Decisions, Decisions: A Roadmap to Better Business Performance
BY Lou Arace and Kristen Johnsen
March 2, 2021
March 2, 2021

What’s one thing that 99.9% of businesses—regardless of industry, size, or vertical—struggle to execute effectively? (Hint: It’s a big one with many repercussions on business performance.) While some companies wrestle with problems relating to business strategy, customer service, or keeping up with the pace of technology, there’s one major operational issue that seems to eclipse them all, dragging even the most successful businesses down. If you guessed—or rather, decided—that the answer must be decision-making, you’ve hit the nail on the head.

Most of us have encountered this issue firsthand and have seen the impact poor decision-making can have on business performance. Although the problem is nearly universal, the reasons that lead to it can vary from one organization to the next. Some companies, for example, don’t properly define roles and responsibilities upfront, leaving employees wondering who has the power to make judgment calls and how the process should play out. What typically happens next is a whole lot of nothing—when people don’t feel empowered to call the shots, or they’re fearful of making the wrong move, decisions simply don’t get made at all. Allowing for non-decisions is, in fact, a decision, and it’s one that can often lead to increased conflict and a lack of clarity among leaders and employees alike. In other cases, decisions are made but they’re made too late, which ultimately dilutes their impact.

Oftentimes, growth is the culprit. As companies embrace globalization, scale their operations, and become more complex, they neglect to develop a decision-making model, and this lack of structure causes confusion, internal misalignment, and stymied or stagnant business performance.

Mastering the art of decision-making isn’t as simple as putting a process in place and calling it a day. To really get at the heart of the matter, you must also consider the human element, because making decisions—even those backed primarily by hard data—is a people-centric undertaking. Understanding how different employees approach options, cope with change, and resolve conflict all come into play when designing a decision-making framework.

Align Decision Rights with Business Outcomes

Establishing decision rights should be your first priority, as it will help you answer questions like, “what decisions need to be made and who makes them?” and “who is accountable?” This may seem like an obvious starting point, but it’s one that many companies overlook in their mad rush to make and execute a decision. While many stakeholders will be involved in the decision-making process as it unfolds, alignment must start at the top. When leadership neglects to provide the proper clarity and accountability, it creates a ripple effect, driving inefficiency throughout the rest of the organization. The RACI model (Responsible, Accountable, Consulted, Informed) is an established yet underused tool that can help you define and document roles and responsibilities to increase communication, collaboration, and teamwork across projects.

The key to making decision rights click is proper alignment. If the decisions you’re prioritizing don’t jibe with your overarching business goals, you’re wasting your time on the wrong initiatives. Think about the most important business outcomes in your organization—what decisions need to be made to ensure progress on those outcomes? When you establish a decision inventory, which is simply a catalog of the decisions that need to be made in your organization or business unit, and determine who is responsible for each one, you may realize that other decisions you’ve been focused on aren’t nearly as important to your business’s performance as you once thought. The upshot of mapping these things out is that you’re often presented with an opportunity to streamline and improve decision-making around the issues that matter most.

Empower Those Who Are Doing the Day-to-Day Work

Do leaders need to possess strong decision-making skills? Absolutely. There’s got to be someone at the top with the ultimate decision-making authority, especially when it comes to large-scale projects that your company has invested a massive amount of time, money, and resources into. But chief executives and others in the C-suite shouldn’t be the only ones with the ability to move strategies or tactics forward. Organizational leaders may have a bird’s eye view of the business, but no one’s more in touch with the nitty-gritty details than those who are doing the day-to-day work.

As a result, decision-making should be pushed down to those on the front lines who are impacting the business in tangible ways on a daily basis. By giving these employees the information they need, they’ll be better equipped to make sound decisions. With the right information—the right “North Star” tied to business goals—team members who are closest to the customer are less likely to make mistakes as they work to achieve the goals that have been laid out for them.

Putting the power in employees’ hands will have several benefits, including increasing the speed of decision-making. If employees involved in the day-to-day work are able to outline the problem, the decisions needed, and the options available before the top execs weigh in, the likelihood that a decision will be made is much greater.

This approach will improve the employee experience as well. Employees will be more engaged and work harder if they feel valued and if they’re able to see the impact they can have on the organization. Engagement ultimately hinges on how easily and effectively employees can contribute, and whether the trust they’ve been given encourages their commitment to drive the right results. Providing clarity on purpose, process, goals, and roles is the key to unleashing that commitment and ownership of results.

Setting up a clear process can also help to ensure everyone is moving in the same direction. For example, some people need 99% of the necessary data before pulling the trigger, while others make choices based more on gut instinct. The goal is to move everyone towards a middle ground which balances time for analysis with the bias for action. Employees at all levels tend to benefit from a defined process that helps them find and maintain that balance.

When you don’t put the power in employees’ hands, you end up with a giant bottleneck: If you’ve only got one person acting as gatekeeper at multiple stages of the decision-making process, you can bet that progress will be slow and cumbersome.

Establish a Post-Decision Governance Game Plan

It’s a tale as old as time: Stakeholders are consulted, options are considered, and a decision is made. Time to break out the celebratory bubbly, right? Not until you’ve implemented it effectively and set up a system to track its success. Too often, this is where things unravel.

While many organizations make their way to implementation without too many hiccups, few really track the impact of the decision as time marches forward. Consider things like how much it cost and whether it was effective in the long term. This feedback loop can help you fine-tune whatever decision-making frameworks and processes you’ve put in place. To cover all your bases, be sure to answer questions such as:

  • How will we measure implementation success?
  • What updates are required for leaders?
  • What is the cadence for these updates?
  • How will we evaluate decision success?

Decision-making skills are valuable for all employees and levels of management, and it’s up to your organization’s leadership to invest in building these capabilities among your teams. Focus not just on individuals, but on your company’s culture at large. Are employees encouraged to speak up and take control or do you need to build a culture of empowerment? Even a well-constructed RACI can’t solve for a culture where employees don’t feel comfortable voicing their opinions.

It may feel like you’re left with more questions than answers, but it’s critical that you scrutinize the very nature of your organization and determine what your decision-making process should look like in order to support key business goals. Cultivating these skills across your company takes time and careful planning, but it can make a world of difference in the way your business performs. If you’re not sure where to start, you know where to find us.