The ability to make decisions efficiently is an essential success factor for companies, regardless of the industry they are in. The faster a company is able to form shared views and rate ideas, the faster it can react and adapt to changes. As complexity increases, reaching decisions typically requires the input of various experts, which makes the decision making process slower. How to break bottle necks in decision making?
Decision making in companies is becoming more collective than before, and decisions typically require opinions from various experts across the organization. In order to reach a decision quickly, a common view needs to be formed efficiently.
As the number of participants increases, decision making becomes more complex and thus slower. There is more information available than ever to support decisions; it can be acquired more easily and at a lower cost than before. The easy access to information does not mean that people would not play the main role in decision making – on the contrary. If you want people to commit themselves to the decisions, you need to make sure that everyone has truly been able to participate in the decision making process.
How to make decisions both collectively and as efficiently as possible? Forming shared views becomes more efficient by using facilitation methods, by including only relevant people in the decision making process – and by rethinking the whole decision making forum, with the help of digital tools.
1. Split large decision items into smaller, human-sized decision points.
In general, it is easier to reach small decisions than bigger ones. Try to split large decision items into into smaller decision points that you bring to the table one by one, by choosing the suitable facilitation methods in advance. This way, lengthy meetings can be avoided and you will reach the decision sooner.
The step-by-step approach gives you concrete results along the way. You will be able to react to changes faster and see the big picture more easily.
2. Involve only the right people.
Reaching just the right decisions requires that the participants have a shared understanding on the matters – for example pros, cons, consequences, risks, opportunities and so on. If they do not, they will not commit themselves to the decision.
It is far easier to steer a smaller group of people than a bigger one. Make sure to involve only the people needed in each phase – do not invite anybody ”just in case”, not even to virtual meetings.
3. Instead of shared time, find a shared channel.
Often, finding the suitable calendar slot for the meeting takes more time than the decision item itself. Even when the meeting is set, the agenda might need to be reset as someone cancels at the last minute.
During the digital era, collaborative decision making does not need to depend on time or place. Thanks to new tools, busy key people can participate in the decision making no matter where they are located, when it suits them the best.
In our daily work at Sofigate, we use an online service called Roundtable that brings together the best sides of facilitation methods and social media. It requires from the decision makers only a daily engagement of 15 minutes, whenever they have the time.
Time and place-independent online tools make collaborative decision making more efficient and also bring down the costs, as potential travel expenses decrease.
However, professional facilitation, management skills and promoting trust can not be replaced by any tools. When the working environment feels safe, people are willing to share their expertise collectively and are more likely to reach good decisions – no matter what the decision forum is.
Why certain organizations seem to master digital transformation lightyears faster than others? Over the last few years I've seen the whole range of digital development from different industries ranging from enormous leaps into complete stagnation. Reasons behind differ for sure, but there are still similarities to be recognized. One of them is to be closely related to the industry where the organization is operating. It seems that the more regulated the industry, the slower the digital transformation.
In practice, if a company is operating in an industry with much regulations, directives and control requiring a lot of reporting, inspections and insurance, the so-called culture of caution evolves easily. And as it does, the majority of time is spent on creating reports or other evidence to prove, that one can be absolute sure no mistakes have been done. With the core business that isn't a major problem - since that's what required for operating in the industry, right? But as employees are often involved in projects related to both core business and other functions, the same culture quickly affects all parts of the organization - including IT and digital development.
I've found real life Finnish examples from industries like insurances, transportation, medicals and pharmaceuticals. Obviously regulations as such are not to blame - we wouldn't want to have our pension funds invested recklessly. However, as the same practices reach the parts of the organization that wouldn't necessarily need it, the speed of development decreases at the same pace as the amount of pages in procedures, manuals and reports increases.
Recently BCG listed industries that are at different stages in adopting digital technology. According to their study, heavily regulated industries like energy and health care seem to progress rather slowly globally as well.
How to keep the culture of caution out of the operations where it's not needed?
Obviously neither IT nor other digital development can't work without any rules or guidelines at all - especially in large organizations. A clear decision-making framework is an essential for defining which decisions can be done independently and by whom. That lowers the need for unnecessary double or triple checking. While planning an Operating Model for IT and digital development, one should take carefully into consideration, which operations need to be managed by the book, and which can allow more room for experiments, creativity, agility - and therefore innovation.
"Who owns digitalization at our company" is becoming a common question among executives and managers while the focus of digitalization is slowly shifting from what to how. To accelerate digital transformation, Chief Digital Officers (CDO) are joining management teams to focus on customer dialogue, digital content and customer experience. Still, often the total ownership of digitalization seems to be missing - which actually slows the development down instead of accelerating it.
Especially in large companies at least three functions are involved in developing new digital services. The R&D is in charge of research and development while IT ensures that the new solutions fit to other solutions and systems.
Business is often the source of the actual need and on the other hand the end user as well as responsible for generating profit with the new solutions. Often the stakeholders have a clear view of their own responsibility, but no one is in charge of the big picture. In addition the deep understanding of customer experience and customer dialogue are missing.
To add the customer point of view and to speed up digitalization, CDO's have joined various companies lately. How does that affect the ownership? That depends on the role of the CDO.
In case the CDO becomes another stakeholder next to IT, R&D and the Business, the company surely gets the required capabilities to support digital service development. But the total ownership of digitalization is still not solved.
Another position for the CDO is in the center of the development. With proper mandate from the top management the position can be ideal for digital development. On the other hand if ownership is not clear, the CDO becomes a coordinator or a facilitator without true possibilities to affect the development. And in worst case (s)he won't even have enough time to bring the digital insight to the table.
Obviously the CDO as such is not necessary in every company and it's not required for the CDO to take the ownership of digitalization - other stakeholders can take the same position. Who ever takes the ownership should have (1) the required skills, (2) enough time to truly push digitalization forward and (3) proper mandate from the top management.