Where do you make your business decisions? Presumably, decisions are made by the management team, which can be several in a hierarchical structure.
– Of course, you might say.
I come across the issue in many organisations, and it’s not easy to sort it all out. What does a decision-making process look like? Or as I read this summer, where a group is supposed to define what the “management group process” should look like. They want to make it a standard around this.
Sigh, I say. This is the wrong approach to simplify and resolve the issue. Sorry, there is no “management team process”. The name is not even according to the rules of how a process should be described, i.e. a verb plus a noun. Let me describe it further.
If decisions are made in the management team, then surely all decisions should be made there? Right?
– No, you may think, that’s not possible. All decisions, it doesn’t seem reasonable.
– No, exactly, I say. Not all decisions can be made there. But which ones do and do not need to be taken by the management team? Who will be taken elsewhere, and where is this “elsewhere”?
There is no good answer to this, and the discussion goes round and round. Without landing the question.
This is how I see a successful business doing it.
1. Decisions are made in the processes and projects
We need to understand that we mainly create value in either processes or projects. This also means that it is in our processes and projects that decisions are made. This is quite obvious, because it is these value-creating flows that need decisions to be made on an ongoing basis.
2. If we see the process, we see where the decision needs to be made
Once we know this, we can then, by designing how we want our processes to look, easily identify where in the flow decisions need to be made.
In our projects, different roles are constantly making decisions that affect the project. Some are, for example, in the roles of construction manager, project manager, development manager or test manager. Other decisions are made according to the project model by the project owner, client or sponsor, whatever you call the role. These decisions are the so-called decision points or toll gates in English.
In these processes, decisions are made on an ongoing basis about which way the “case” should go. It’s not something that should have to be raised to any management team. In the process, decisions are also often made on the “case” itself.
It may be an application for a permit, where the process decides whether or not the applicant will be granted a permit.
If there is an investigation into whether a reinvestment should be made, for example, that investigation will produce a decision-making document. Decisions are then made in the process on how to proceed with what has been investigated.
The decision to sign a contract with a customer is made in the process of selling the product or service.
In the process of communication or marketing, the decision to launch the campaigns is made in that very process.
…
There won’t be much left
After designing all the processes and controlling where in the business projects arise, there is not much left to decide in a management team.
– But wait Matts, you might be thinking, the management team makes a lot of decisions of an overall nature in the business.
– Absolutely right, good thinking.
Such decisions also need to be taken. But where do these decisions belong? We return to point 1 above, about value creation taking place in our processes and projects. This means that they belong to the strategic and tactical processes that deal with these cases.
To make it work, you need to create a clear, simple and intuitive business structure. It shows how the whole business is connected in a logical flow. Without it, any designed processes just “hang in the air”, with no clear relationship and meaning in the big picture.
But how you do that and how you avoid falling into the traps that exist around this, that’s a topic for another time. If you are interested, we hold training on the subject. Email me again and I’ll tell you more.
The bottom line is that decisions are made in your processes and projects. Decisions are made there when they are needed. People in senior positions act in the roles that make decisions in these processes and projects.
The pressure to get the management team to make decisions on this or that is then greatly reduced. You have then moved from a hierarchical way of thinking about decision-making, to a fluid way of thinking. It will benefit your business.
With kind regards,
Matts
