Decide and Deliver

Paul Rogers: We think good decisions are essential for the success of an organization and at one level that's intuitive and obvious, that companies or organizations which are better at decisions are likely to be more successful, but our database allows us to quantify how much more successful, and what we find is that companies that are better at decisions on average have higher growth, better return on capital and about six percentage points higher shareholder return than the average company. And what's more, companies that are good at decisions have happier people, so employees are more motivated and enjoy their work significantly more than employees in the average company.

Rachel Salaman: Just to define good decisions at this point, they are decisions that have successful outcomes, or how would you define them?

Paul Rogers: So we define a good decision as one that has four attributes and importantly it's all four that are needed. The first is quality which means that it turns out to be correct. The second is speed and we're not talking here about speed for its own sake, because there are times when the best decision is no decision, but on average we see that the high performing companies are able to take information, process it into a decision and ultimately into action with a cycle time or a metabolism that is quicker than the competition. Third is what we call yield or execution, cliché though it may be but even the best decision creates no value unless it's well executed. And last is what we call effort which is a little bit different, it's a bit like a tax on the impact of quality, speed and yield, and the point about effort is you need the right amount of effort for the decision at stake, so if it's a very big important decision which is very complex, it justifies a lot of effort, but if it's a relatively routine decision you don't want an organization in which it requires a huge amount of energy to make simple things happen. So effort needs to be the right amount proportional to the value and the complexity of the decision.

Rachel Salaman: And do you discount luck altogether, because some people would say that things that turn out to be good decisions were actually just lucky decisions?

Paul Rogers: Well you can't discount luck altogether in the world we live in, I think it was Napoleon who said give me generals that are lucky, and of course that's what you want. On the other hand overtime and faced with multiple decisions as organizations are, the better ones will find themselves guess what, to be luckier on average than the rest, because what's going on of course is they're making their own luck. So no, we don't discount luck, but you can't control luck so what you can control is how effectively and repeatedly you are making good decisions and making them happen quickly, and if you're doing that then assuming luck balances, you are going to do better than the people who don't do that.

Rachel Salaman: Now your book is called "Decide and Deliver." How much should someone think about the delivery side of things when they're making a decision?

Paul Rogers: We think delivery is absolutely fundamental for two reasons, the first is that our definition of a good decision is maybe obviously that the best decisions are the ones that get well executed, not simply that they're good on paper. Second, in making the decision in the first place, yes it's very important to take into consideration the implementation challenges and what it will take to make it happen.

Rachel Salaman: From your research, what are some of the worst weaknesses that can hinder good decision making, what you call in the book decision barriers?

Paul Rogers: Yes there are lots of things that can get in the way of good decisions and of course companies that have challenges in this area, it's not because generally people don't want to make and execute good decisions, but broadly you can put them into two categories, which are barriers associated with the way the organization is designed if you like. And then the second category is the more human side of the equation and both are important, so things that can get in the way in the more structural area are the structure itself can be too complicated; quite common, people can be unclear about their roles and accountabilities, sometimes the processes can get in the way, for example endless meetings or too many committees or committees that aren't set up or run in the right way. Sometimes slightly subtler things can be misaligned, such as if people who you want to collaborate on a certain decision have measures which in fact incent them to behave in contrarian ways that can be a problem. So lots of ways in which the underlying design of the organization can create barriers. On the human side that's perhaps even more complex but no less important, if anything more important because again it's a cliché but processes don't make decisions, people do, and so what we're talking about there is making sure that you have people who have the skill and the will to make and execute the decisions that you need them to do, that if you want teaming and collaboration have the attitude and the ability to team effectively, that the tone that the leadership is setting is a decision focused tone, that the underlying culture in the business reinforces rather than gets in the way of effective decisions. And any of those areas, if it's out of kilter with effective decisions can over time come to represent a major barrier.

Rachel Salaman: The subtitle of your book is "Five Steps to Breakthrough Performance in your Organization" and I'd like to talk a little more about those five steps. The first one is assess your organization's decision effectiveness. So how do you do that?

Paul Rogers: Well it's funny how few organizations today can actually answer the question how good they are at decisions, because it's not a question that has been asked that much and there aren't a lot of tools out there to help address it, so of course as part of our work and as part of the preparation for the book, we've developed a diagnostic tool which helps companies assess their own decision effectiveness and the core of the tool is an online survey with a battery of questions and companies can ask a selection of employees, typically anything from 100 to 500 or 600 employees from across the organization. It takes about 10 to 15 minutes only, it's actually very easy for people to do and that creates a structured picture which can be compared with the benchmarks in our database of 1000 companies and starts to structure the dialog around how good the company is today at decision, which kinds of decisions happen well or not so well and what some of the underlying root causes are.

Rachel Salaman: Can you give an example of how an organization has successfully carried out that assessment and what the results were?

Paul Rogers: Yes I'm working with a client as we speak which happens to be in the oil and gas industry and they are quite a successful business but the management feels that there's more to come, and so what's happened is we've worked with them over a relatively short period of time, about 160 of their top managers have completed our survey and we played back the findings of that to the executive team, which is I guess the top 12 managers about two weeks ago and in fact tomorrow I have the privilege of going to Italy to spend the weekend with the entire top management team to review the findings. What that will do is help align them around the opportunity and the direction of what's necessary to improve their decision effectiveness and start a dialog within their organization about what actions they are going to take.

Rachel Salaman: Did they find that process easy?

Paul Rogers: Yes they did find the process easy, at least they found it easy in physical terms, because all that's required is going online and answering a predetermined set of questions, plus adding thoughts of your own in answering some open questions, but the whole exercise takes 10 to 15 minutes. It's maybe less easy if you get back some messages that aren't what you were expecting or aren't what you want to hear, so psychologically it's not necessarily so easy, depending on what comes back, but in terms of the actual engagement in order to complete the diagnosis, that's relatively straightforward, yes.

Rachel Salaman: And it sets you up for the second step.

Paul Rogers: So the important step if you do the diagnosis is of course, assuming that you learn something about opportunities to improve, which 99 percent of organizations do, is what you actually then do to take advantage of those opportunities, and there can be an element in which you, as it were, let the genie out of the bottle by doing the diagnostic and create an expectation that some of the aspects of the way the current organization works, which people may find frustrating are now going to get addressed. So definitely, taking the first step is only the first step.

Rachel Salaman: And within your five steps in your book, the second step is identify your critical decisions, and in your experience what makes a decision critical?

Paul Rogers: The reason it's important first of all to identify the critical decisions is because large organizations in particular are making and executing tens of thousands, even hundreds of thousands of decisions every week, and you would drown in complexity if you tried to address them all at a decision by decision level. Fortunately the 80/20 rule does apply and it turns out that not all decisions are equal, some are more important or more challenging to make and to execute. In thinking about which ones are critical it's important to consider both the one off decisions, the big investment or policy decisions, but also some of the more operational everyday decisions, which individually may have small impact but because they're made often or in many places across an organization they accumulate to have a big impact, and companies which are good at decisions find a way to be good, not just at the big one off, but also at the relevant everyday operational decisions. How do you decide which ones are critical? Basically it's a function of which decisions have the biggest impact on success, and also which of them are the most challenging to make because in many cases decisions which require organizational boundaries to be crossed, create more complexity in the way they get made and executed and create more challenge therefore for the organization. So it's a combination of those two factors, and typically if you go through an exercise with a large organization you might identify 200 to 300 decisions overall that are candidates, but typically 15 to 25 will be where you really focus the attention because of the two factors that I've described.

Rachel Salaman: And how many of those decisions proportionately are one off specific decisions versus recurring weekly, monthly decisions?

Paul Rogers: The answer to that questions varies depending on the situation but typically it's much more about the second category, the recurring decisions, than the big one off decisions because the big one off decisions tend to attract a very highly engineered process and the right amount of effort. So in some situations you find where that's not the case, urgent action is required to correct it, but much more common is the challenge where the recurring decisions are somehow getting bogged down in organizational complexity and need to be streamlined.

Rachel Salaman: And the third step is make individual decisions work, so this is about improving the critical decisions that you've identified, what kind of things tend to need tweaking to make them work?

Paul Rogers: Having identified the decisions that really matter, the important next step is to take some of them and if you like, engineer them for success. The benefit of doing that is it creates impact and momentum and confidence in a decision based approach, and it also creates learning on how to apply a decision based approach more broadly. In setting them up for success we talk about the what, the who, the how and the when as being critical. So for a specific decision what decision is really on the table is not always as obvious as it may seem. The who can be enormously complicated in today's world where many organizations are trying to become more collaborative and joined up in the way they drive decisions. It's obvious to them that more people need to be involved but it's not always obvious which people or who actually has the ultimate authority to make a decision or what roles other play, for example who does or does not have veto power. So being clear who needs to be involved and what role they play can be really important; we have a decision tool that we call Rapid, which is specifically designed to help provide more clarity in this area. The how is really the mechanics of the process, so that's about linking a decision process to the underlying business process, it's about what can seem like more housekeeping things, like for example committees, who is on committees, how many committees there are, what the mandate is, but also just basic meeting disciplines and I think there's some research that says executive spend these days nearly half their time in meetings, but 80 percent of executives are dissatisfied with how productive those meetings are, and the concept of decision based meetings can be very important. And then the when is really about providing a timeline so that there is clarity on how long the expectation is for the decision might take and how long it might take after that to see it executed, which helps avoid decisions just drifting in ever increasing circles.

Rachel Salaman: So in practical terms it's a case of sitting down with the right people and working this out?

Paul Rogers: Yes it is, so although consultants like ourselves can be very helpful in helping provided a structured approach, methodologies, some objective calibration of how the organization feels about itself. Ultimately the only way you can really get success is if the people inside the organization who have to live day in, day out the way it works are intimately in designing and implementing the new approach. So step three is about deep on a small number of decisions and that can be very valuable, but it's not practical to do that across many, many decisions. Step four is really going broad and trying to create that organizational environment where it becomes second nature for people at all levels to be making and executing good decisions quickly.

Rachel Salaman: Yes and you call that fourth stage build an organization that decides and delivers, and this is about the big picture. What kind of changes are realistic, given how difficult it is to change things in an organization?

Paul Rogers: In doing that, what we find is necessary is to create what we call an integrated organizational system which is explicitly focused on helping people make and execute the key decisions, and we identify in the book ten elements which together comprise the integrated organization system. And these are explicitly a mix of what you might call the harder and the softer elements, so the harder are the, if you like, left brain analytical aspects of an organization like the role definition, the structure, the processes, the measures, the incentives. The softer stuff is more the people stuff, so what kind of leadership competences or other competences are required, how people are deployed into jobs with different levels of decision impact, the leadership development and performance management environment that you put people in, the leadership itself and how the leadership does or doesn't walk the talk, the underlying culture, what it is, how you shape it to be as focused on effective decisions as possible, the degree to which you do or don't provide a unifying context for people throughout the organization of what's really important so that they can make their own decisions in the knowledge of what the company itself is trying to achieve and what it really stands for. So there's a lot of factors and what we find is that decisions are the end product of getting those factors right and they provide a unifying force for how to make sure that each different element of the organizational system is driving performance and not simply optimizing for its own sake. But any one company or any one organization will find at a moment in time that it has strengths and weaknesses across different elements of the organizational system, and so while we are strong believers that almost any organization can benefit from really focusing on improving its decision effectiveness, the actual steps it needs to take and the elements of the organizational system that it needs to strengthen will be quite custom to its own situation and context.

Rachel Salaman: At this point in the book you talk about the different decision styles, so you have directive, participative, democratic and consensus. To what extent should an organization stick with just one decision style or how should an organization approach the idea of those four styles?

Paul Rogers: Some organizations find the whole decision style discussion really helpful and the reason I think they do is because the four styles are concrete and help a dilemma that some companies have, which is many have a history which is based on a relatively directive command and control style, and in today's world for a variety of reasons that becomes less appropriate and they know they need to move away from that towards something that is more collaborative, so they're clear what they're moving from but they're less clear what they're moving to, and what we see quite often is companies migrate away from directive and end up with a kind of consensus by default, which is not really what they intended in the first place, but it's just what happens. So lots of people end up getting involved, everybody has veto power and it bogs down decision making and can create a frustrating environment, so the progression from directive through participative through democratic to consensus can just be a helpful way of structuring a discussion, and what we find is that while any of those styles can work, most companies we work with end up choosing a participative style which involves collaboration and consultation, but a clear single point accountability for a decision. Now having said that, even if one has selected a core style for the business, let's say participative, of course there are going to be situations where one of the other styles is appropriate. So for example if the business gets into trouble and survival is at question, very often migrating back to a directive style for the period of the crisis is helpful. Equally there are certain kinds of decision where consensus is actually really valuable, so particularly for example decisions around the kinds of values or social engagement that the company wants to pursue, at least a broader consultation and putting a premium on making sure that the majority at least are on side can be well worth the extra effort and time that takes. So I guess in summary, the discussion of decision styles can be helpful because it helps provide a point on the horizon that you're trying to get to as opposed to simply defining where you are trying to get away from. And then secondly one does have to recognize that judgment is required and a certain dynamic application of whatever style you choose is required so that for a specific decision on a specific day it's okay to vary the style, if that's what the situation demands.

Rachel Salaman: The fifth and final step in your five step process is embed decision capabilities into everyday practices, so how do you actually go about doing that?

Paul Rogers: So the final step is really about the change process, and it's about making decision effectiveness a way of life rather than a point in time change program. There are really three keys to doing that. One is firstly to make sure that people throughout the business understand that this is a priority, decision effectiveness is what matters. Second is to create some momentum and some visible wins, and we talked a little bit about that in step three. One way to do that is to identify some decisions that are important but challenged in the current environment and focus on really helping breakthrough on those decisions. But the third step which is crucial is to build the capabilities of people at all levels to decide and deliver for themselves, which really means helping train and develop them so that they understand what good behavior is, and they have the tools and the resources to be able to exhibit it themselves day in and day out.

Rachel Salaman: And how easy is that?

Paul Rogers: No, it's not easy typically because very often we're dealing with large organizations with lots of people and if the organization has not evolved already into a decision focused way of working, we're talking about behavioral change on a large scale and organizations may be complicated but they're nothing compared to human beings. So persuading, helping, enabling people to make the personal change in the way they think about what constitutes good behavior in the way they do their jobs, that is a large challenge, but it absolutely can be achieved.

Rachel Salaman: You offer some tips to avoid common stumbling blocks that people run into once they've started the process of improving their organization's decisions, could you just talk about a couple of these?

Paul Rogers: Well some of the pitfalls are firstly in the actual design of the new organization and secondly in the process by which people go about it. So on the design, it's really important to get the left brain elements right, and by left brain elements I'm talking about structure if you need to change structure, which very often you do not, but if you do, certainly the role, clarity potentially measures processes. So those are important. The pitfall is only focusing on the left brain elements of the way the organization works and as I think I said earlier, it may be a cliché but people make decisions, processes don't, and so what's critical is to also embrace the more right brain people side, the behavioral side of what's needed. The second pitfall can be to fudge the people issues, and so again you can design something which on paper should work, but if you don't have the right people with the skill and the will to do it that way, it's not going to happen, and sometimes that means either at the extreme changing key people, or certainly helping people understand and make the personal journey in terms of adapting to the new behaviors. At a more micro level, pitfalls can be in the interests of harnessing complexity and managing complexity, sometimes the process can add complexity if you're not careful, so while it's very important for example to help people be clear on what their roles are for the most important decisions, because of just simply the sheer number of decisions there are in a large organizations, if you let that get out of control you can end up with piles and piles of charts on decision roles which actually make the problem worse, not better. And I guess the last pitfall is don't start what you're not prepared to finish in tackling organizational change and creating an expectation that things will get better, there is nothing more frustrating to an employee inside the business than then nothing changes.

Rachel Salaman: So if there was one tip that you would like people to take away from this interview to help them improve the effectiveness of their organization's decisions, what would it be?

Paul Rogers: Well I guess the one tip is put decisions at the center of the way you think about organizational effectiveness and ask yourself the question, how good is my organization at making and executing good decisions quickly, and what is it about the way the organization works that could make it better.

Rachel Salaman: That was Paul Rogers talking to me in London. The name of Paul's book again is "Decide and Deliver: Five Steps to Breakthrough Performance in Your Organization." You can find out more about it at www.decide-deliver.com. I will be back in a few weeks with another expert interview, until then goodbye.