By adopting a carefully considered approach to decision rights, organizations can foster a culture of transparency and accountability that will help them become more adaptive, responsive to customer needs, and competitive in the market.
As important as it is to get decisions “right,” a surprising number of organizations lack clarity about just what decisions need to be made, who is responsible for making them, and how the decision-making process should unfold.
Research shows that in many organizations, ambiguity surrounding who is responsible for making a decision (or decisions) is a primary cause of delay in the decision-making process. Such delays can cause an organization to lose valuable time developing new products, updating current products to meet changing consumer demands, and entering new markets.
Fortunately, getting decision rights right depends on a surprisingly small set of factors, according to a Deloitte analysis. Organizations that have established an effective decision-making strategy tend to do the following:
Simplify and clarify decision rights across the organization. Identify and clearly communicate who is responsible for making which decisions, what decisions must be made, and how the decision-making process should work. Simplicity and clarity in decision rights can sometimes prove to be the missing ingredients in a transformation effort that seems to have gotten stuck.
Establish strong, transparent accountability for decisions. Accountability is not about identifying where to place the blame for decisions gone wrong. Instead, it’s about evaluating outcomes against agreed-upon metrics and determining how broadly within the organization to share those evaluations. The aim is to enable the organization to better learn from both its failures and successes.
Align individuals in decision-making groups to a common mission. Unhelpful competition and dissent within a decision-making group can slow the process and sabotage decision quality. Establishing a clear common mission for the group can help counter this risk, allowing the group to reach decisions more quickly and with less unnecessary debate.
Encourage distributed authority. When appropriate, empowering employees at all levels to make decisions can pay off in greater agility and responsiveness. To avoid creating confusion, it’s important to explicitly articulate which frontline workers have the authority to make which decisions under what circumstances.
Prioritize the customer voice in decisions. Among the most important ways to better understand customer wants and needs is for organizations to listen more closely to what their customers are saying. Giving customer-facing workers more decision-making authority is one way to increase customers’ influence and the company’s responsiveness to their needs.
For an in-depth look at the analysis—including how companies can change organizational practices to improve the way decisions are made—see the full article, “Getting decision rights right: How effective organizational decision-making can help boost performance.”
—by David Mallon, vice president, Human Capital; Don Miller, managing director, Human Capital; and India Mullady, senior manager, Human Capital, all with Deloitte Consulting LLP; and Tiffany McDowell, PhD