check against. This might be a lawyer to check that a decision isn’t going to get your organisation into hot legal waters. Or it might be your data team checking that you are compliant with personal information laws. It’s for items that have a narrow focus.

What the Agree people need to know (and be told!) is that they don’t have an overall Agree remit. They Agree/Disagree on their narrow field and then have just a Recommend role for the rest of the decision at best.

P - Perform

The Perform people are those who will ultimately have to carry out the activity once the decision has been made. It is often a good idea for these people to have a Recommend role too so that they feel engaged. At the very least it should be an Input role.

I - Input

This group provide information or analysis but not a recommendation. This is often objective analysis to help the Decision maker.

D - Decide

The most important person has the D. The Decide. They have the power and authority to make the decision. Not a group but one person who has the final say. They can delegate that authority. That’s fine. But it needs to be a clear individual who can say yay or nay.

How an organisation should react when things go wrong!

Primarily, as long as the above steps were taken there is no such thing as a bad decision, but things can still go wrong of course. No decision is risk free. It’s impossible to make decision with hindsight so a good organisation will accept the situation and ensure there are adequate processes in place to learn for next time.

However, many organisations simply move on to the next big thing and some even forget to check whether the project delivered it’s expected benefits! These organisations miss a massive opportunity to learn for next time.

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Making decisions quickly and effectively is crucial for all organisations. How does your organisation make decisions?

Is there anything in this post you might take away and use?