Simply put, decision rights spell out what kind of decisions each individual in an organization is allowed to make. Regardless of the size or complexity of your organization, there are formal or unstated decision rights that seem quite obvious. The CEO can probably agree to things that the summer intern cannot, just as you probably have policies around who can agree to contracts with vendors of various sizes. This becomes tricky when you start to consider strategic decisions that might not have an immediately obvious financial impact but are far more impactful and financially meaningful than how big an order for office supplies various people are allowed to place.
When a decision goes wrong
Consider for a moment your average technology project. You might have gone through a careful and well-considered vendor selection process to chose the right hardware, software, and implementation provider. You probably assembled a team with careful consideration to their skills and background, and then with much fanfare, commenced work towards what seemed like a clear and unambiguous objective.
Once the project launched, dozens of decisions started occurring, generally with far less oversight than the process that got you to the starting line. At the lower levels of the organization, decisions as simple as an HR manager delaying the start of a particular technician, or a team leader focusing his or her team on some nuance of the project that’s not overly critical divert time and energy away from the objectives of the project. At the executive level, a mere utterance from a well-regarded (or feared) executive can be interpreted as a significant redirection of the project, whether that was the intent of the executive or not. In fact, I’ve seen the strategic objectives of a project shifted so dramatically that the project ultimately failed.
Just as these types of decisions can place your projects at risk, so too can indecision. The manager or executive who keeps demanding more data or investigation before action is taken in the name of risk avoidance can actually stretch the timeline of the project to the point where you’re investigating costs more than the risk being avoided. What’s even more challenging is this type of indecision can be masked, intentionally or otherwise, behind high-minded ideas like due diligence, risk aversion, and fiscal prudence.
SEE: Launching and building a startup: A founder’s guide (free PDF) (TechRepublic)
Decision rights made easy
In large and complex organizations, designing appropriate decision rights can be a painstaking and time-consuming process. However, for teams and smaller organizations, starting simple and merely having discussions around who can make what decisions can pay immediate dividends with minimal pain. Try the following simplified steps to get started.
1)Identify decision-makers and referees: There’s no better time than the present to articulate who is allowed to make which decisions. This need not be a draconian process and can be as simple as telling a team lead that if they come across an area that will impact their current task load, or create a similar impact on another team, they need to seek some help from above. Identify specific executives within and outside your team or project who can help resolve and escalate any disputes that arise, and make it clear that these types of disputes are a healthy, normal part of organizational culture and calling them out and calling for backup is healthy behavior, rather than insubordination.
2)Quantify impact: Just as you likely have policies about how much money an individual within the organization can spend without some form of approval, you also need a metric for how much someone can “spend” on a decision without approval. Your metric could be days added to a project timeline, people hours expended based on the decision (or indecision), various financial metrics, or delays to a project.
3)Articulate that a decision (or indecision) is being made: Make sure your team members feel empowered to call out when they feel a decision is being made. I get a sickening feeling when I watch an executive’s idle speculation be diligently noted by team members who run off and spend weeks researching what was never meant to be interpreted as a direct order. Simply stating, “It sounds like you’re recommending we take [detail the action]. My gut tells me this will impact our decision impact metric. Should we go forward with this new plan, expend the effort to research this new direction at the risk of the broader effort, or do a quick effort to understand the effort and reconvene in a couple of days?” This simple conversation will likely be far more appreciated and far more comfortable for the person making the request than misinterpreting an idle comment and redirecting significant resources towards something that was never meant to be a true decision.
While adding the concept of decision rights to already overburdened IT leaders might seem like a bridge too far, a few hours of diligence in this area can save weeks of pain later on.