How To Unleash Decision-Making Across Your Entire Organization
"How are decisions made in your organization? Is there a single planned approach? Or are there as many ways as there are people in the company?"
With this set of questions the authors of Reinventing Scale-Ups (Brent Lowe, Susan Basterfield and Travis Marsh) kick off their chapter on decision-making. Two years ago we met Brent in Canada. More recently we met with Susan in New Zealand, and discussed the topic of ‘consent decision-making’ in depth. What is ‘consent’ exactly? And why is it important?
As the authors explain, “Despite the critical role decision-making processes play in business, the topic receives little consideration.” This is in contrast to teams within some progressive workplaces where the establishment of a consistent, transparent, rapid and effective decision-making process seems to be an essential practice.
In traditional organizations, two decision-making methods are popular:
- The directive, top-down decision-making method.
- The participatory, consensus decision-making method.
“These methods, or versions thereof, fall on opposite ends of a spectrum. At one end, leaders dominate by making decisions, then telling their teams how to implement those decisions. At the other end, teams become paralyzed as they try to reach consensus, or they appear to reach consensus, only to later fail to support the decisions.”
As many know from experience, both of these methods are flawed. “Neither meets the need to quickly make definitive decisions everyone embraces in order to move forward with collective action.”
Many of our Bucket List organizations have said goodbye to traditional methods of decision-making and adopted alternatives, often described as decision-by-consent approaches. The aim of decision-by-consent is to quickly make a decision that is good enough for now. This allows teams to move quickly and to stay flexible. It means decisions can be tested in practice, rapidly. Learning from experience improves decisions as insights occur on-the-job.
During the consent process, teams look at proposals only for reasons not to execute them. And they do it in a radical way. Objections can be raised only by a team-member who is affected by the decision.
Team-members “may only object to a proposal if they feel it will cause harm or move the team back. Having a better idea is not a sufficient reason to object. This is where traditional consensus-based processes often fail.”
It is therefore important to note that this process should not be confused with decision-making by consensus, “which requires each team member be consulted and confirm support in advance of a decision being finalized.”
How does it work?
Both the authors of the book and ourselves have witnessed two different decision-by-consent approaches that work well in practice: the Advice Process and the Integrated Decision-Making Process.
The Advice Process
The Advice Process was coined by Dennis Bakke. He used it to build AES Corporation into a global energy supplier. We described this in a previous blog post. It includes four basic steps:
- Taking initiative - A team-member notices a problem or opportunity and takes the initiative (or alerts someone better placed to do so), making them the initiator.
- Gather input - Prior to a proposal, the initiator may seek input to gather perspectives before proposing action.
- Presenting a proposal - The initiator makes a proposal, and seeks advice from those affected by it, or those with expertise.
- Decision-making and informing - Taking this advice into account, the initiator decides on an action and informs those who have given advice.
In this process the initiator seeks advice from leaders and from peers. Usually, the initiator is the person whose:
- is from the area most affected,
- initiated the idea,
- discovered a problem,
- or saw an opportunity.
If it is unclear who the initiator should be, the leader selects an individual to gather advice and make the final decision.
The Integrated Decision-Making Process
In comparison to the Advice Process, Integrated Decision-Making is more structured. It is a core element of Holacracy and includes six steps (as described in Reinventing Scale-Ups):
- Presenting a proposal - Anyone can start the process by describing a problem and proposing a solution, making them the proposal holder. If not already assigned, someone volunteers to facilitate the decision-making process and removes themselves as an active contributor to the decision.
- Inviting clarifying questions - Anyone can ask the proposal holder clarifying questions. The proposal holder provides an answer to the question or states that an answer has not yet been contemplated. No reactions or dialogue are permitted at this point.
- Initiating a reaction round - One-by-one, each person (except the proposal holder) has an opportunity to react to the proposal as they see fit. No additional discussions are permitted.
- Amending and clarifying - The proposal holder can choose to clarify or amend the proposal based on what was heard in the last two steps. Once again, no discussion is permitted.
- Initiating an objection round - The facilitator invites objections by asking each person in turn, "Do you see any reasons why adopting this proposal would cause harm or move us backwards?" If no objections surface, the proposal is adopted.
- Integrating objections - The goal of this step is to craft a proposal free of valid objections while still addressing the proposer's problem. The proposal owner focuses on each objection, one at a time. Once all objections are integrated into a new proposal, another objection round is completed. This process continues until a solution is adopted."
Try and fail, but don't fail to try
Both processes can seem time consuming at first. But, with practice, they quickly become very efficient ways to unleash decision making across the entire organization.
If you’re ready for it, give one a try and let us know how it went. And remember; it’s OK to try and fail, but don’t fail to try!
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The topic is spot on where there are other alternatives already available since the 90-ies. This is based on the work of Matt & Gail Taylor called "Decision by Design". Groups can work collaboratively on challenges where a process of Scan-Focus-Act is facilitated to find answers in complex and challenging situations. Almost next door companies like GroupMapping and Matter Group provide these guided processes in decision making. This method is called: collaboration engineering especially applicable in a VUCA world
This is a nice shot, clearly showing the flawness of two classical ways of decision-making.
Actually the good-enough-fo-now reflects a permanent iterative process of experimentation, where there is no failure, only trials.
OK for voice given only to those affected, but what about the generations to come? So, see the interest of the so-called 7 generation system applied in Indian communities: any decison is viewed in the perspective of 7 generations to come.
What about the (negative) externalities our economical system is full of, and which are not integrated? This is the interest of giving a voice to non-human 'things' like a river in New Zealand who recently was given a legal right to defend its 'views'.
This creates a space to include the Commons in the conversation;
As part of our collaboration with Haier - one of the world's most pioneering companies - we research and share how they work. Recently, we chatted with leaders of the company, including Zhang Ruimin (CEO of Haier), Kevin Nolan (CEO of GE Appliances - the US part of Haier) and Yannick Fierling (CEO of Haier Europe). In this post, we share the recordings.
Bags and accessories made of truck tarpaulins - that's what Freitag is known for. With headquarters in Zurich, around 250 employees work for the cult label which uses holacratic methods. They introduced a new salary model in early 2019. Pascal Dulex is responsible for Organizational Culture & Creative Direction. He spoke to us about their sometimes-painful path to a new compensation system.