Tuesday, June 26, 2012

Decision Rights: Define them or die!

At first glance, Gary Neilson, Karla Martin and Elizabeth Powers' conclusion that "decision rights" are the most influential determinant in successful strategy execution might seem surprising – or downright counterintuitive.

But if you've ever worked for an organization, it rings true.  The common phenomenon of blurry, ill-defined decision rights has hampered many organizations, including the one for whom I work now.

Perfect example:

A division head, in consultation with the people in her department, decides to change a policy that was hurting revenue growth.

The division head then went up the ladder and talked to an executive who might have been inclined to oppose the change. But after hearing from the division head, the executive reluctantly authorizes the change.

So the division moves forward and changes the policy.

Unfortunately, this is not the end of the story.

The executive subsequently tells the president of the organization that he opposes the new policy. So the president blocks the policy change, and  doesn't tell the division head.

The division head only finds out about the veto weeks later.

I'm being particularly vague to protect the reputations of the people involved, but this is a true story.

Why was one executive able to veto a policy change? Why didn't it go to the board of directors for a vote? Why wasn't the veto immediately communicated to the division?

Needless to say, this caused great frustration within the affected division.

The lack of a clearly defined process for making the decision led to a poor decision and low morale.

It might be inconvenient and time-consuming to develop clear protocols for decision-making, but it will save your organization a lot of aggravation down the road.

So it doesn't surprise me in the least that clearly defined decision rights correlate so closely with successful strategy implementation.

What is your experience with decision rights? Would you agree that it is the most influential determinant in the success of strategy implementation?  

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