Deciding how to decide: Deciding how to decide: The added ...
Decide & Deliver
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Transcript of Decide & Deliver
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Decide & DeliverKNOW YOUR DECISION EFFECTIVENESS
2Five steps to improve decision effectiveness
01
Assess decision effectiveness and organizational health
02
Identify the critical decisions
03
Set up individual decisions for success
04
Align organization to support decisions
05 Embed decision capabilities and sustain results
3What is Decision EffectivenessDecision Score
Quality
Speed
Yield
Effort
Decision = Performance
Quality, Speed and Yield reinforce one
another
Effort is a dragThere are few trade-
offs
Remember
There is always room for improvement
4Where are the decision barriers
Structural sclerosis
Decision ambiguity
Process paralysis
Data dysfunction
Misaligned measures
Blurred vision
Consensus overdose
Talent deficiency
Behavior breakdown
Performance anemia
5How to tackle Organization decision challenge
Decision Score Card
• It will tell how well or poorly you’re doing on decisions. It includes assessment of all the elements of decision effectiveness (decision quality, speed, yield)
Organizational Score cards
• It shows the element of the organization that may be hindering people making decisions quickly and implementing them effectively
6The Decision scorecard “quick test”
When making critical decisions, we choose the right course of action:4 - > 75% of the time3 – 51 – 75% of the time2 – 26 – 50 % of the time1 - <= 25% of the time
1 2 3 4Quality - Q
We make critical decisions:4 – Much faster than competitors3 – Somewhat faster than competitors2 – Somewhat slower than competitors1 - Much slower than competitors
Speed - S
We execute critical decisions as intended:4 - > 75% of the time3 – 51 – 75% of the time2 – 26 – 50 % of the time1 - <= 25% of the time
Yield - Y
In making and executing critical decisions:4 – We put in exactly right kind of effort3 – We put in some what too much/ too little vs. amount we should2 – We put in way too much/ nowhere near effort vs. amount we should1 – We are off the charts
Effort - E
> 25 = Top quartile – You’re doing great, keep it up21-25 = Second quartile – Pretty good, but could be great16-20 = Third quartile – Worse than 50% of companies, time to ACT!15 or less = Bottom quartile – Major decision reboot required!
Total Score[ Q * S * Y * (E/4)] _ _ _ _ _ _ _ _
1 2 3 4
1 2 3 4
1 2 3 4
Instruction Read each question and check the score
that corresponds to the answer that bests fits your organization
To get your total score, multiply the first 3 scores together, Then multiply that result by the Effort score divided by 4
For example, if you circle 3,4,2,3, you would calculate your total as 3*4*2*[3/4] = 18
Copyright 2010 Bain % Company, Inc. No rights reserved
7Decision scorecard ”read out” example
Quality - Q
Speed - S
Yield - Y
Effort - E
Low- quality decisions
Decision speed slower than competitors’
Poor execution of decisions
Too much / too little effort
High- quality decisions
Decision speed faster than competitors’
Strong execution of decisions
Exactly right amount of effort
1 2 3 4
Top quartile
> 25
Second quartile
21-25
Third quartile
16-20
Bottom quartile
15 or less
Total score versus
benchmark
Total Score (decisions)
Multiply Q * S * Y * E/4 = 18
8Organization scorecard “quick test”
Structure
Roles
Processes
Information
Measures and incentives
Decision style
People
Behavior
Culture
Our structure helps, rather than hinders, the decision most critical to our success
Individuals are clear on their roles and accountabilities in our most critical decisions
Our processes are designed to produce effective, timely decisions & action
The people in critical decision roles have the information they need when & how they need
Our measures and incentives focus people on making and executing effective decisions
We make decision in style that is effective ; e.g. a style that appropriately balances inclusiveness with momentum
We put our best people in the jobs where they can have the biggest decisions impact
Our leaders at all levels consistently demonstrate effective decisions behaviors
Our culture reinforce prompt, effective decisions and action throughput the organization
1 2 3 4
1 2 3 4
1 2 3 4
1 2 3 4
1 2 3 4
1 2 3 4
1 2 3 4
1 2 3 4
1 2 3 4
Instruction Read each question and
check the score that matches your level of agreement/disagreement with the statement
1= Strongly disagree , 2= Disagree more than agree , 3= Agree more than disagree, 4= Strongly agree
To get your total score, add up your individual score
> 35 = Top quartile – You’re doing great, keep it up21-35 = Second quartile – Good but room for improvement16-20 = Third quartile – Organization is serious barrier to decisions15 or less = Fourth quartile – Major organization transformation required
Total Score[Add all scores] _ _ _ _ _ _ _ _ (Min = 10, Max = 40)
Copyright 2010 Bain % Company, Inc. No rights reserved
9Organization score card ”read-out” example
StructureStructural sclerosis
Blurred vision
1 2 3 4
Top quartile
> 35
Second quartile
31-35
Third quartile
26-30
Bottom quartile
10 - 25
Total score versus
benchmark
Total Score (organization)
Add all scores = 27
Decision ambiguity
ProcessParalysis
Roles
Processes
Information
Data dysfunction
Measure & incentives
Misaligned measures
Priorities
Decision style
Consensus overdose
People Talent deficiency
BehaviorsBehavior breakdown
Culture Performance anemia
Structural alignment
Decision role clarity
Productive processes
Effective information
Measures that matter
Clear vision
Effective decision style
Well deployed talent
Role model Behavior
Performance passion
10Why some decisions need more management attention?
Complexity
• Decision involving many stakeholders or complex processes with multiple hands-off may require a lot of attention and effort to get right
Degree of change
• If a decision is likely to be affected by a proposed change, such as a new organizational structure, those involved will need to know how it is supposed to work in the future
Scope for improvement
• A decision that is not working probably needs more attention than that’s going well
Utility as pilot
• Some decisions can be set as Pilot for improving decision effectiveness
11Decision X- ray “snapshot”Decision: [write decision here]
Decisioneffectiveness
4 – Strongly Agree3 - Agree2 - Disagree1 - Strongly disagree
4- Much faster3 – Somewhat faster2 – Somewhat slower1 - Much Slower
4 – Strongly Agree3 - Agree2 - Disagree1 - Strongly disagree
4 – Exactly the right amount3 – A bit too much/little2 – Way too much/little1 – Off the charts
QualityIn retrospect, we made the right
decision:
SpeedRelative to competitors, we
made the decision:
YieldWe executed the decision as
intended:
EffortThe level of effort we applied
was:
Organization strengths / barriersRating Comments
4- Strongly agree; 3- Agree; 2 – Disagree ; 1 – Strongly disagree
• Our structure facilitated making and executing the decision well and quickly with the right effort
• Decision roles were clear and appropriate
• We used a robust decision process
• We had the right information at the right time
• People’s objective and incentive reinforced the right decision and action
• Participant had the right context to make and execute the decision
• We used an appropriate decision style
• We had the right skills and talent in right decision roles
• Participant demonstrated good decision behaviors
• Our culture reinforced making and executing the decision well
Copyright 2010 Bain % Company, Inc. No rights reserved
Instruction Select a decision
to X-ray Rate the
decision on quality, speed, yield & effort
Rate your level of agreement with each statement on organizational levers and note comments to bring your score to life
12Decision X-ray “day in the life”Decision: [write decision here]
Process Month 1 Month x Month y Month z
Group or person 1
Group or person 2
Group or person 3
Group or person x
Group or person y
Group or person z
Step 1
Step 2
Step 3
Step 4
Step 5
Step 6
Step 7 Step 8
Step 9
Decision
Decision
Decision
Implementation
Issue 2(e.g. revisiting decision leads to unnecessary loops)
Issue 1(e.g. unclear criteria lead to rework in input Issue 3 9e.g. follow up with
key group late in process sets back timing
Issue 4 (e.g. late engagement with implementer leads to last minute changes / delay
Instruction Sketch out
the basic process steps for how the decision works today
Highlight issues and disconnects in callouts, reflecting on un necessary loops, process disconnects and alignments issues.
13Clarifying the “what-who-how-when” to make critical decisions hum
What?• Define the decision we are actually trying to
make• Frame the decision in an appropriate way• Split the decision into sub decisions if
necessary
Who?
• Clarify up front who will play what role in each decision 9e.g., decision maker, recommender.
When?• Clarify timelines for decision and execution
and key milestones• Create a decision calendar for ongoing,
interconnected decision
How?• Install structured decision approach• Design and specify:
- interaction- Critical meeting- Closure and commitment- Feedback loop
14Tips for SuccessHigh performing organization have developed techniques for setting clear guidelines on what Decision they are trying to make
Start any discussion on decisions with a reminder of what you’re trying to decide Start every meeting with a single statement “ The purpose of this
meeting is to inform you about X, to discuss Y and to decide on Z
Frame the decision in reverse Instead of asking is it profitable to bid at a particular price, Ask is it
non-profitable to bid at a particular price
Make the decision explicit – and check to see if you are missing any parts of the decision
15RAPID ®, a practical tool for decision roles
Input Agree
Recommend
Perform
DecideMake final decision:
"Commit the organization
to action”
Recommend a decision or an action
Formally agree on a recommendation;
must be consulted, should not be
ignored
Be accountable for performing a decision once made
Provide input to a recommendation; must be consulted, may be ignored
The acronym RAPID – reflect the primary roles in any decision
Ensure the only one person has the D Limit the A roles & ensure that sign-offs is on recommendation, not on the decision Let key players know their exact goals Don’t underestimate the – perform role When necessary be explicit about who will decide RAPID roles
16The how – elements of a best-practice decision process
Structured decision approach
• Conscious approach to decision: set criteria, consider relevant facts, develop alternatives and makes a clear decision weighing all of these
1
Clear Steps & sequence
• Logical steps and sequence for how decision roles and process will work in practice
• Clear guidelines on how and when to escalate and when not to2
Meeting & Committee
• Key meetings required for the decision specified, with purpose and participants clarified up front
• Appropriate committee reviews3
Closure & Commitment
• Final decision communicated to key parties• Resources allocated (people & money)• Execution plan in place(actions, accountabilities, milestones)
4
Feedback loops• On going review of execution progress to drive fast corrective action or
replicate successes5
17
Use a structured decision approach
Agree on a criteriaGather all relevant factsAlways ensure more than one alternative
Establish guidelines for steps & sequence (including escalation)
Defines path for escalationNever shoot the messengerBe aware of maverick escalations
Design meeting around specific decisions
Distribute meeting material in advanceMark them as• Information purpose only• For discussion & debate• Decision & action
Allocate required resourcesRebalance team to assist in executionLet people clearly know what decision is made
Close and commit
Act quickly on feedbackDevise feedback loopsReplicate successes
Establish feedback loops
Th
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ow
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lem
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f a b
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e p
roce
ss
18Tips for Success
Separate the decision from the discussion of choices First consider relevant facts and proposed alternatives, Discuss
whether facts are sufficient and all the right alternative are on the table
In separate session choose amongst the alternatives and plan mobilization for execution
Follow the rule of Seven for meetings Every person added to decision making group over seven reduces
decision effectiveness by 10%
Track the timing as well as the level of bottleneck resources to ensure effective execution
Top performing companies typically follow these practices:
19Decision centered versus traditional approach to organization
Traditional approach Decision – centered approach
HARD
Is our structure aligned with our strategy?
Does our structure support the decision most critical to creating value?
Who should report to whom? What are the specific roles and accountabilities for our critical decisions?
Are our core business processes effective and efficient?
Are our processes geared to produce effective, timely decisions and action?
So our information systems support our business objectives?
Do the people in key decision roles have the information they need when and how they need it ?
Is our compensation competitive with peers?
Do our performance objective and incentive focus people making the right decisions for the business?
SOFT
Do we have clear and compelling mission and vision?
Do people throughout our organization have the context they need to make and execute the decision they face?
Is our management style sufficiently inclusive?
Are our people clear on our preferred decision style (directive, participative, democratic, consensus)
Do we have an effective leadership team?
Do our leaders at all levels consistently demonstrate effective decision behaviors?
Do we have a high performance (sometime "customer-centric”) culture?
Does our culture reinforce prompt, effective decision making and action throughout the organization?
Are we winning the war for talent? Do we put our best people in the jobs where they can have the biggest impact on decisions?
20Embed decision capability
Building the foundation of effective decision Make decision effectiveness a priority
Align the top team and engage influential leaders early
Build commitment through hands- on experience
Ask the leader to co-create the plan
Creating and sustaining momentum Apply good decision disciplines to improve decision effectiveness
itself
Celebrate decision and execution success – and nurture grass root pull
21Embed decision capability
Embed decision behaviors and capability Build new capability and skills
Develop a repeatable model that can be applied throughout the business
Use a “train a trainer” approach – and tailor training the training to the audience
Help people learn through experience
Share best practices
Walk the talk
Measure the Impact
22Embed decision capability
Pitfalls to avoid Don’t start anything you’re not prepared to finish
Apply the tools to the difficult decisions, not just the easy ones
Don’t fudge the people issues
Cut bureaucracy – don’t‘ add to it
23Video from the creatorsStep 01
Step 02
Step 03
Step 04
Step 05
The authors