Decision Making Elements
The 3 Most Important Elements of the Process
Before someone becomes a manager, they say “If I ever get to make the decisions, I will….”
After someone becomes a manager, they say “I wish I didn’t have to make all the decisions”.
The reality is that making decisions is a big part of a manager’s job - but it shouldn’t be the biggest part and it shouldn’t be overwhelming. The key is to have a decision making process, using that process, and teaching that process to your team. Before a manager creates a process, a manager needs to understand the key elements.
I refer to these as CAT - Consistency, Autonomy, and Transparency.
Element 1: Consistency
Consistency is critical in all decisions. This is why a process matters so much. Without a process, a manager is likely to be making decisions based on a whims of the moment. Inconsistent decisions creates frustration and lots of confusion. While each day is an independent element, consistency ensures that there is an overarching theme - which creates comfort and accuracy.
How does a manager achieve consistency? Through a prioritization of key factors. This is why so many organizations spend time and money on creating value and mission statements. Done well (which they aren’t most of the time), they create a prioritization system that a manager can follow when making decisions.
For simplicity, let’s assume that your organization has 3 key values prioritized in this order: Customer satisfaction, profit maximization, and employee engagement. An issue comes up which requires you to make a decision. Option 1 costs more, but customer satisfaction goes up significantly. Option 2 costs less, but you don’t get any increased customer satisfaction.
If you look at the values, customer satisfaction should be prioritized, which means Option 1. Of course this assumes the cost isn’t disproportionately more compared to the customer satisfaction. If a manager selects Option 1 one day and says it is because of customer satisfaction, but then selects Option 2 another day talking about how profits are more important, employees get confused and the manager loses all credibility.
Element 2: Autonomy
I think of autonomy in two respects: the decision the manager makes and the decision the employee makes.
In terms of the decision the manager makes, this is a bit of a misnomer. If there is truly a decision, then of course the manager has the autonomy to make the decision. Where it becomes an issue is when the manager doesn’t fully understand what level of autonomy she has. The best example of this tends to be in spending limits. Most organizations have a formal or informal spending limit. For example, a manager has full approval for any decision costing less than $10,000. Anything over that amount and the manager has to get approval.
Where it gets complicated is with things that can’t be as quantitative. In terms of personnel, does a manager have full ability to hire and fire? Or do HR and other managers need to be involved. Managers must figure out where these lines exist.
In terms of the employee, the manager must learn two key lessons to ensure autonomy. First, which decisions to let others make. A team that relies on the manager to make all decisions is ineffective and unengaged. Managers let the team make some decisions for efficiency, productivity, and engagement. Second, how to truly let go of decisions. If you give an employee the authority to make a decision and you have taught him the process to make a decision, let them make it! Too many managers second guess or overrule a decision. This is another way to kill credibility. The only exception to this is a decision that would have drastic consequences (safety, huge financial issue, couldn’t be fixed, etc.).
If a manager believes an employee made a poor decision, she should do two things. First, really think if it was a poor decision or just one she wouldn’t have made. Making a different decision isn’t necessary a poor one. Second, discuss with the employee how and why they made the decision. This will increase your understanding and give you a chance to share a different perspective.
CAUTION: When sharing that different perspective, make sure to communicate it as another option. Do not make the employee feel like they made a mistake.
Element 3: Transparency
Most decisions a manager makes impact either the employee or the customer. Both deserve to know how and why the decision was made. For simple decisions, it may not require an explanation. For more complex decisions, being transparent is not only critical, but beneficial.
Let’s look at an example. A customer is complaining about the service in a restaurant even though the server and host followed processes and procedures perfectly. The server is frustrated by their complaining and gets the manager involved. The manager listens and decides to offer a reduction in the bill to the customer. Without an explanation, the server could feel that the manager doesn’t support them and gets more frustrated. With an explanation, the manager can ensure the employee that they did everything correctly and they shouldn’t change. He decided that arguing wasn’t worth it in this case and that the next time these customers came in, he would address them before they ordered to ensure it doesn’t happen again. The employee appreciates the recognition that everything was done right and feels better about the entire encounter.
Same action by the manager, but totally different reactions from the employee.
Conclusion
Some decisions are easy. Some are hard. Every time a manager makes a decision will impact trust, credibility, and engagement. Ensuring the 3 elements of consistency, autonomy, and transparency impacts those elements in the best way.