The business community is dramatically more focused than ever before on a powerful set of advanced tools for decision-making, particularly applications of a rich base of research on cognitive biases. We’re believers in this work, and I’ll reflect on aspects of it in future posts. Here I’d like to focus on a much more basic question: who participates in making decisions, and how should each person in the room think about his or her role?
Let’s begin not only with the fundamental question of who makes the decision but the often-neglected question: by virtue of what. In some cases, decisions are made by individuals. As we’ve articulated in other posts about effective delegation, sponsors make decisions about what’s in the brief, and when they’ve chosen owners, those owners make decisions about the path to the goal. In other cases, decisions are made by groups. For high-stakes decisions such as making portfolio investments, a small, carefully selected group is often better because it incorporates more diversity of thinking and can more easily follow a disciplined process. Decision-making groups generally shouldn’t be larger than six or seven people, and they should have sufficient time to debate.
All of these answers to “who makes the decision” focus on people making decisions by virtue of a role they occupy. We must remember that authority isn’t capability. Being in charge of a given area or objective might or might not equate to having the knowledge, expertise or judgment to make a particular decision well. A person who has “decision rights” should still ask herself the question: “am I best positioned to make this decision?”
There are three basic answers to this question:
- Yes, as an expert. I have sufficient expertise and ability to judge such that I can gather the relevant evidence, interpret it and decide.
- Yes, as a synthesizer. I don’t have the expertise needed to make this decision myself, but I am best positioned to weigh the perspectives of experts and make a judgment about what’s the best decision all things considered.
- I’m not the best positioned to weigh and synthesize, so even though I have the authority to make the decision, I need to create a better construct for the decision to get made. My role is to get the decision made in the right way, rather than to make the right decision.
Clarity about which of these applies, and why, makes a tremendous difference to decision quality. For instance, making a decision as a synthesizer implies a very different kind of conversation leading up to the decision point than making a decision as an expert.
Often, there are many others in the room along with the ultimate decision-maker as a decision is being considered. It is important for each individual to know why he or she is in the room. Generally, people who don’t own the decision are in the room for one or more of the following reasons:
- To provide evidence that gets weighed in the decision (e.g., share observations from an interview with a candidate)
- To provide expert advice (e.g., evaluate the level of risk involved in a prospective investee’s business model, based on sector expertise)
- To advise on the basis of excellent judgment, helping the decision-maker connect the dots or weigh different considerations
- To help manage process (e.g., facilitate a discussion)
- To understand the context of the decision, in order to inform execution after the decision gets made
Each of these roles implies different choices for when and how to contribute to a decision. For instance, someone who is there primarily to act on a decision after it gets made probably shouldn’t offer his or her opinions on the content of the decision, but should make an observation if they see something amiss in the process being used to make a decision (e.g., a person raising a substantive risk isn’t being heard).
It doesn’t require any special knowledge or technique for a decision-maker to get clear about whether they’re in fact positioned to decide well, or for others in the room to orient themselves to the specific role they are best suited to play in contributing to the quality of a decision they don’t own. All that’s needed is intentionality and clear thinking. Basic as these considerations are, they can dramatically increase the quality of a group’s decision making – and help groups move not just toward higher performance, but closer to wisdom.
Photo Credit: Alex Maclean