Kill the Hierarchy! - Rapid Decision-Making
Transitioning People Through Constant Change
In my last post I introduced the series of post entitled “Kill the Hierarchy”. In this post we will explore the need for ‘rapid decision-making’.
For an organisation to survive and thrive in a world of constant and uncertain change, the organisation has to be one in which leadership is important, but MORE important is a collaborative workplace in which transparency and creative freedom reign over hierarchical boundaries. This enables innovation, creativity, experimentation, rapid decision-making, agility and employee ownership, engagement and influence. There is widespread autonomy and everyone leads.
No one ever did anything awesome or great just because they were told to!
The ‘Kill the Hierarchy’ model shown the diagram below, illustrates the changes needed to move to a flatter structure, and it is these changes that we shall be exploring in this series of posts.
In a hierarchy decisions can take a long time due to the layers through which information has to flow before a decision is made. When organisations need to respond quickly to changing priorities, opportunities, competition, threats etc. the ability to make decisions quickly will be essential for success. Therefore the hierarchy has to be flattened so that there are less decision-making hoops through which to jump.
When fewer people have to be consulted about a decision, it allows for provision of rapid response to issues or concerns.
A flatter structure creates a direct communication line between the head of the organisation (e.g. CEO) and the employees on the front line. Quality decisions can be made rapidly as they have context based on reality informed by the ‘workers’.
Decision driven structure
An organisations performance is reliant on its ability to make decisions better and faster than the competition.
The organisational structure should reflect the organisations strategic priorities. If the organisation needs to be become more innovative, the structure needs to enable decision-making that drives increased innovation over time.
Key is to identify the decisions that will be significant in the success of the organisation and then determine where in the organisation those decisions should be made in order to create the most value.
Rather than assume that the important decisions should be made at the top, identify where they can really be made and therefore made and acted upon faster.
The increased ease and reduced cost of communication in the digital age has made decision making worse. It is easy to bring more and more people into the decision-making process through email and collaboration platforms whilst not being clear about where the decision-making authority actual resides. The outcome is too many meetings and too many email threads that do not add any value.
In a McKinsey article entitled “Untangling your organization’s decision making”, the authors discuss the fact that decision-making can be faster in a flatter organisation:
“The ultimate solution for many organizations looking to untangle their decision making is to become flatter and more agile, with decision authority and accountability going hand in hand. High-flying technology companies such as Google and Spotify are frequently the poster children for this approach, but it has also been adapted by more traditional ones such as ING. As we’ve described elsewhere, agile organization models get decision making into the right hands, are faster in reacting to (or anticipating) shifts in the business environment, and often become magnets for top talent, who prefer working at companies with fewer layers of management and greater empowerment.
As we’ve worked with organizations seeking to become more agile, we’ve found that it’s possible to accelerate the improvement of decision making through the simple steps of categorizing the type of decision that’s being made and tailoring your approach accordingly”.
Decision-making best placed
The more hierarchical (and bureaucratic) an organisation becomes, the more it opens itself up to slow and bad decision-making.
The taller the hierarchy gets, the ability of those with the knowledge to rightly contest a questionable decision, reduces.
As Gary Hamel, a renowned management expert succinctly put it in his article “First, Let’s Fire All the Managers”
“As decisions get bigger, the ranks of those able to challenge the decision maker get smaller. Hubris, myopia, and naïveté can lead to bad judgment at any level, but the danger is greatest when the decision maker’s power is, for all purposes, uncontestable. Give someone monarchlike authority, and sooner or later there will be a royal screwup. A related problem is that the most powerful managers are the ones furthest from frontline realities. All too often, decisions made on an Olympian peak prove to be unworkable on the ground”.
The hierarchical organisation disempowers those best suited to make informed and rapid decisions. Not only does the decision-making reduce to a snail’s pace, it also decreases in quality.
The tomato processor, Morning Star, has adhered to a flat structure since its founding in 1970.
The Morning Star website states:
“We envision an organization of self-managing professionals who initiate communication and coordination of their activities with fellow colleagues, customers, suppliers and fellow industry participants, absent directives from others”.
Morning Star has put the decision-making where it needs to be. Workers are given the tools and empowerment to make decisions in order to carry out their jobs. If you need an $8000 welding machine to do your job, you order it. Business units negotiate customer-supplier agreements and employees can initiate the hiring process when they need additional resources. Decision-making is rapid and not constrained by a hierarchy.
Rapid decision-making is needed if organisations are going to promptly respond to the volatile and increasingly competitive environment in which it exists. Decision-making needs to be placed in the position best suited to enable quick reaction but also quality response.
Rapid-decision making will only be enabled through a flatter and more fluid organisational structure that reduces the bureaucracy that is unnecessary hierarchy.
Upcoming posts in this series entitled ‘Kill the Hierarchy’ will continue to explore how we flatten the hierarchy in order to achieve rapid and decentralised decision-making, employee engagement, high levels of collaboration, widespread autonomy, trust and respect, and an environment in which everyone leads.
More posts on their way over the coming weeks and months, exploring how we need to take a fresh and radical look at organisational change management, and the changes we need to make if we are to thrive.
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