5 Decision Making Rules of Thumb, a tool to build decision making muscle in your organisation
Speeding up decision making
Decentralising decision making is a key lever to help organisations dramatically improve their time to market and customer satisfaction. At a recent agile governance panel discussion with the Agile Business Consortium, we shared some tips for fostering good governance and empowering teams to make effective decisions.
The key is to make sure that decisions are being made by teams as if they are the CEO.
What types of decisions should be decentralised?
We recently worked with a client in a highly regulated business to improve the speed and quality of decision making dramatically – achieving a 3x faster time to market. When we looked at the detail, we found that 80% of decisions could effectively be devolved to teams without impacting quality of decision making and improving the overarching control environment.
If you would like to go into more detail on when to centralize decision making, also a great article ‘When to Decentralize Decision Making, and When Not To‘ Herman Vantrappen and Frederic Witz, HBR, December 26,2017
So how can you support teams to build effective decision-making muscle?
One technique that can help teams make effective decisions is to create some simple decision making rules of thumb that teams and individuals can use to help them make decisions with confidence. Over the years we have honed these questions working with different client and have found the following 5 decision making rules of thumb to an effective guide:
Our favourite 5 decision making rules of thumb are:
1. Is it in the best interest of the customer? If yes, crack on
2. Is it safe? Does it pass the front page of the newspaper test? Think safety, ethics, vulnerable customers, compliance…
3. Can your colleagues support it? Think of colleagues in operations, back office. If yes, crack on
4. Does it introduce technical debt or manual workarounds? If yes, consult
5. If it fails, will it bring the whole company / team down with it? If yes, consult.
These 5 decision making questions should of course be tailored to the context of your organisation. They are simply meant as a guide to help teams make decisions with confidence when they are facing decision making. We have found that when making the transition to a more decentralised decision making, leaders need to support their teams to build decision making muscle.