Uncertainty is an inevitable component to decision-making
Most organizations over the past two years have experienced the impact of slow decision-making under uncertain conditions. At the peak of COVID-19, organizations no longer had the luxury of waiting for the right information at the right time; leaders had to quickly break down boundaries and streamline an endless list of small and large decisions that would impact employee safety, workplace culture, and business strategy, often without the ability to foresee the longer-term strategic implications of their choices.
While decisions related to COVID-19 may have highlighted the issue, timeliness has always been a critical component of effective decision-making. Through our work with executives and management teams, we have observed that leaders often approach decision-making in ways that limit operational flexibility for those on the frontlines or force mid-level managers to pick up the slack when the follow-through of a decision has been poorly planned and communicated.
Using McChrystal Group’s Organizational Diagnostic survey, we have been able to collect data from over 50,000 individuals across hundreds of cross-industry teams. An aggregated database of this data has revealed that only 33% of respondents, ranging from the C-suite to frontline contributors, agreed that decisions across their organizations were made in time for effective execution. But slow decision-making doesn’t just create tactical roadblocks, it presents an important strategic challenge for many organizations. Organizations who are slow to make decisions are 17% less likely to be able to adapt their strategy to changes in their environment, as reported by their employees.
Decision-making difficulties are often compounded by a communications deficit. In larger companies especially, leaders are often unaware of the amount of critical information that is lost as it makes its way to the ground level. From our aggregate database, we’ve found that only 47% of employees across teams and industries agreed that they received timely input from the right decision makers necessary to do their job. Without a reliable process for receiving decision information, teams that are further away from leadership lack context and can fail to implement changes in real-time. In many cases, this results in teams making decisions based on outdated guidance.
From our work with a broad range of client organizations, we have observed that the barriers to effective decision-making include a range of causal factors, such as unclear decision ownership, consensus paralysis, and/or a risk-averse culture that fears acting in the face of outstanding ‘unknowns.’ To explore these causal factors in context, let’s explore a real-world example.
Poor decision-making process impacts on larger coordination processes and hinders execution
Over the last year, the oil and gas industry experienced some of the most challenging economic and social circumstances in history due to the onset of a global pandemic, in conjunction with a supply and demand-shock. McChrystal Group partnered with a leading Fortune 100 oil & gas company focused on navigating these complexities by maximizing team effectiveness through improved communication and decision-making. The[CK2] company knew it needed to respond quickly to its rapidly changing operating environment but the company lacked a comprehensive process for leaders to disseminate decisions, limiting access to timely and relevant information at the frontlines.
Our Organizational Diagnostic of the company revealed that only 28% of the organization believed decisions were made in time for effective execution. This was due to the tendency for decisions to be revisited or ineffectively communicated, resulting in inefficient workstreams. Furthermore, only 25% of employees agreed that there was an effective process to solicit input from relevant stakeholders before decisions were made, resulting in unclear ownership and accountability.
When analyzing the impact of slow decisions, we found that employees who experienced delayed decision-making process were five times less likely to have a predictable work rhythm that allowed them to plan how they spend their time. The lack of a forum or channel to disseminate decisions and allow others to ask questions created a hesitancy to execute.
The company lacked two crucial processes: one that would distribute decision-making responsibilities to the most appropriate stakeholders, and one that would communicate the information required for those decisions. This had a significant impact on the company’s ability to react quickly to risks or changes in the environment, hindering the company’s COVID-19 response.
Through our partnership, McChrystal Group was able to operationalize these processes by incorporating a decision space framework that reduced ambiguity and enabled the prioritization of tasks. The company also worked to develop a comprehensive knowledge-sharing platform for communicating the strategy and distributing critical information, which allowed leaders to trust that their team was aligned and empowered to make decisions safely, smartly, and quickly.
McChrystal carried out a second Organizational Diagnostic at the end of our engagement, which showed the impact that greater decision-making clarity had on the company. The decisions that used to get stuck in bottlenecks were pushed down to lower levels, with a 20% increase in employees who agreed decisions are made in time for effective execution. Furthermore, 46% of the company’s employees agreed that there was an effective process to solicit input from relevant stakeholders before decisions are made, up from 24% at the start of engagement. As a result, the company was more readily able to address challenges driven by the COVID-19 crisis, limit uncertainty within the employee base, and create adaptable communication to offset the sudden shift to remote work status.
Tactics for introducing speed and efficacy into the decision-making process
To create the right conditions for timely and inclusive decision-making, leaders should strive to continuously clarify goals and expectations, establish channels for pertinent access to information, and empower those closest to decisions to act as accountable owners. We provide several recommendations to optimize the decision-making environment below:
When questions exist around the decision process – what the cadence is, who is involved, why certain decisions are made - teams become task-driven instead of goal-driven, often operating more commonly in siloes and less effectively cross-departmentally. Clearly defined decision authority at each level of leadership will demonstrate how those below the C-Suite can contribute input on strategies that drive successful outcomes. McChrystal Group employs the use of a Decision Space framework to create boundaries around who is responsible for providing a recommendation on a given decision, and ensure there is always consistent and appropriate cross-functional representation.
To facilitate timely decision-making, leaders must be able to filter the influx of information to only the most pertinent information immediately impacting the organization's mission, objectives, or strategies. Establishing Critical Information Requirements (CIRs) focuses information flow from directs reports by identifying what information is most critical to the leader and defining which decisions need to be reserved for leadership to make. By creating a short-list of time-sensitive data for decision-makers, the process protects subordinates from unknowingly failing to provide information they did not realize was crucial. CIRs will help key decision-makers operationalize the process by providing an accountability structure for elevating decisions or asking for additional support when needed.
In today’s complex and constantly changing environment, leaders must continuously track and refine their decision-making practices to help teams plan, coordinate, and adapt quickly. Without a process for making and communicating timely decisions, leaders run the risk of creating a culture of ambiguity for their employees, thus constraining their ability to respond to strategic changes with agility. With the correct processes in place, decisions will be made with real-time information, inclusive of the right stakeholders, and provide the focus necessary to continue executing against the organization's strategy.