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
Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
PUBLISHED ON: Nov. 2, 2020 2:00 pm ET
As used in this document, “Deloitte” means Deloitte Consulting LLP, a subsidiary of Deloitte LLP. Please see www.deloitte.com/us/about for a detailed description of our legal structure. Certain services may not be available to attest clients under the rules and regulations of public accounting.
This publication contains general information only and Deloitte is not, by means of this publication, rendering accounting, business, financial, investment, legal, tax, or other professional advice or services. This publication is not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified professional advisor. Deloitte shall not be responsible for any loss sustained by any person who relies on this publication. Copyright © 2020 Deloitte Development LLC
Some decisions are so simple that you're barely aware you're making them, while others are time consuming, high risk, and can leave you feeling anxious.
Decisions can make or break a project or an entire business. And they often involve complex and unpredictable interpersonal issues, too.
In this article and video, we explore a seven-step approach for improving the quality of your decision making, and for boosting your chances of a successful outcome.
Click here to access a transcript of this video.
A 7-Step Decision-Making Strategy
To avoid making a bad decision, you need to bring a range of decision-making skills together in a logical and ordered process. We recommend the following seven steps:
- Investigate the situation in detail.
- Create a constructive environment.
- Generate good alternatives.
- Explore your options.
- Select the best solution.
- Evaluate your plan.
- Communicate your decision, and take action.
This process will ensure that you make a good decision in a complex situation, but it may be unnecessarily complicated for small or simple decisions. In these cases, jump to Step 5.
If you need to make a quick decision under pressure, see our articles, OODA Loops and The TDODAR Decision Model.
Let's look at each of these steps in detail. Each step features a list of related Mind Tools resources to help you further.
Step 1: Investigate the Situation in Detail
Decisions often fail because key factors are missed or ignored from the outset. So, before you can begin to make a decision, you need to fully understand your situation.
Start by considering the decision in the context of the problem it is intended to address. You need to determine whether the stated problem is the real issue, or just a symptom of something deeper.
Look beyond the obvious. It may be that your objective can be approached in isolation, but it's more likely that there are a number of interrelated factors to consider. Changes made in one department, for example, could have knock-on effects elsewhere, making the change counterproductive.
Step 2: Create a Constructive Environment for Your Decision
Can you give your decision the attention it needs? Spend some time preparing yourself before diving in to the facts and figures.
Remember that most decisions will affect other people too, so it helps to create a constructive environment in which to explore the situation together and gain support.
This is especially true when you have to rely on other people to implement a decision that you're responsible for. You'll need to identify who to include in the process and who will be part of any final decision-making group, which will ideally comprise just five to seven people.
Enable people to contribute to the discussions without any fear of the other participants rejecting them and their ideas. Make sure that everyone recognizes that the objective is to make the best decision possible in the circumstances, without blame.
Step 3: Generate Good Alternatives to Decide Between
The wider the options you explore, the better your final decision is likely to be. Generating a number of different options may seem to make your decision more complicated at first, but the act of coming up with alternatives forces you to dig deeper and to look at the problem from different angles.
This is when it can be helpful to employ a variety of creative thinking techniques. These can help you to step outside your normal patterns of thinking and come up with some truly innovative solutions.
Brainstorming is probably the most popular method of generating ideas, but for more tips on how to examine your situation from new perspectives, and how to organize ideas into manageable themes and groups, see the Mind Tools resources in the box, below.
Step 4: Explore Your Options
When you're satisfied that you have a good selection of realistic alternatives, it's time to evaluate the feasibility, risks and implications of each one.
Almost every decision involves some degree of risk. You'll need a structured approach for assessing threats and evaluating the probability of adverse events occurring – and what they might cost to manage. You'll also want to examine the ethical impact of each option, and how that might sit with your personal and organizational values.
The resources highlighted below offer tried-and-true models to help you.
Step 5: Select the Best Solution
Once you've evaluated the alternatives, the next step is to make your decision!
If you have various criteria to consider, use Decision Matrix Analysis to compare them reliably and rigorously. Or, if you want to determine which ones should carry most weight in your decision, conduct a Paired Comparison Analysis.
If your decision is being made within a group, techniques such as multi-voting and the Modified Borda Count can help your team reach an agreement.
When anonymity is important, decision-makers dislike one another, or there is a tendency for certain individuals to dominate the process, use the Delphi Technique to reach a fair and impartial decision. This uses cycles of anonymous, written discussion and argument, managed by a facilitator. Participants do not meet, and sometimes they don't even know who else is involved.
If you're working with an established team, Hartnett's Consensus-Oriented Decision-Making Model is useful for encouraging everyone to participate in making the decision. Or, if you're working with several different teams, or a particularly large group, assign responsibility for each stage of the decision-making process with Bain's RAPID Framework, so that everyone understands their responsibilities and any potential in-fighting can be avoided.
Step 6: Evaluate Your Plan
After all the effort and hard work you've invested in evaluating and selecting alternatives, it can be tempting to forge ahead at this stage. But now, more than ever, is the time to "sense check" your decision. After all, hindsight is great for identifying why things have gone wrong, but it's far better to prevent mistakes from happening in the first place!
Before you start to implement your decision, take a long, dispassionate look at it to be sure that you have been thorough, and that common errors haven't crept into the process.
Your final decision is only as good as the facts and research you used to make it. Make sure that your information is trustworthy, and that you've done your best not to "cherry pick" data. This will help you avoid confirmation bias, a common psychological bias in decision making.
Discuss your preliminary conclusions with important stakeholders to enable them to spot flaws, make recommendations, and support your conclusions. Listen to your own intuition, too, and quietly and methodically test assumptions and decisions against your own experience. BRAIN BRAN BRAND is a useful tool for this. If you have any doubts, examine them thoroughly to work out what's troubling you.
Use Blindspot Analysis to review whether you've fallen prey to problems like over-confidence, escalating commitment, or groupthink. And consider checking the logical structure of your process with the Ladder of Inference, to make sure that a well-founded and consistent decision emerges at the end.
Step 7: Communicate Your Decision, and Take Action
Once you've made your decision, you need to communicate it to everyone affected by it in an engaging, informative and inspiring way.
Get them involved in implementing the solution by discussing how and why you arrived at your decision. The more information you provide about risks and projected benefits, the more likely people will be to support it.
If people point out a flaw in your process as a result, have the humility to welcome their input and review your plans appropriately – it's much better to do this now, cheaply, than having to do it expensively (and embarrassingly) if your plans have failed.
Systematically combining a range of decision-making tools can help you make highly effective decisions, either individually or as part of a group. The seven-step strategy is:
- Investigate the situation in detail.
- Create a constructive environment.
- Generate good alternatives.
- Explore your options.
- Select the best solution.
- Evaluate your plan.
- Communicate your decision, and take action.
Take our How Good is Your Decision-Making? quiz to find out how well you're doing now!