Adopting a Common Decision-Making Framework: The critical first step to enabling the empowerment of your team
The performance of any organization is ultimately a function of the quality of its members’ decisions and their ability to execute those decisions effectively. The bottom line is that your organization’s performance will suffer if your team makes more bad decisions than good ones. It may take only a few catastrophically wrong decisions to obliterate your organization. A 2013 Bain & Company study quantified the financial impacts of good decision-making as follows:
Decision effectiveness and financial results correlate at a 95% confidence level or higher for every country, industry and company size we studied. Top-quintile companies on decisions generate average total shareholder returns nearly 6 percentage points higher than those of other companies.
While decision-making skills are critical to an organization’s success, few leaders say that their organizations are very good at making decisions. A 2019 McKinsey Survey revealed that:
Only 20% of respondents say their organizations excel at decision-making. Further, a majority say that much of the time they devote to decision making is used ineffectively.
What is remarkable, then, is that so few companies and leaders make improving their team’s decision-making skills a specific goal or initiative. As I discussed in a previous article, a 2020 Harvard Business Review study reveals that only 7% of organizations arm their teams with the analytical tools and resources vital for autonomous decision-making.
If you are a leader who recognizes the powerful impact you can make on your organization’s performance by enabling your team to make better decisions, where should you start? Another McKinsey study provides an important insight:
After controlling for factors like industry, geography, and company size, we used regression analysis to calculate how much of the variance in decision outcomes was explained by the quality of the process and how much by the quantity and detail of the analysis. The answer: process mattered more than analysis—by a factor of six.
So, rather than focusing on more advanced analytical tools and technology, the data tells us that we must start by ensuring that our team utilizes a sound decision-making process. This is why any leader who wants to empower their team to make better decisions must first enable them by adopting and implementing a common decision-making framework that they and their team members will use for making and communicating decisions. This common decision-making framework should be flexible so that it can be used efficiently for relatively simple decisions but can also be “scaled up” for more complex decisions. Furthermore, it should also be designed to mitigate the effects of cognitive bias (more on that in my next article).
Implementing and training your team on a common decision-making framework can have the following benefits:
- Better, faster training – By adopting a single decision-making framework and having the whole organization apply it; we can develop scalable training materials, classes, and interventions that we can use to teach our teams how to apply the framework efficiently and effectively.
- Increased engagement in decision-making – When we all use a common decision-making framework, we all know what the “next step” in the process is, and we are more able to jump in and back each other up.
- Streamlined communication – When we all use the same decision-making framework and communicate our decision-making process using that framework, team members develop a common language that allows them to share their decisions more efficiently and effectively. Furthermore, communicating our decision-making process using a common framework allows leaders to give the team better feedback regarding the quality of the decision.
Allow me to share a real-life example of this last point. As I mentioned in a previous article, one of the simplest and most effective techniques I have found to create a culture of empowerment on my teams is to ask people to give me a recommendation rather than ask me “what I want them to do.” When I first started doing this, however, I got a lot of funny looks. Their recommendation often made little sense, and I felt like they just tried to guess what I wanted them to do. As a result, I spent an unsustainable amount of time talking through their decision-making process with them. The problem was that they needed more training or experience in making decisions and learning how to communicate their thought process. However, once I taught the team a common decision-making framework, I communicated the expectation that when they gave me their recommendation, they followed the steps of the decision-making framework. This dramatically streamlined the conversation and added the benefit of forcing them to apply the decision-making framework before they called me with their recommendation. For instance, one of the steps in our common decision-making framework was to “Brainstorm Alternatives.” I set the expectation that when someone called me for help with a decision or to request approval, they followed the decision-making framework; they knew that I expected to hear the alternatives they had considered without asking for them. This put the ownership on them and ensured they had at least tried to brainstorm alternatives before we discussed the issue while still providing me an opportunity to help back them up in case there were viable alternatives they hadn’t considered.
In a future article, I will provide an example of a common decision-making framework you can adopt and teach your team. If that is of interest to you, I encourage you to “follow” me, and to “like” or “repost” this article so that LinkedIn’s algorithm will ensure it shows up in your feed.
In the meantime, I’d love to hear your thoughts on this article in the comments.
Thank you for investing your time in this read.
Seeking to enable your team to make better decisions? Schedule a consultation with Chris. There’s no cost.
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Chris Seifert is an operations leader with 25+ years of experience managing high-risk, complex manufacturing operations and advising senior executives on strategy, leadership, culture, and execution. Most recently Chris led Enviva Biomass’s manufacturing operations, first as VP HSEQ and then VP Operations, during a 6-year period in which revenue grew from $450MM to >$1B, plant production increased by >200% through commissioning new assets, integrating acquisitions, and organic growth, while reducing safety incident rates by more than 85% and growing adjusted EBITDA by >250%. As a Partner at Wilson Perumal and Company, Chris founded and grew an Operational Excellence Consulting Practice and became recognized internationally as a leading expert on Operational Excellence (OE), Operational Discipline (OD), and Operational Excellence Management Systems (OEMS). Chris has also served as a Plant Manager for Georgia Pacific and Owens-Corning and served in the US Navy Nuclear Submarine Force as a Supply Officer.
