Executives sixty years ago could expect their companies to last a lifetime. Executives today will see half of the S&P 500 disappear in the next decade. The business world is in a digital churn of creative destruction. We are in the Speed Age.
Decisions run in a continuous cycle of gathering information, making decisions and driving execution.
It’s common for managers and executives to take days or weeks deciding what to do. That was fast enough in the pre-digital world of top-down decision making. But in the Speed Age companies are flooded with real-time information. We execute as global teams with instant communication. That’s why in our digital world, decision-making is the new bottleneck.
1. Push power to the edge
In a much faster world, new problems emerge all the time. Situations change too rapidly to “run it up the chain” for guidance. Organizations have to shorten decision cycles by pushing decision-making power to the edge of the company, where what Deloitte calls frontline workgroups have the best information, the greatest motivation and the shortest problem-solving loops.
2. Be transparent
Executives who push decision-making out to the edges must overemphasize openness, visibility and accountability when making and communicating decisions. Ray Dalio (American billionaire investor) claims that transparency is critical for independent thinkers to make the best decisions. Lack of transparency leads to poor communication beyond the people who were in a particular decision-making meeting. Decisions trickle out in a game of telephone. Stakeholders lack crucial context about the choices considered, people involved, and results expected.
3. Nudge to align
For a long time, executives relied on information technology to perfect decision-making. But the reality of human behavior doesn’t fit in a box. This year the Nobel Prize winner in Economics proved that people are predictably irrational, and so small nudges can make a big positive difference in our decision making. Research shows that decision checklists can improve decision alignment and outcomes by 20%. And nudging towards more inclusive decision-making teams results in better choices 87% of the time by avoiding groupthink and eliminating execution friction.
For more information: Forbes