Keys to Decision Making in a Time of Urgency

In an age of urgency, those capable of taking high quality decision quickly will be rewarded with a massive competitive advantage. But not all decisions are created equal. Different types of decisions require different approaches.

According to a McKinsey Global Survey, in most organizations, decision-making is perceived to take-up a lot of time and much of it is used ineffectively. It outlines how only 20% of respondents believe that their organization is capable of making high quality decisions quickly.

Types of Organizational Decisions

• Big Bets: Infrequent and high-stakes decisions with the potential to shape a company’s future (acquisitions, strategy, budgets) – Usually reserved to C-level executives.

• Cross Company: Broad in scope but more frequent. Smaller, interconnected decisions involving collaboration (pricing, product launch) – Usually involves middle management.

• Delegated: Frequent decisions, narrow in scope, requires limited input from others (hiring, internal procedure) – Usually handled by a single individual or a specific team.

 
Only 30% of individuals are familiar with all three decision types. These individuals are considered to be the most important contributors to making efficient quality decisions. Successful organizations employ a variety of tactics to take quality decisions quickly.
 
Efficient Decision-Making Tactics
 
   1.  Recognize the scope and impact of the decision
The tactic, resources and time to be allocated to the decision making process will depend on how widely the decision will affect the organization, the complexity of the problem statement, and how fundamental of an impact the decision will have (how easily can the decision be reversed?).

    2.  Bring diversity to the decision making process
Reserving Big Bet decisions to the C-level executives exclusively, is a common mistake. Our research indicates that a variety of expertise, skill sets, demographics, personality types, thinking styles and external viewpoints are directly correlated to making the right decisions quickly and getting buy-in from stakeholders.
    
   3. Ensure a high-quality debate
Big Bet decisions require that decision-makers explore assumptions and alternatives beyond the given information. They should actively seek information that would disconfirm initial hypotheses and designate senior executive members to play devil’s advocate and present counter arguments to the group.
  
   4. Structure meetings and process’
For Cross Company decision-making the focus is on process and how to run decision meetings as effectively as possible. Since these types of decisions often involve people in different parts of the organization, the process for how the decision is made, who is involved (and when), and how dialogues and discussions occur is a key success factor. The emphasis is on effective coordination among different stakeholders and focus is on critical issues for the organization.
 
   5. Cultivate a safe decision-making environment  
Successful organizations empower their employees to make Delegated decisions through coaching and providing a space for people to fail safely. The key ingredients for empowerment are giving people a strong sense of ownership and accountability for the decisions in which they are involved.

   6. Foster a bias for action    
Quality and speed are both critical ingredients for decision-making success. However, for decisions where the level of organizational risk is low and can be easily mitigated or decisions reversed, velocity is more important. Enabling the decision-making at the right level where people closest to the decision are empowered to act autonomously yields the best results.
 
One way to achieve both quality and speed, across decision types, is through agile organizational structures. This involves small autonomous and diverse teams that are empowered to make rapid, iterative decisions and that have the required expertise and support.
 
Taking quality decisions quickly can be progressively thought. Start small and grow from there. The level of buy-in is related to trust, empowerment and accountability.  
 
 
[1] McKinsey & Co. (April 2019) Decision-Making in the age of urgency
https://www.mckinsey.com/business-functions/organization/our-insights/decision-making-in-the-age-of-urgency?cid=eml-web
 
[2] Knowledge@Wharton. (September 2019) How a highly diverse team can help untangle complexity.
https://knowledge.wharton.upenn.edu/article/how-a-highly-diverse-team-can-help-untangle-complexity/