Decentralising decision-making. Making rapid decisions where it counts.

No executive doubts the importance of responsiveness: to be able to act with agility to business threats, changes in stakeholder needs, disruption, and seize market opportunities. To do this rapidly and effectively requires decisions to be delegated to where the knowledge of the context and issue is greatest. Any decision that must be escalated to higher levels of authority introduces a delay.

Optimising decision making for delivery of value

If rapid delivery of value is of highest importance, decentralising decisions to teams is critical. The role of management is to establish a framework for making decisions over making the decision for teams. Where the decision is far reaching, though, there may be times in which the decision should be centralised.

Optimising decision making for quality and reliability

Compliance is a central rationale for centralising decision-making, but where inspection by management is required, bottlenecks rapidly impact responsiveness. Information and approvals have to travel up and down the management hierarchy and while time is spent waiting the context can change and new information can arise.

To avoid delays in decision making while holding quality as paramount, agile teams use practices such as a Definition of Done, over downstream points of inspection to ensure standards are maintained. The team’s responsibility is to do the work required to meet compliance standards and apply empiricism on a daily basis to monitor the progress of work against the required standards.

Are teams ready to make decisions themselves?

When executives reoganise organisational structures to optimise for rapid decision making there is worry about the maturity of teams to take on the burden, as well as a fear of letting go amongst some managers. Decentralising decision making doesn’t have to be black and white. 

The decision to decentralise should be based on a number of factors, including:

  • How mature is the team?
  • Do they have all the knowledge of the context and issue?
  • Are we confident the team will make a good decision?

As a team matures and demonstrates good decision making ability, move toward decentralising those decisions. 

Conclusions

When the work context needs to change rapidly, centralised decision making frameworks and operating silos mean lost time and the potential for increased damage to the organisation. Decentralisation is the most effective way to promote rapid decision making, but the change doesn’t need to be black and white. Agile frameworks create a paradigm that establish a clear structure for making decisions, and complementary practices help to bring light to delays or breakdowns in quality and compliance. Choosing an agile framework, keeping it simple, and introducing an iterative approach to decentralisation of decisions will help you react to change in a smarter way.

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