Effective Leaders Decide About Deciding talsks about a convoluted decision-making processes wasting time. Respondents to a 2018 McKinsey survey, for instance, said they spent 37% of their time making decisions, on average — and they estimated that more than half that time was spent ineffectively. On the other hand, delegating decisions and trusting the people you’ve handed them to isn’t always easy.
Once we landed on the framework, each executive populated a matrix for their own business unit. They piled up all the topics for decisions that needed to be made regularly into the four quadrants. We talked through the choices, and they then had a clear idea of when and to what extent I should (or wanted to) be involved. Each leader could cascade this model as far into their organization as they chose to.
Here are the kinds of decisions we chose to put into each category.
Decide without me: Your direct reports should have most of their responsibilities piled under this item. This would include successfully executing the agreed-to strategy, fulfilling the duties of their role, hiring, spending, solving personnel issues, and managing the departments through their dashboard. A leader’s job is to help establish missions, not to micromanage how each person gets there.
Inform on progress: A leader may want to “watch” some matters as they unfold. These include initiatives that have risk, general budget creep, or employee issues that might escalate. Sometimes I ask execs to use the channels of their choice to inform me on projects they are working on that I have personal passion for. This way, I stay informed and don’t need to ask about it but still get the joy of watching it develop. We found that before, when I would proactively ask questions, executives thought I was questioning their performance. In reality, I simply wanted to be informed along the way without taking any action.
Propose for approval: Things that come up during the year that fall outside of our planned strategy or approved funding belong in this category. Most approvals can be addressed in our quarterly planning meetings, but sometimes unexpected issues need faster feedback — like spending money over the approved budget, making major policy changes, or quickly deciding on a large opportunity that has popped up. Depending on the scale of risk, the team might send me a handful of slides making a case for the proposal, which I can simply approve over email. Other topics are meatier and need the input and approval of the whole executive team.
Escalate immediately: This category mostly evolves around high-risk or high-reward areas. These include scenarios where there are major risks to the strategic plan, changes in governance, shifts in the market, threats to data security or physical security, or even an unexpected acquisition opportunity
Yes, there are other models about how leaders and managers communicate decisions, like RACI (an acronym for “responsible, accountable, consulted, and informed”), but those are for decisions at the project level, not the executive table. Once we aligned around this model, it became clearer to all of us what I should let go of — while also giving me permission to poke my head in if something was derailing that they thought they had handled.
It reminds me of the great 2017 McKinsey paper “Untangling your organization’s decision making“
- Big-bet decisions.
These infrequent and high-risk decisions have the potential to shape the future of the company.
- Cross-cutting decisions.
In these frequent and high-risk decisions, a series of small, interconnected decisions are made by different groups as part of a collaborative, end-to-end decision process.
- Delegated decisions.
These frequent and low-risk decisions are effectively handled by an individual or working team, with limited input from others.
- Ad hoc decisions.
The organization’s infrequent, low-stakes decisions are deliberately ignored in this article, in order to sharpen our focus on the other three areas, where organizational ambiguity is most likely to undermine decision-making effectiveness.