Clarify decision rights

The organization that makes better faster decisions wins. The thousands of decisions that the people in your company make everyday are what determine what your business performance. When you design your organization, you are designing the critical conversations that result in decisions. Most organization frustration occurs when people have to make important decisions together on topics for which there may be more than one right answer. When we are unclear about how to make these decisions, then power dynamics become destructive and personal. Outcomes can feel arbitrary and political. Some of the high-value and high-risk decisions that typically generate the most tension include setting joint goals, forecasting results, allocating resources, pricing, investments, functional policy, and hiring. In an organization with a complex strategy, these decisions must be made with the insights of people sitting in different parts of the organization. The reason we need to bring together multiple perspectives is to make the right strategic trade-offs across often competing objectives. These trade-offs include short-term versus long-term investments, top-line revenue versus bottom-line profit, standardization versus customized solutions, whole company versus business unit results. Here are three best practices for making good decisions with speed. First, be clear on your definition of collaboration. Don't aim for consensus. Consensus means that we all have to agree and that means each person has a veto and can stop the decision. Consensus can suboptimize decision quality in a quest to find alignment and reaching consensus takes a long time. The better goal is structured collaboration. With this approach, we come together with the intent of finding a solution that is better than any one of us could create on our own. We each put forward our perspectives and build on one another's ideas. In contrast to consensus, with structured collaboration, one person is empowered to make the decision. No one else has a veto. This brings us to our second best practice. For each one of our high-value high-risk decisions, one role and the one person in that role is given what we call the golden vote. The golden vote holder is accountable for the quality of the decision. Now, having the golden vote doesn't mean that you make the decision alone. The benefit of structured collaboration is that if the group has surfaced all perspectives and generated and evaluated a range of options, the parties will likely find a quality solution to agree on. But if there's no agreement, the person with the golden vote has the accountability to make a well-informed call. This allows you to ensure all views are considered, but also to move with speed. The golden vote should be used sparingly. Now, the third best practice and the key to making this a reality is to anticipate likely tension areas and design the conversation for each one. I have provided a template and examples for you to use in the downloads. Here are the steps. Identify the tension scenario. Document why it is important for this decision to be informed by multiple perspectives. Name the players in the decision. Who has a stake and a perspective that should be considered? Anticipate the conflicts. Legitimize ahead of time that people will have differences of view. This takes the personal element out of the discussion. Identify the golden vote. After the right people have generated and evaluated options, if there is an agreement, who gets to make the call? When the quality of a high-value decision depends upon trade-offs across equally good options and you need to involve multiple perspectives, design the conversation and use the golden vote for speed.