How Effective Decision-Making is Key to Unlocking Your Transformation
Peter Drucker famously made the distinction between efficiency - ‘doing things right’ - and effectiveness - ‘doing the right things’. Effective decision-making is therefore a way in which organisations can reach the right decisions.
But why does this matter?
The exponential change in digital transformation shows no sign of relenting, with all organisations needing to adapt to the demands of a digital world or risk being left behind.
You could be in the early stages of your transformation journey and still trying to work out what that means for you and your organisation. Or perhaps you have been on the journey for a while but have not made the progress you hoped for. In either case, effective decision-making is the key to unlocking your transformation.
Decision-making is the lifeblood of any successful digital transformation. It is what leads you to focus on what is important and execute with confidence. It should not be at the whim of an autocratic leader far removed from the realities on the ground but rather an empowering state of mind that everyone has bought into.
This takes hard work and the acceptance that there will be failures along the way. It is going to take time for your teams to get on board with this new way of thinking, but if you are serious about ‘getting stuff done’, it is absolutely worth it.
So, how can you go about making effective decisions? We believe there are a few key things to bear in mind.
5 Top Tips
Whilst there are many facets to transformation, one of the most critical is how effective your decision-making is. Decision-making is the key to unlocking your transformation – it is that simple. If you can get this right, then the journey becomes smoother. But if you get it wrong, not only will you struggle to move forward but you may find yourself standing still or worse, slipping backwards.
Here are our top five tips to get you started:
Tip #1 - Don’t let the decision in your head be bigger than the one in reality
Too often, we fear making the ‘wrong’ decision. We build up the consequences in our minds which leads to hesitation and a lack of action. Instead, challenge yourself, and your teams, to consider the reality of that decision.
Jeff Bezo wrote, “some decisions are consequential and irreversible or nearly irreversible -- one-way doors --and these decisions must be made methodically, carefully, slowly, with great deliberation and consultation. If you walk through and don't like what you see on the other side, you can't get back to where you were before. But most decisions aren't like that -- they are changeable, reversible – they are two-way doors. If you have made a suboptimal Type 2 decision, you don't have to live with the consequences for that long. You can reopen the door and go back through.”
So ask yourself - is this really a ‘one-way door’ decision? An approach, such as this, will allow you to keep the pace of your transformation whilst focusing time and energy on the bigger decisions.
Tip #2 Understand who needs to make the decisions and empower them!
First identify ‘who’ is best placed to make, or inform, these decisions. The focus can naturally drift towards today’s senior executives or budget holders however, taking the time to reflect on those who will be affected by this decision is critical. Ask early on, who will be responsible for implementing this decision? Who will be interacting with the product or service day-to-day? Who will be looking after this once the change is implemented? The answers to these questions will help inform who needs to be involved.
The second step is then to empower. There is no one-size-fits-all approach here but calling out the individuals as ‘decision-makers’ is the first step. Ensure that everyone knows what is expected of them and how they can contribute, as well as who should sign off on the different stages in the process. This will help you to avoid bottlenecks or delays that lead to frustration, and instead empower your teams to make decisions quickly without needing approval from above.
Tip #3 Understand what makes your decision-makers comfortable
Every decision-maker is different, and it is important to understand what makes them comfortable. For example, some people prefer data-driven decisions, whilst others may be more influenced by their gut instinct or intuition. Senior executives can be heavily influenced by protecting and expanding revenue-streams whereas operational leaders can be driven by reducing risks. You also need to consider the cultural context of your organisation. What works in one company may not work in another.
The best way to familiarise yourself with what works is by talking, listening and asking questions. This process is all about building trust - so be open and transparent when you are working with your teams and don’t be afraid to ask stakeholders directly what makes them comfortable.
Tip #4 Remember: Decision making changes over time; it will evolve as the project evolves
Whether you are using data or a roundtable discussion to make a decision, you need to be prepared to adapt your approach, framework and mindset towards decision-making over the course of your transformation.
What is important is that you are open and honest about this with your teams. Everyone needs to be aware of what is going on so that they can make any necessary adjustments accordingly. You must also ensure that you remain flexible and adaptable in your approach to decision-making so that it is always fit for purpose.
Decision making is not a one-time event - instead, it needs to be adaptable if you want to drive value around what matters most right now.
Tip #5 The worst decision you can make is not making one at all…
When decision making is done right, empowered teams produce at pace, feel more confident, and deliver great work. On the other hand, when not done effectively, teams become afraid of making decisions, delay the answer, or try to decide by committee - which can create frustration and a lack of action.
Whilst this may put some off making a decision altogether, it is important to remember that the worst decision a person can make is not to make one at all. There can often be a risk-averse human reaction that sneaks in which manifests itself in either an urge to collect more and more information or to use an external event as an excuse to delay the decision. All this will only slow down your digital transformation and increase the risk of failure over the longer term.
Another quote from Bezos; “If you can decide with analysis, you should do so. But it turns out in life that your most important decisions are always made with instinct and intuition, taste, heart.”
Whilst data and analysis are important, they should never be the only factors influencing our decisions. Instead, we need to trust our gut instinct, as well as our experience, knowledge, and reality, in order to make the right choices and avoid ‘analysis-paralysis’.
So, take a step back, assess the situation, gather the data and insights you need, and then make a decision that you feel confident with. It is not always easy, but the alternative is much worse.
Final Thoughts
In conclusion, if you want to unlock your digital transformation, effective decision making is essential. Accept that there is no perfect process, and that this will evolve over time but the best thing you can do is embrace decision-making.
If you would like to understand more about accelerating your digital transformation, please contact us.
