Part One of our discussion about decisions addressed how managers should approach making them. Part Two – this blog – raises some ideas and questions for further consideration about who should be making business decisions: you or someone else.
“Decision” Defined
First things first: What is a decision? It’s defined as “the course of action you intend to take when it isn’t obvious what to do.” This means decisions are only needed when you don’t have the information needed to make the intended action obvious. If all the desired information is available, then the decision would “make itself.”
When you hear, “I made the best decision I could, based upon the information I had,” it’s important to understand that the exact opposite is true. The decision was made not based on what was known, but instead based on what was not known. The absence of information creates the risk in decision‐making.
Embedded here is a basic case for delegation, which most managers don’t do very well. Most managers make decisions they don’t need to make – decisions that could be made better and faster by someone else (someone closer to the situation). That person likely doesn’t have all the information either (if they did, no decision would be needed). But they probably have more information than you do, and more information is better than less. The fewer the unknowns, the less risky the decision – right?
You may argue that some decisions are too important or too risky to delegate, and you’d be right. So here’s how to limit or contain that risk using the three factors that measure it.
Factor No. 1: Cost
A $500 decision is less important (risky) than a $5,000 decision, whether the dollars are gained or lost. When delegating, set the limit. For example, an experienced tech should be able to make a decision with an opportunity cost of a few hundred dollars. A project manager might have a limit of a few thousand dollars. Now you’ve defined the worst that could happen if that person happens to be wrong (and they probably won’t be).
Factor No. 2: People Affected
A decision that affects only one person, one department, or one client is usually less important (risky) than a decision that affects many – or all. You can safely allow an account executive or department manager to decide certain things, as long as they are “fenced in.”
Factor No. 3: Impact on Policy or Precedent
If a single decision hinders on you having to live with it for a long time, sets a precedent for future decisions, violates policy, or is difficult to reverse if you discover that it’s “wrong, then this decision is more important than a simple delegated decision. It isn’t hard to set and teach these criteria.
Allowing others to make decisions – within these boundaries – that affect their work has several benefits. You will:
- Usually get a “good” (correct) decision from a good employee
- Often get a faster decision (since you’re not waiting on you)
- Develop your people to take on greater responsibility
- Foster ownership of the decision by the person who made it
- Free your time for things only you can decide
Try it. You will be pleasantly surprised. Questions? Other viewpoints? Contact us at answers@navigatemc.com. –Brad Malone, Navigate Management Consulting (an NSCA Member Advisory Council member)