My father used to tell me that the biggest problem he always
experienced in business was that no one could make a decision. After graduating from The Wharton School at The University of Pennsylvania in 1948, Dad worked in his
career at Bamberger’s Department Store, Creed Taylor Record Label, Triangle Industries, Rowe International and later as a
financial planner with Merrill Lynch. It has taken me many years to understand
the gem of insight and to figure out ways to be an even more effective
marketing leader within the company I work for in North Carolina. I am always thankful I decided to choose Jack as my Dad in 1954 when I came into the world.
Last week I started reading a fascinating book on how the brain
works called Thinking Fast and Slow by Daniel Kahneman that has really started
my wheels turning. In his book, Kahneman describes the two systems in the
brain that drive the way we think- System 1 is fast (intuitive/emotional) and
System 2 is slow (deliberate and logical). The book has me challenging and questioning
how we make decisions and choices. More on this book in a future review but to
learn more, click this link on Amazon.
Since my background and experience bridges both the small, entrepreneurial
world, mid-sized firms and large corporations, I thought I would share some
observations and mention a few things I have learned along my yellow brick
marketing road. As mentioned in an
earlier blog post, I made lots of wonderful, productive mistakes that I think I
have a few useful insights that might help guide you on this tricky terrain.
Who Decides? Decision
making exists to help grease the wheels of day to day activities. There is a
handy little guideline you can use when thinking about these issues called
RACI. It is an acronym that helps you
think about 4 categories within a decision making process.
RACI charts work
great for most lower level decisions or typical projects that don’t involve
huge capital investments or highly strategic activities. You could use this to
help a team make a decision about a change on packaging, use of a new supplier
or instituting a new software program. This guideline helps when the dollars impact isn't major and the strategic importance is modest or small to the business.
But big decisions
are harder to manage and this is what my Dad was alluding to in his comments
that he shared with me many years ago. How can a mid-sized or large firm do a
better job of efficiently and effortlessly make good decisions in a timely
The quick and
simple way to think of this is that the leaders of the company set the
rules. Imagine they are the governing
board and helping you understand the rules of engagement. A sports metaphor makes this clear. The
senior managers have to help everyone else play the game. So, if your
leadership defines how a game is played (like football), you understand how to
score, when penalties occur, how long the game is, what role and responsibilities
the referees have, etc. The rules define where the authority lies for a major strategic decisions. Is it with an individual or a group who collaborate? It is helpful for the associates to be clear where this decision making authority exists so that no one is blind-sided by not including the right individuals in the process. Back to my sports metaphor, the staff is
going to play the game- without setting these rules, chaos reigns and sometimes
decisions are made based on who has the loudest megaphone or power base.
The following are
a few ideas to help you think about these issues:
Start at the Top It always helps
to start at the top. The CEO/President/Owner is going to want to be involved in
the most important decisions. The best advice is spell it out clearly with
examples. So perhaps your leader wants to be the final decision maker if you
have a project that involves X amount of dollars. Perhaps she wants to make decisions that she
deems highly strategic like involving the switch to a new technology platform,
changing a major vendor or even the decision to alter the deal/pricing
structure with a top 10 customer. Define it. Share it. Make it clear. Tell everyone in a simple document what decisions you own. Of course you will consult with many others and you may not execute the decision. But make it clear that you own it and are truly accountable for the final decision.
Your Way Down the Food Chain to VP's Once it is clear
what the CEO deems to be the top issues, then the next level down can do the
same exercise. Perhaps you have a group of VP who has departmental responsibilities.
Define what each person can determine by themselves versus when they need to
collaborate on a decision. Give a handful of clear examples for each person.
What is the VP of Sales decision making authority? When does he get to make the
call versus collaborate with his peers? When does he have to push it up to the
CEO? With just a few examples, it
quickly becomes clear how much authority is empowered in each individual VP versus
them as a collaborative team.
Next Stop - The Directors Next, go down a
level to the Directors or the next band of management. Do exactly the same
exercise as the VP’s. Give a few key examples for each Director when they can
act unilaterally versus with the collaboration of their peers. Generally
speaking, you don’t have to go deeper than this into the organization. In a company
with 1000 employees, often it just takes about 20 senior managers whose
decision making authority needs to be clear to everyone.
Publish a matrix
or chart that illustrates what has been decided. Be transparent and share this
internally so everyone is clear. Most of the major conflicts will be avoided
and decision making authority will be more obvious to all.
I’m glad I
decided to write this post. You can hold me accountable.
Labels: Decision Making, Marketing Moments, RACI Chart