Nothing tells you more about an organization than the way it makes decisions. Do leaders trust team members? Do the people closest to the action get to make the call? Do team members have real responsibility and real control? All of these questions can be answered by one other one: who gets to make the decisions? And nothing affects an organization more than the decisions the people in it make.
Great business minds know this. In fact, decision-making is at the heart of all business education. Nearly a hundred years after the case-study method was invented at Harvard, it’s still the foundation of the world’s best business programs. Why? It’s because the case-study method puts top business students in the role of decision-maker. Over the course of a Harvard MBA, students will make decisions on more than
500 cases. Decision-making is simply the best way in the world to develop people. And real-life decisions are more important—and more fun—than any case study.
But outside of business school, few business leaders tap into the value created by putting important decisions in the hands of their people. Instead, "team players" are taught to do what they’re told. This takes the fun out of work, and it robs people of the chance to contribute in a meaningful way. Or, organizations will use a participatory style of decision-making in which recommendations are given to the boss, who then makes the final decision. This approach also fails to fully realize the value of the people in the organization. What I am talking about is quite different. In a decision-maker company:
- The leader chooses someone to make a key decision
- The decision-maker seeks advice (including from the leader) to gather information
- The final decision is made not by the leader, but by the chosen decision-maker.
The principles are simple. Some might even say common sense. Yet, they are seldom put into practice. But, building your business on these assumptions, using these simple but powerful techniques, can transform a business—and people’s lives.
People are unique. Fairness doesn’t mean treating everyone the same way. Some people want time off, some people want a raise. It doesn’t make sense to give everyone the same rewards and incentives, because every person is different. When we treat people as individuals, we unlock each person’s unique motivation and potential.
People are creative thinkers. People are capable of coming up with good solutions to problems. They don’t need to be told what to do at every juncture. In fact, the people closest to a situation are often in the best position to come up with a solution. When we set people free to think creatively, they come up with solutions we never could have gotten to by following rules and regulations.
People can learn. We don’t stop learning when we come on the job. People are capable of educating themselves to meet new challenges—and capable of educating others.
People are fallible. We all make mistakes. We have blind spots. And sometimes we just plain do the wrong thing. To work to our best ability, we need the input and insight of others.
People like a challenge. People aren’t machines. We weren’t built to do the same thing over and over again. We’re happiest when we get to meet a new challenge—and master it.
People want to contribute. Each of us has something unique to offer, and we want to contribute it toward something that matters. We work best when we feel like we’re making a positive contribution to the world.
People are responsible for their own actions. It’s fair to hold us accountable for the consequences of the choices we make.
People can make important decisions. Leaders aren’t the only people in the company who are capable of making good decisions. People are happier, decisions are better, and companies are more productive when decision-making is distributed among all the people in a company.
In a decision-maker culture, the most important choice a leader makes is: who makes the decision? These are hallmarks to look for in a good decision-maker.
Proximity. Who’s close to the issue? Are they well acquainted with the context, the day-to-day details, and the big picture?
Perspective. Proximity matters, but so does perspective. Sometimes an outside perspective can be just as valuable as proximity.
Experience. Has this person had experience making similar decisions? What were the consequences of those decisions?
Wisdom. What kinds of decisions has this person made in other areas? Have they been good ones? Do you have confidence in them?The Advice Process Nobody knows everything, and even an expert can benefit from advice. In a decision-maker culture, the decision-maker makes the final call but must ask for advice. Whom should a decision-maker approach for advice?
Experience. Has this person had experience with this problem? There’s no teacher like experience.
Position. People in different positions see different things. The decision-maker asks a leader, a peer, someone who works in a position below them in the hierarchy—and even, if circumstances warrant, experts from outside the company.
Responsibility. Decisions have consequences—and decision-makers should be held accountable for theirs. At the same time, nobody is right all the time. The most important part of any decision is that the decision-maker fully engages with the advice process, not just that he or she gets it "right."
Ownership. When people are asked for advice, they start to feel ownership. Ideally, everyone who offers advice works for the success of the project as if it were their own. The advice process isn’t just about getting the right answer. It’s about building a strong team and creating a process of communication that will improve all decisions in a company.
Excerpted from The Decision Maker: Unlock the Potential of Everyone in Your Organization, One Decision at a Time, available today from Pear Press.
—Dennis Bakke is the co-founder of Imagine Schools. He previously co-founded and served as the president and CEO of AES, a Fortune 200 global power company.
[Image: Flickr user G CACAKIAN]