The decision-making process is the driving force behind every organisation. But role-holders, making decisions for tasks, which are not appropriate for their position, can put the organisation at great risk. Chris Legge and Mike Thackray explore how you can ensure decisions are made at the correct level

We make them every day. Some occur subconsciously, others are complex and require detailed analysis, but regardless of how they are made, our decisions can have a huge impact on our own working and private lives and those of others. Take for instance the ‘lollypop man’ – not the one that helps children across the road, but the one that guides the Formula One car into its pit.  Armed with just a long stop/first gear sign, his decision-making is vital. For approximately 7 to 8 seconds he controls the destiny of the car, driver and the team. Others refuel and change tyres, but he decides when to release the car – the importance and consequence of such a decision was vividly illustrated in the 2008 Singapore Grand Prix where one team replaced their lollypop man with a traffic light system.  The technology released the car too soon resulting in a ripped fuelling hose, injured mechanics and put them at a significant disadvantage in comparison to the other racing teams. Effective decisions make all the difference.

The decision-making process is the driving force behind an organisation and therefore must be controlled and coordinated. ER Consultants’ experience with clients suggests there is an increasing danger of role-holders acquiring or assuming decision making for tasks and activities that are not appropriate for their position.

'Collecting’ decisions
The accumulation of decisions can be down to a number of different reasons. It may be that a reduction in layers of management has led to activities being reassigned to remaining managers, or employees assuming that the ‘volume’ of decisions reflects importance and the potential for increased monetary reward. There is also a tendency for decisions to migrate upwards when organisations are under pressure, or perhaps when the role-holder feels that the person reporting into them is not making the ‘right’ decisions. A typical example of this can be found in any number of high street stores when trying to obtain a refund or exchange. You will often be greeted with the line “I’ll have to get my manager for that,” presumably because at some point it was decided that those people on the front line were not making the ‘right’ refund decisions, and the easiest and quickest fix was to shift the responsibility upwards.

The consequences of this are two-fold. Firstly, by taking on additional low-level decisions, the senior role-holders find themselves overburdened with decisions that really should be taken at a lower level within the organisation, and therefore have less time and resource for other decisions that will have even wider ranging impact. Secondly, those people at the lower levels of the organisation find themselves unable to take control of decisions that should be theirs, which can create further problems.

The knock-on effect
As well as impacting on the more senior role-holder, the upward drift in decision making also impacts on those at the lower grades within an organisation. The apparently small and less wide reaching decisions such as the power to give a refund, can provide variety to roles that may have very little scope for decision making, as well as providing on-the-job development opportunities and experience essential to their upwards progression.

We cannot talk of ‘empowerment’ and the importance of ensuring people feel valued in their roles whilst at the same time have all decisions vetted, signed off, triple checked and verbally ‘run by’ senior management. In the desire to ensure that the right decisions are made (a questionable outcome in our experience) the damage done to the morale, motivation and development of others is often the unintended side effect, not to mention the added pressure and time required of the more senior managers who are busy acquiring these extra decision-making responsibilities.

De-cluttering roles
To ensure that decisions are made at the correct level and role-holders made accountable for decisions that they should be able to make, according to experience, grade and salary, a specific tool has been developed to help refine and re-focus decision-making activity.  The Decision Band Methodology (DBM) used by ER Consultants provides an effective, often client-led solution (see diagram below). The analysis and outcome can be understood and adopted quickly, without undermining or undervaluing roles within the business. In fact, in our experience, implementing the changes usually results in role-holders becoming more empowered and achieving increased clarity around the key and important tasks for which they are employed. Additional benefits include better or reinforced alignment with performance objectives and performance contracts leading to improved opportunities for performance related pay, bonus, or merit awards. Improved clarity of roles also reduces duplication of effort, decision cycle times and subsequently the decisions themselves.

If we accept that planned or proactive maintenance is a key undertaking in a manufacturing environment in order to maintain productivity, then a similar action should be applied to role activities. Not only will regular ‘spring cleaning’ of the decision-making authorities within an organisation ensure that roles are well designed, and the incumbents likely to be able to operate at a consistent level – it is also vital for ensuring that people feel motivated, empowered and are able to develop fully in their roles. How effective is your decision making and that of your colleagues?  Do the ‘catalogue’ of tasks you undertake suitably reflect your position within the organisation or burden you with time-consuming activity, forcing you to make pressured, rather that considered, decisions, that can ultimately put your organisation at a huge disadvantage? Then perhaps it’s time to re-evaluate your role.

Case Study
The Problem:
As part of a former public sector agency, this spin-off technology company had successfully sought capital funding and was developing and establishing itself as the leading player in the world.  Along with this success, it expanded and sought to recruit more professional and managerial staff.  As a consequence, the organisation increased the hierarchy in order to provide more promotion opportunities for employees. However, it became obvious to the executive team that the organisation’s ability to adapt was now far slower in responding to the market as decision cycles involved far too many layers of management. As part of a wider organisational review, ER Consultants were asked to assess the effectiveness of decision making across the management, review and improve the existing decision-making process within managerial and executive levels and to simplify the senior organisational hierarchy.

The Process:
To understand and establish the decision-making accountabilities across the managerial and ‘expert’ population, employees provided details of their most important or critical tasks. Using the Decision Band Method (DBM), the key tasks were analysed against the DBM framework to assess both the highest level and the frequency of decision-making and advice giving. In addition, each role holder provided details of the key interactions (i.e. responsibilities, accountabilities, communication and interaction) with other incumbents in order that the duplicity of activity could be addressed.

The Results:
Our assessment of the DBM results observed that whilst role and task complexity was relevant for the roles, the effectiveness and value to the business, along with speed of the decisions expected could be significantly improved. Whilst senior level roles were predominately operating at the ‘policy, planning and programming’ levels within the DBM framework, those in senior roles were being burdened with decisions that should be made by those in lower levels. This meant they were being taken away from more strategic matters/decisions instead. And as a result, the organisation was slower to respond to economic changes.

We also found that decisions were ‘collected’ in an attempt to justify additional financial rewards and benefits along with a perceived expectation that ‘volume’ of decision activity, irrespective of the quality would influence future promotion opportunities. As a direct result of the DBM analysis, the senior structure has been reduced from eight to three levels and the responsiveness and higher quality and quicker decision-making is supporting the organisation through challenging times in the market place.

Decision Level Audits:
Making the right decision
ER Consultant’s Decision Band Methodology (DBM) provides sound principles upon which to assess role holder’s decision-making capability and the impact on the ‘bottom line’. Using a focused and objective assessment of the levels of role responsibility, decision-making gaps, duplication and indecision can be avoided. As a consequence, role activity can be focused on ensuring measurable deliverables, more quickly and effectively.

Chris Legge
Chris.Legge@erconsultants.co.uk

Mike Thackray
Mike.Thackray@erconsultants.co.uk