Monday, March 26, 2018

7 Levels Of Decision Making To Match Business Needs

management-decision-makingNothing happens in business until someone makes a decision. These days, with the market moving at warp speeds, the timeliness of decision making is also critical. What might have been the right decision yesterday, may be the wrong decision tomorrow. Yet one of the most common complaints I hear as an advisor to businesses is that the decision process is arbitrary or broken.

The challenge is that everyone, including the experts, seem to have a different view of the right decision process, and when it should be used. To put this into perspective, I found a good summary of the different levels of delegation and enablement in a recent book, “Effective People Management,” by Pat Wellington, who is an experienced international executive and consultant.

She suggests that the level of decision delegation should be commensurate with the experience and knowledge level of both the manager and the team involved in working the issue. If the team is very experienced, the manager should delegate more and move up higher on the following numerical scale for optimum decision effectiveness and speed:

  1. Manager decides and announces the decision (tells). The manager at this level reviews options in terms of objectives, priorities, timescale, and then autocratically decides on an action and informs the team of the decision. This approach will likely de-motivate experienced teams, but may be required when time is of the essence.

  2. Manager decides and then communicates to others (sells). At this level, the manager makes the decision, but then explains the reasons and the positive benefits accruing to the team, the company, and customers. The decision then becomes part of the team learning process, and confidence in the manager increases rather than decreases.

  3. Manager presents the decision and invites comments. The manager presents the decision along with the background. Team members are invited to ask questions and discuss the rationale. This more participative and engaging approach enables the team to appreciate the issues and implications of all options. This approach improves satisfaction.

  4. Manager “suggests” a decision and invites discussion. The manager discusses and reviews a provisional decision on the basis that the manager will evaluate their views before making the final decision. Thus, team members have some real influence over the final decision, and recognize a real contribution and appreciation of the team.

  5. Manager presents the situation for input and joint decision. With this approach, the manager presents the options to the team. Team members are encouraged and expected to offer ideas and additional options, and discuss implications of various options. Being high-involvement and high-influence is highly motivating to every team.

  6. Manager explains the situation and asks the team to decide. At this level, the manager will effectively delegate responsibility for the decision to the team, perhaps with stated limits. The manager may or may not choose to be a part of the team that decides. This approach requires a mature team, and major responsibility acceptance by the team.

  7. Manager asks the team to define the problem and also decide. With this approach, team members identify and analyze the situation, develop resolution options, and then decide on a preferred course of action. The manager agrees to support the decision and manage implementation. This puts the team at the strategic decision-making level.

In my experience, successful first-time entrepreneurs and startups operate nearer the top of this list, while larger and more mature organizations that run effectively operate nearer the bottom of the list of approaches. If I see the opposite, I often find a dysfunctional business, or at least one which may not be agile enough to compete in today’s marketplace.

What this means to you is that you must pick your role and your company, based on your own motivations and expectations. It also means that you must be prepared to change and adapt as the organization evolves. Are you at the right place in the right organization to be effective, satisfied, and motivated to make the decisions that need to be made?

Marty Zwilling

*** First published on Inc.com on 03/13/2018 ***

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