In the degree of success an organisation achieves. In the energy of the people who are supposed to execute them. They are the element that keeps an organisation alive. Organisations also suffer from their decisions or non-decisions, if you’ll allow me to indulge in a little personification. Decisions that are bad or avoided can result in paralysis, chronic conflicts or ineffective busy-work. The after-effects of decisions can damage the organisation for years, or they can mark a turning point. So let’s take a closer look at whether and how the practice of making decisions in organisations can be improved on a lasting basis.
The term “decision” covers quite a lot, of course: strategic decisions and major investments just as much as hiring a new clerk or choosing what colour the signs in the parking lot should be. No matter how varied the effects and complexity of decisions may be, good decisions – in my view – are generally characterised by certain qualities that make them “usable” for an organisation.
The ultimate effectiveness of a decision is not foreseeable at the time when the decision is taken.
Decisions that are worthy of the name are basically bets on a future yet unknown.
Hence, the effectiveness of a decision cannot be determined by its objective level of “correctness”. What then determines the effectiveness of a decision?
I say: it’s the effect that it has on an organisation’s energy and ability to act. In the case of an individual decision, you could say that you can judge its quality based on whether or not the person who made the decision regrets it. If a person doesn’t regret it, then it was (from that person’s point of view) a good decision. However, whether I regret it or not does not depend chiefly on the content of the decision, but rather on my relationship to myself. When I regret a decision, I judge myself and my past self – but that then prevents me from focusing my full energy and attention on the present and getting the best out of it. But if I concede that I made the decision to the best of my knowledge and abilities – even if the consequences are unsatisfactory – then I won’t regret it. And my heart and mind will be free for the next step in the right direction.
So one key effect of a decision is the
Energy
it releases – in the individual or, in the case of an organisation, among the many people who are involved in executing it. And that energy in turn is crucially impacted by the extent to which the decision-maker is credited with having acted according to the best of his or her knowledge and ability. But how does the collective feeling develop that a decision was the best one that could have been made at the time?
One factor – if not the single most important one – that determines an organisation’s ability to be at peace with its decisions is its
Focus on goals
For a decision to serve a goal, there must be a goal. Ideally, one that is meaningful. That sounds like a generalisation, but it is surprising how often we experience organisations that live by the motto: we don’t know where we’re going, but let’s hurry up and get there. Just recently, we advised a service provider where several strategic directions were competing with one another at the executive level. Despite the unanswered question of what direction to take, the proponents were driving their projects forward with the best intentions and with great energy. That resulted in a lot of follow-up tasks, but most of them cancelled each other out; as a result, it all had very little effect. Instead, the burn-out rate skyrocketed.
Assuming there are shared goals, decisions are more fruitful when they are aligned with them in an understandable, well-founded way. In the case of complex issues, this also requires the appropriate opinion-forming process, because it’s much easier to understand and accept how different underlying reasons are interconnected when you are in dialogue as opposed to sending out one-way messages.
And ultimately, decisions are also more focused on goals when people (with experience) in organisations are allowed to trust their gut feeling. According to Gigerenzer, gut feelings are condensed experiences which – under the right conditions – lead to goal-focused decisions more often than ones whose reasons have been thought through rationally down to the last detail. The courage to follow this type of coherence, however, requires both autonomy and a very specific culture of error that makes it possible for a group to learn from their mistakes and not slide into the blame game out of habit.
Acceptance
Another factor that exerts a significant impact on the energy within an organisation to implement its goals is the acceptance of everybody who is participating, affected or even just observing. Even though executives are authorised to issue directives, the quality of the implementation is certainly directly proportional to the staff’s acceptance of a decision. And in many cases, that authority is not vested in one single person but rather depends on colleagues from other departments. In addition to the apparent reasonableness of the focus on a goal, acceptance is created when people see who is allowed to make which decisions, who is involved in the opinion-forming processes in what way, and what process is used for group decisions. In terms of the last factor, we have recently seen the rise of a trend toward resistance decision making. The advantage of decision methods like sociocratic consent and systemic consensus is that they enable quick decisions in dynamic environments; this is because they do not require 100% affirmation from all the people involved, even though they provide people the right to object if a particular angle gets lost in the shuffle.
Efficiency
Giving everyone a voice and making decisions as a group – the source of acceptance – carry a price: they require more work than decisions made by one person. At the same time, overly frequent and laborious decision-making processes involving too many details undermine the acceptance of the acceptance. Not everyone wants to have a say in everything. Giving each individual some autonomy that can’t be meddled with makes sense in terms of the quality of execution as well. While discussions and decision processes can be structured well or poorly, the art of striking a balance between acceptance and efficiency lies in the answer to the question of what is decided (or at least debated) by whom, alone or in what team/committee. Thus, the structure (= distribution of the authority to make decisions) is also one of the key decision premises (those factors in a company that characterise the general handling of decisions).
Commitment
When the quality of decisions in organisations is criticised, it is often due to a lack of commitment. When that happens, decisions are overturned but the people affected can’t understand the reason for the change of direction. This often occurs because people who are not involved or not sufficiently considered raise objections after the fact, usually escalating the matter in traditionally structured companies. In this case, the lack of commitment is a sign of a lack of acceptance, which in turn can result from issues such as a lack of communication processes, an absence of goals that unite and/or use the Star Model of leadership. In our experience, commitment is often lacking because it is not clear whether a firm decision has been made or the discussion process is still ongoing. The “ritual signs” that make things visible to everyone are lacking: Deal or no deal? Deal! However, in an effort to avoid the loss of energy and focus that comes with too little commitment, some organisations go over the top. Once decisions are made, they are valid for long periods of time and are hard to question or revise. But this type of set-in-stone commitment hampers the
Flexibility
needed to react quickly and appropriately in a changing environment. There are many factors that impact flexibility. One key factor is how flexibly and attentively roles and interfaces are defined within the organisation. Changes in the environment often – if things go as they should – translate into changes in the distribution of internal roles. The prerequisite for this is that the organisation must: a) treat the definition of internal roles as an ongoing leadership task, and b) maintain the mindset that transparent changes (in roles) are normal, so that such changes are not a constant cause for resistance. Practices and systems that promote dynamic decision-making are helpful here: agile and resistance decision-making practices that work on the premise “good enough for now, safe enough to try”. In other words, not dragging out the design and debate processes until the best solution is born, but rather implementing approaches quickly and then learning and developing them further through practice and feedback.
Decision-making premises
An organisation that is unable to arrive at a decision without first figuring out who should make it and how, will probably not survive in the long run. In order to escape this fate, organisations make meta-decisions – decisions that either preempt other decisions or limit the options, or dictate the processes, responsibilities and methods that must be used to approach a certain issue. Niklas Luhmann refers to these meta-decisions as “decision premises”, and he defines four different categories: programmes (= processes and guidelines), communication paths (= hierarchies and roles), people and the organisational culture.
Since any single decision can unleash a significant impact on the organisation, designing the decision premises in a purposeful and targeted way and making sure the premises coherently intersect is the single strongest lever that leadership can use to influence an organisation’s effectiveness in the long term. And, in our view, that makes it the key task for leadership.
