Churchill once said that “I never worry about action, but only inaction.” He was right in more ways than we can imagine. If you take a look around the best governments and organizations you will find that they learn fast and then respond quickly to their citizens or market conditions.
Time is of essence for every individual, business or Government. One of the biggest arguments against democracy these days that it is slow, boring and exhaustive. But here is another example from Switzerland.
Switzerland has a very direct style of democracy. For example, changes to the constitution, or “popular initiatives,” can be proposed by members of the public and are voted on if more than 100,000 people sign them. If a majority of voters and cantons (Swiss states) agree, the change can become law.This system not only allows individual citizens a high degree of control of their laws, but also means that more unorthodox ideas become referendum issues.
Recently, there has been a spate of popular initiatives designed to curb inequality in the country. Earlier this year Swiss voters agreed to an idea proposed by entrepreneur Thomas Minder that limited executive salaries of companies listed on the Swiss stock market. Next month voters will decide on the 1:12 Initiative, which aims to limit the salaries of CEOs to 12 times the salary of their company’s lowest paid employee.
Another popular idea these days is giving every Swiss adult a “basic income” that would “ensure a dignified existence and participation in the public life of the whole population” gained enough support to qualify for a referendum. The amount suggested is 2,500 francs ($2,800) a month. The unconditional income in Switzerland means that a third of the GDP would be distributed unconditionally. Now, imagine the same proposal in the US system. It would cause heavens to fall.
All these radical ideas would be voted yes or rejected but that is hardly the point. The point is that quick and effective decision making ensures that all ideas get a chance to be heard and analyzed quickly and if an idea is not good enough then you move on to the next idea. We call this pivoting these days in business strategy.
A decision cycle has 7 (seven) stages in my view and the quickly you move to the next stage the better it will be for your business or government.
- Identify the core problem/core opportunity
- Brainstorm your options
- Analyze Options
- Make a Decision
- Take Action
- Review Results
- Implement changes
US Government for example is massively struggling these days with decision making. US constitution was unfortunately written to safeguard against British and it has too many checks and balances. Their structures have become shackles. Congress this Wednesday voted to re-open the government and extend its borrowing authority through February of next year. But the deal did nothing to resolve the underlying disputes that led to the crisis in the first place – leading many to fear that the standoff may play out again in a few months. The plan sets up a forum to try to forge a more permanent budget deal, but few expect it to succeed. Many corporate executives and economists seem to agree on one point: the biggest risk to the world’s largest economy may be its own elected representatives. US Executive and Legislative branch is not acting swiftly enough to the demands of an economy which is still not in growth mode. I personally don’t care much whether a government is elected or selected if it is a responsive government. What is democracy if it is not responsive or cannot make tough and right choices for its people?
Same is true for businesses in general. When a growing business struggles with decision making, the results are evident. The organization loses its nimbleness and its ability to move quickly.
To resolve this debilitating problem, a business must create an organizational structure for making and implementing decisions, one that accounts for the complexities of a growing business. As a company gets bigger, major decisions affect and are affected by other interrelated parts of the business, and call upon the collective knowledge, experience, and expertise from all areas of the organization.
The first step is recognizing that the freewheeling, spontaneous – largely centralized – decision-making process of a smaller company won’t scale to produce effective results in a bigger, more complex organization. A business needs to create a systematic process for making decisions with just enough structure to ensure consistency across the organization — and no more. It’s critical that you do notcreate a rigid bureaucracy that will diminish the entrepreneurial qualities of innovation, flexibility, risk-taking, and initiative that made the company successful in the first place.
Successful growth companies employ a decentralized decision-making structure that distributes responsibilities and decision-making throughout the organization. This ensures that decisions are made at the most appropriate level – by the people in the best position to make and implement them. The result is a faster, more effective decision-making process.
Decision-Making is also dependent on the clarity in structure and responsibilities.
Clearly communicate the structure of the organization so that everyone understands who has the responsibility and authority for what and why.
Hold everyone accountable for results through a formal performance-management system.
Ensure managers work laterally with each other, in addition to working vertically with their direct reports and supervisors.
Eliminate or refine any procedure or process that slows decision making.
Promote decision making at all levels of the company with a decentralized management style that pushes responsibilities and decision making down the organization.
Decisions don’t happen in a vacuum; the best ones rarely come from deep pondering in isolation. They happen when people learn from and draw on the experiences of others. In this process, success depends greatly on the quality of social exploration—and on whether your information and sources of ideas are diverse and independent. I always try to look at the end game and six or eight moves ahead before taking a decision. Always begin with the end in the mind.
I started this article by quoting Churchill so it is fitting that the article also ends on another one of his sayings which is also on the spot in my opinion. “The only guide to man is his conscience; the only shield to his memory is the rectitude and sincerity of his actions. It is very imprudent to walk through life without this shield, because we are so often mocked by the failure of our hopes and the upsetting of our calculations; but with this shield, however the fates may play, we march always in the ranks of honor”
The road to hell, we’re told, is paved with good intentions, judicious decisions and exhaustively analyzed strategies. Wars have been lost owing to unexpected weather conditions and many other factors which are beyond your control any way. Fast is beating slowly every day. David is beating Goliaths every day. If you have made a bad decision at least you will know quickly to rectify it. There are no 100% guaranteed correct decisions any way until results verify your actions/decisions.
Bottom line: Avoid paralysis by analysis. Act, examine your results, make adjustments, and move on.
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