Creating an Agile Organization Starts With Decision-making

In today’s fast-changing business environment, organizational agility is of great value to maintaining a competitive advantage.

So say the executives surveyed in a 2009 Economist Intelligence Unit report: “Organisational agility: How business can survive and thrive in turbulent times”, March 2009.

Ninety percent of interviewed executives believe “organizational agility is critical for business success”, and one half of the CEOs and CIOs agreed that “rapid decision-making and execution are not only important, but essential to a company’s competitive standing”.

The report goes on to say that over 80% of these respondents have undertaken one or more change initiatives to improve agility, but 34% of those initiatives failed to deliver the desired benefits.

One of the main obstacles? You guessed it: slow decision-making.

a dilemma
Creative Commons License photo credit: Julia Manzerova

What this tells me is that these failed initiatives stumbled out of the gate because they neglected to address the core decision processes within the organization. How can you improve overall competitive agility if your change initiatives are hamstrung by slow decision-making?

Start from solid ground. Optimize how your organization makes decisions first, so that when you’re faced with uncertain, risky opportunities or threats you’ve got a dependable process to get you through a team decision quickly.

Here’s the full report:

Economist Intelligence Unit report: “Organisational agility”

Comments

Bob Williams

I’m curious what you see as the primary reasons for slow decision making? Is it decision by committee suffering from group-think? Is it a individual that has a tough time taking accountability for a decision?

Thanks in advance,

Bob Williams

March 27, 2010

Matt Sims

Thanks for the comment Bob, good question.

The reasons differ quite a bit obviously, depending on the organization and the specific type of decision at hand. But if I had to pick one, I’d say it’s the difficulties establishing a quantified set of common values to a decision scenario. In other words, a model. Each person in the room often has their own information set or inventory of the relevant factors (mental modelling), and more critically, their own set of assumed relationships between them. Here’s an example:

Let’s say there are four factors in a decision, A, B, C and D. Someone might be missing C if it hasn’t been explicitly identified. Even if everyone has all the factors accounted for, how are they valuing the relationships between them? Does a change of 1 to A double C? Does A even affect C at all? This is simplistic but you see where I’m going.

Figuring out how everyone sees the situation can be quite arduous if it’s done ad hoc each time. If a decision goes to implementation and the mental models differed, those differences can (and likely will) surface later as consensus killers. This is just my pick of course, there are many other reasons such as the ones you mentioned.

Hope this was helpful Bob, thanks again for your comment.

Matt

March 29, 2010