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Category: Leadership

The difference between individual and organisational decision-making

Often, when our co-op starts helping an organisation for the first time, we talk about organisational decision-making. To me, the way that organisations make decisions shows how effective they are now, and how effective they are likely to be in future as they grow.

No organisation likes to think they’re poor at decision-making. That’s because organisations are collections of individuals, and we as individuals don’t like to think we’re poor at decision-making. But individual and organisational decision-making are two separate things: you can have an organisation full of fantastic individual decision-makers, yet have poor organisational decision-making.

How can this be? How can individual people who are good at decision-making be part of an organisation which is poor at it? For me, the answer lies in three areas:

  • Context
  • Consent
  • Culture

None of this is rocket science, but it does take some intentional thinking to ensure these three things work together to ensure effective decision-making within organisations. In the following, I’m drawing solely on my own experience both with organisations as an employee, and outside organisations as a consultant.

Context

In order to make a positive organisational decision it’s important to have as much relevant context as possible. In a startup situation, this often means that the founder, who has all of the context, makes most (if not all) of the major decisions as they can see the big picture and have all of the context in their head.

However, as an organisation grows, a founder’s individual decision-making on behalf of the organisation becomes a bottleneck. The founder cannot be expected to be up-to-date with every single thing that’s happening, so decisions are pushed to the edges.

At the edges, individuals or teams need to be able to make decisions that will not negatively impact other areas of the organisation. As such, they need to understand the context in which they are making the decision. In our experience, this means working openly (sharing everything publicly by default) or at least transparently (sharing everything within your organisation by default). Removing barriers to information helps knowledge workers flourish and make good organisational decisions.

Consent

Individuals and teams at the edges of organisations can have all of the context they need to make a decision, but if they do not have the consent to make that decision, they will be stymied.

Consent within an organisation is different to consensus. This is something I’ve discussed elsewhere, listing the advantages of doing so:

  1. Consent balances groups and individuals
  2. Consent allows for forward motion
  3. Consent is safe

The mantra here is ‘good enough for now, safe enough to try’. With that kind of attitude, the organisation can continue moving quickly and avoiding bottlenecks.

Culture

All of the above is for naught, however, if the organisational culture is one where recriminations are common. I’ve worked with and within organisations were line managers are passive-aggressively cc’d on emails to form an ‘audit trail’, and where witch-hunts follow decisions that ended up being problematic but were made in good faith and with all available information.

To be successful, organisations have to innovate. Part of innovation is failure, to figure out what doesn’t work, so that you can double-down on what does. If decisions made to the best ability of individuals or teams turn out to lead to problems, the best thing to do is to run a retrospective rather than apportion blame.

Ultimately, culture flows from the top of an organisation. Whoever is in charge has to personify the values for which the organisation stands, including a tolerance for decisions being made at the edges of the organisation. These decisions should be made in a way that has all of the necessary context, and in a consensual way. Whoever makes the decision should not fear reprisals, but rather be celebrated for being decisive.


To conclude, organisations should be continually thinking about how they make decisions, especially as they grow. I read somewhere once upon a time that organisations’ workflows break at multiples of three and ten and, if true, that certainly includes their decision-making.

The three things to consider when reviewing decision-making, in my experience, are context, consent, and culture. Get these right, and your organisations will have empowered people making decisions based on good information, and without fear of what might happen if they get things wrong.


Image based on an photo by Jan Genge

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