Part of the Spotlight on TRAIIN series.
So, there you are.
After countless strategy sessions, setting up your AI-enhanced operating model and assigning influential stakeholders to their roles.
You’re ready. Ready to finally get your hands dirty and to kick off the transformation towards your big, hairy, audacious vision.
But immediately everything screeches to a halt, just as you finally were able to kick off the whole thing.
You wonder what happened? You got entangled in an argument over an operational decision in an alignment meeting. This led to a decision meeting with all relevant stakeholders that took forever to schedule. And eventually, its final decision was later again overruled in a SteerCo meeting by strategic management.
Welcome to corporate decision-making.
Decisions are the bottleneck of transformation
“Strategy is deciding what not to do.” – Steve Jobs
He was as right as one could be. Good strategy, and even more, its successful execution is the direct result of excellent decision making within an organization.
But far too often decisions are slow, unclear, or avoided altogether.
But what does excellent decision making actually look like?
This article will equip you with a three-layer model, optimize your organizations decision-making capabilities with four design principles and give actionable cues to exercise your personal decision-making muscle as a leader for timely and high-quality decisions.
Decision-making is a team sport (Layer 1, Decision Making System)
Don’t get me wrong. It’s healthy if strategic decisions arising from operational topics are escalated in SteerCos to strategic management. What is not healthy is when decisions are always escalated to a decision-making superhero.
But wait, concentrating decision-power on few decision makers gives management full agency, and therefore ultimate control on the outcomes of a transformation. Doesn’t this sound effective?
Even if this feels tempting, it is a slippery slope, leading to issues down the line.
Heroic decision-makers don’t scale.
When concentrating decision power, top management becomes a bottle neck for decisions. It puts the brakes on the company’s strategic development, because it forces top-management – whose core responsibility is to orchestrate the bigger picture – to continuously switch between operational and strategic topics. It does not only consume time that could have been spent on strategic decisions, but even worse, causes “switching costs” and decision fatigue, proven to reduces overall decision quality. (Source)
Additionally, there are negative effects outside of the management board: Heroic decision-making fosters a culture of “not deciding” and deteriorates ownership, buy-in and agency in operational layers. This can be experienced in several symptoms within the team:
- Meetings become discussion clubs.
- Everyone is “aligned” – but nothing moves.
- Decisions get passed around like a hot potato.
Does this sound familiar?
Decision-Making needs a systemic approach: 4 design principles
Decision-making is not an individual skill.
It’s an organizational capability.
To develop this capability, it is crucial to build a system that puts the decision-logic in operation. This must be embedded in the existing operating model and reflect four design principles, that ensure decisions are made…
- …transparent.
Decisions are visible. Ownership, inputs, and outcomes are clear to everyone involved with no hidden agendas.
If decisions are not visible, they will be challenged repeatedly. - …understandable.
Decisions can be explained. The logic behind them is clear and structured.
People don’t just see the outcome, but understand the “why”.
If a decision cannot be explained, it will not be executed. - …repeatable.
Decisions don’t depend on individuals. The organization develops consistency in how it decides, so similar situations, follow similar logic, leading to similar results.
If decisions depend on individuals, they will not scale. - …consistently improved.
Decision-making gets better over time, as outcomes are reviewed and the system is refined based on the results.
If decision logic is not repeatable, every situation becomes a new debate.
The ideal setup can differ from organization to organization. You can find a proven model in this article Spotlight On: Collaboration
Concluding on a decision (Layer 2, Decisiveness)
The decision-making process provides the frame, in which individual leaders can contribute. Still, the individual capabilities matter – a lot.
Whereas decision-making describes the process of collecting, evaluating and concluding the available options, decisiveness is the timely, confident action-taking required to commit and execute on a single option.
Decisiveness is the opposite of decision-paralysis
Decisiveness is a lot of “filling in the blanks”, because often not all or ambiguous information, is available when a decision must be made. It is the human factor in decision-making, because it takes courage, in-linear thinking, abstracting knowledge from previous unrelated experiences, and willingness to execution at the same time.
But this implies one thing, that there is a possibility of being wrong.
Put bluntly: We optimize our decision‑making to consistently make the right choices.
All the data driven decision-making, first-principle thinking and scenario-planning implies the desire to optimize to be less wrong, and more right. And that is a noble goal. But eventually we operate in an environment that is becoming increasingly complex and in-comprehensible.
Decision accounting: Cost of Error vs. Cost of Delay
Transformations are uncertain by design. Here is a helpful perspective to navigate decision-making in ambiguous and uncomprehensible situations.
Every decision comes with two types of costs. The cost of being wrong and the cost of being slow. Both are due at all times. Most organizations are wired to avoid wrong decisions. They analyze, align and escalate to make the “perfect” decision.
But in doing so, they introduce something, such as costly: Delay.
While everyone is busy minimizing the risk of being wrong, time passes, opportunities close, and momentum is lost. This stalls transformation.
The irony is, that in many cases, a slightly wrong decision made quickly creates more value than the perfect decision made too late. Very view decisions are irreversible, or at least, can be made in a way, that they can be course corrected after their execution.
Take the launch of an online service chatbot of a retailer for example, they theoretically could fire all their service staff and launch their chatbot, all at once, with a big bang approach. Or, more pragmatic, launch the chatbot as an additional service offering and refining it iteration by iteration, slowly reskilling service reps, to act as second level support, or offer value adding services to their clients.
If a decision is reversable or at least adjustable after their execution, account for the cost of delay, similarly as the cost of making a “wrong” decision.
The best decision is worthless if it’s executed poorly (Layer 3, execution)
Congratulation! A decision was made.
But nothing happens. Or inversely, a strategic decision is challenged or even re-interpreted, hence diluted, by middle management as it cascades into the organization. Politics and different interests of stakeholders collide and influence its result.
Silent disagreement is the biggest enemy of execution.
Every strategic decision must translate into a chain of smaller decisions on operational level. Commitment on all levels is key for effective decision execution. Without it, decisions don’t cascade.
But commitment is often misunderstood. In many organizations, alignment is pursued in the form of agreement. Stakeholders align on outcomes, responsibilities, and timelines. Decisions are documented and communicated.
Yet, execution still breaks down.
The reason is that disagreement does not disappear simply because it is not voiced. What is not challenged openly will be resisted silently.
This is a critical dynamic in decision-making. If disagreement is not surfaced during the decision process, it will reappear during execution. This could be hesitation, reinterpretation, or deviation from the original solution. As a result, each organizational level effectively becomes a new decision point, slowing down or even blocking execution.
Once a decision is made, however, it must be carried forward consistently.
Because only decisions that are truly committed to will cascade. And only decisions that cascade will reach execution.
Make decisions that survive contact with the organization.
If decision making happens transparent, understandable, and repeatable, you are off to a good start. But reality shows that consensus cannot always be reached in all stakeholders. Genuine commitment depends therefore strongly on the ability for stakeholders to disagree with its outcome but commit to and support the decision.
This concept is widely known as “disagree and commit”. It requires that stakeholders are given the space to challenge a decision, understand its trade-offs, and make their perspectives visible.
Once a decision is made, however, it must be carried forward consistently. If stakeholders raised a concern yet were not able to swing the decision with their argument, they are expected to commit to its outcome. This concept is attributed to Andrew Grove, the former CEO of Intel.
It sounds simple, but its execution all but trivial.
It’s typical blocker is missing understanding of trade-offs. That is because alignment is usually uniquely focused on the “outcome” side. What shall be achieved. How it shall be achieved. Who is responsible.
But never on the resulting trade-offs.
The options that were left on the table. The side effects of the short-term focus on the long term progress, of speed and quality etc.
Or, closing the loop to our initial Stefe Jobs quote, “What you decide not to do”.
Make them visible by stating them clearly. One by one.
Because these are our typical discussion points when cascading decisions through operational layers: Why didn’t we chose to do this instead?
To enable stakeholders to commit, whilst disagreeing with the decision, you need to create this transparency. Whilst it is not a guarantee for general commitment, missing transparency is a sure way for lack of commitment.
For smooth cascading of decisions from strategy to execution use the following sequence:
Collect and clarify trade-offs during your decision process. Involve your operation al leaders, responsible for cascading the decision afterwards in order to cover existing blind spots. Cut corners in this step and you will lose decision quality.
Then commit. Then cascade.
If you want to learn more about decision-making in transformations discover five mechanisms that build alignment in our article: Stop Chasing ‘Buy‑In’.
Final Thought
If it’s not yet documented, sketch out how decision-making is performed in your organization.
Is it transparent? Is it understandable? Is it repeatable? How does it improve over time?
And most importantly: Does it build commitment?
Because transformation relies on how decisions are formed, how they are committed and how they are executed.
Describe – but more importantly – fix that system. Then decisions will stop being the bottleneck and start becoming the driver of transformation.
Because decisions don’t create value. Executed decisions do.
