Making Decisions at Your Company

Does Your Company Have a System for Making Decisions?

An organization can miss wonderful opportunities if it struggles to make decisions. And yet, many businesses do not have the tools or policies to make decisions effectively.

A few influential business owners have surprising ways to foster a culture of healthy decision making. In an interview with The Wall Street Journal, the new CEO of Coca-Cola Co. said that he is hoping to “shake off a culture of cautiousness” within the company and encourage his team to “make mistakes.” Amazon founder Jeff Bezos once noted that when making decisions with his team, he relies on one philosophy: “disagree and commit.” This means that if the leadership team does not reach a consensus, it still makes a decision. Then, Bezos asks each member of the leadership team to make his or her objections known. After that, everyone commits to the chosen plan, whether they like it or not. This allows the organization to move ahead without consensus, and it allows everyone to have a voice.

Both of these leadership philosophies revolve around the idea that failure is a necessary piece of any business. Think about it: in a competitive market, sustainable businesses are always developing new services and diversifying revenue streams. However, not every new idea works — and that means that failure is an inevitable part of market-driven strategy. Therefore, businesses that embrace failure are more likely to foster a healthy atmosphere for decision-making.

Why businesses fail to make decisions

Some organizations fail to act in the face of new challenges or opportunities. This causes their market position to erode and their cash reserves to dwindle. They either fail to decide on a plan or they do not implement their plan in a timely manner. Why does this happen?

This is where it gets complicated. Often it is because the contractor doesn’t have the workforce management tools to accurately analyze the business’s posture and to manage new projects well.

  1. The CEO doesn’t have the right environmental or financial information to make market-oriented strategy decisions.
  2. The company does not understand either the degree of downside risk or the return-on-investment. Doing nothing can be more risky than embracing change.
  3. The organization is risk adverse because of past failures and will not approve a proposal with downside risk.
  4. The management team lacks the tools (metrics-based performance analysis, real-time project management control, and service reporting) to go from idea to service.

Tips for making decisions

Here are some rules of for effective decision making:

  • Don’t allow looming decisions to paralyze your team. Launching a new service line, agreeing to a value-based contract, investing in new technology, initiating a new merger or acquisition, creating a partnership — these are big decisions that require decisive action. Decide yes or decide no, but do not decide nothing. As Mr. Bezos said, that doesn’t mean everyone has to agree with every decision you make; but it does mean you need to actually make a decision.
  • Once you’ve made your decision, find a way to help your internal stakeholders embrace it. This includes telling your team reasons for the change, building a culture that embraces change, and developing the talent to manage change.
  • Use metrics to manage the change. Effective workforce management technology can provide these metrics. If managers do not have real-time information on time and attendance, schedules, orders, inspections, and other critical metrics in good time, problems may go undetected.