Surface Ripples

7 Deadly Sins of Decision-Making

 I recently viewed an infographic by Purpose Linked Consulting about what prevents effective decision-making.  As leaders, we make decisions every day; some simple, some vital.  Some of them may take longer time to reach than others.  What I liked about Purpose Linked’s graphic was the way it portrayed the characteristics of a ‘good’ decision-making framework in an easy-to-understand way.

We start with:

Lack of Effective Process:

No process means decisions are either delayed (Purpose Linked call it ‘stalled’) or reversed.  This means that progress and innovation are delayed or never happen, resulting in the decline of the organisation as it loses business to others capable of making decisions more quickly and (perhaps) reduced morale amongst staff.

No Training in Decision-Making for Employees:

For a ‘good’ decision, we need quality processes and decisions.  Surprisingly, people do need training in decision-making as we all tend to see things thorough our own filters of education, culture and experience.  This must be subordinated to what works for the organisation (although some aspects may be just as relevant).

Lack of/Inadequate Guidelines for Decisions Directly Affecting Customers:

If every decision must be referred ‘to the supervisor/manager/boss’, customers will get frustrated and take their business to organisations capable of making decisions more quickly.  I remember being accused of ‘corporate heresy’ once for suggesting that frontline staff be empowered to refund charges up to a pre-defined limit in cases in which (99% of the time) they knew the manager would refund them, saving management time as well as keeping customers happy.  Result: complaints and long queues.

Empowering Employees to Make Decisions Without Authority to Act:

Worse, perhaps, than not being able to make decisions is not being able to implement them without another party intervening.  If the post-decision processes don’t support the decision-making, we have the same problem as above.

Fear of Failure:

The biggest impediment of all.  No one (particularly in a corporate setting) likes to be seen to take ‘the wrong decision’.  This may be because, in the past, the organisation has penalised poor decisions.  Result: the buck is passed up the line.  I’ve seen plenty of examples of this, even now.  The problem is, if we don’t make mistakes from time to time, we can’t learn from them.  Of course, we hope that such mistakes aren’t serious and that those that do occur happen only once…

Poor Communication/Lack of Collaboration:

I’ve seen plenty of cases where large organisations operate in ‘silos’ that keep information to themselves or need to follow their process as well.  Another side to this is that duplicated decisions are made, or that the wrong problems are solved due to lack of effective communication, resulting in duplication of effort and process (and again frustrated customers).    To cut across these ‘silos’ the concept of the ‘Relationship Manager’ was born.  What we also need is to see all department and functional heads aligned towards the same goals at the top.

‘Funnel’/’Fan’ Cultures:

‘Funnel Cultures’ direct all decisions are directed to one party.  ‘Fan Cultures’ require that multiple decision-makers are involved in a ‘if one fails, we all fail’ kind of situation.  Both may arise from fear of failure from past problems.  Both, however, mean action is delayed, and decision quality may not actually be improved.

Poor decision-making can result in frustrated staff and customers, loss of business, high staff turnover, reduced profitability, increased bureaucracy and failure to develop future leaders.  How does our organisation stack up against these?  Is it guilty of one of more?  What can be done to change it for the better?  

I’ve spent more than half my life delivering change in different world markets from the most developed to “emerging” economies. With a wealth of international experience in international financial services around the world running different operations and lending businesses, I started my own Consultancy to provide solutions for improving performance, productivity and risk management.  I work with individuals, small businesses, charities, quoted companies and academic institutions across the world. An international speaker, trainer, author and fund-raiser, I can be contacted by email. My website provides a full picture of my portfolio of services.  For strategic questions that you should be asking yourself, follow me at @wkm610.

Labels: Customer Care, Leadership, Productivity, Strategy, Teamwork

posted by William Martin @ 08:45 0 Comments

Eggs and Baskets

Russia cuts off Poland and Bulgaria’s gas supplies. Europe moves to block Russian oil imports.  Rather like the precipitous drop in supplies of PPE from China during the COVID crisis, we see another illustration of the risk of putting all your proverbial eggs into one basket.

Globalisation has its benefits: for example, the ability to centralise production in a country that can do it better/faster/cheaper (or all three) and exploit the process of just-in-time-delivery made possible by modern supply chain management techniques, ensuring ‘lean manufacturing’ with minimal raw material holdings and many more finished goods shipped faster from warehouses to wholesalers and consumers placing orders online.  

Jobs have been created in lesser-developed countries with lower labour costs or in countries with higher technological capacity/expertise, resulting (over time) in increased spending power and improvements in living standards.  Increased disposable income has created a new middle class with demand for quality goods, holidays and housing. 

However, those same benefits are now proving to be the Achilles’ heel of globalisation.  With many eggs in one basket, the results are beginning to speak for themselves.  Economies that offshore hand a potential strategic advantage to adversaries.

The choice is either to re-onshore production if one can (with increases in cost of goods manufactured in a potentially more ‘expensive’ labour force) or to accept the inherent risk of offshore production. Another choice is to diversify suppliers with the intent that if one is lost, the others can take up the slack. The coronavirus epidermic, however, proved the downside of this as almost every manufacturing country of any significance in the world found itself under siege from the epidemic as well.

As we have seen, when the world system goes down as it did with coronavirus, all these benefits come to nought.  We may well have to get used once more to a world that is more fragmented and expensive, but perhaps also more secure in certain respects.  The likelihood is that regional and trading alliances with become more, rather than less, prevalent.  Small countries that choose to ‘go it alone’ are likely to find themselves at a disadvantage.

I’ve spent more than half my life delivering change in different world markets from the most developed to “emerging” economies. With a wealth of international experience in international financial services around the world running different operations and lending businesses, I started my own Consultancy to provide solutions for improving performance, productivity and risk management.  I work with individuals, small businesses, charities, quoted companies and academic institutions across the world. An international speaker, trainer, author and fund-raiser, I can be contacted by email. My website provides a full picture of my portfolio of services.  For strategic questions that you should be asking yourself, follow me at @wkm610.

Labels: Crisis Management, Customer Care, Financial, Risk, Strategy

posted by William Martin @ 11:28 0 Comments