Special 5-Day Report

More Preconditions for Successful Decision Making

by Kepner-Tregoe

Kepner-Tregoe's survey of decision making in the digital age identified seven preconditions for successful decisions. To date, we have identified three. The fourth and fifth of the seven are Recontextualization of Decisions and Humanized Networks.


IV. Recontextualization of Decisions

Where should the responsibility for making a decision be lodged? It's a tough question and one that Decision Leaders continually grapple with. In today's fluid environment, where companies routinely reinvent themselves, there's no enduring answer.

Decision Leaders ask two questions to help them determine who in the organization should make a decision. The first is, "Who has the most relevant information about the customer or market?"

For example, Johnson & Johnson has long been a decentralized organization. But they're now taking decentralization a step further. Michael Carey, vice president, organization planning management, explains: "We now have, in each of our franchises, regional product supply and local or country marketing and sales groups. And, our worldwide R&D team includes representatives from all geographical areas." Mr. Carey goes on to explain that the chairman of one J&J franchise, women's health, is based in Latin America and has staff around the world. However, the groups who develop the global strategy for this franchise are based in New Jersey, where the information and expertise lie."

The second question that Decision Leaders raise to determine the level at which a decision should be made is " Who will be responsible for implementation?"

After all, it's at that point of interface between making a decision and acting on it that speed and effectiveness count most. At AES the traditional distinction between decision maker and implementer has been obliterated. There are advisors and decision implementers. Here's the rationale that Dr. Roger Naill, vice president, offers, "The person that is closest to the decision and has to implement it is the decision maker and the rest of us are advisors. In the traditional organization, the CEO makes a decision and then hands it down the line to be implemented. But, since those implementers weren't involved, how committed can they be to the decision? They drag their feet and nothing gets done. We turn this approach on its head: Allow the person who has to live with the decision to make it and you gain commitment and eliminate delays."

Recontextualizing the decision-making environment is not merely a matter of passing the baton to a wider number of decision makers in an organization. It is also important to look at the performance environment in which decision making plays out: the roles and responsibilities, skills, tools, and rewards that accompany each job. There's nothing new here, except this: Decision Leaders put the rhetoric into practice.

When Anthony Iorio assumed his position with Citigroup Global Technology Incorporated, he found that employees were reluctant to take personal responsibility and favored decision making by committee. From the beginning, he made it clear that this was not his way of doing business. Mr. Iorio also recognized that the only way to ensure quality decisions in a face-paced organization is to have qualified people. The training practices he put in place are typical of all our Decision Leaders: "You can't expect a quality decision, especially under time pressure, from someone who isn't qualified to make that decision. An important part of managing people is giving them the training that will enable them to make good decisions. I provide my people with as much training, in as many areas as possible, to give them the background they need: leadership training, training in how to manage technical people, how to bring about change. . . ."

By their decisions, ye shall know them. Good decision making may well be the ultimate test of an employee's mettle. But what's the measure of a good decision? Decision Leaders use measures not as a straightjacket to restrain decision makers but as a means of giving them more elbow room in which to operate


V. Humanized Networks

Technology matters. Without question it can speed up decision making in many ways, from providing instantaneous access to vital information to facilitating communication among team members in different countries and time zones. Our Decision Leaders have utilized technology to compress decision-making time in a number of areas. Both Ingersoll-Rand and The Home Depot, for example, have revolutionized their hiring process by using computers to disseminate information about job openings, attract applicants, and match the two.

However as much as technology matters in the digital age, people matter more. Decision Leaders are keenly aware of the need to maintain a healthy equilibrium between "high tech and high touch." They make wide but judicious use of digital-age avenues of communication, which for them will never replace human interaction.

The executives whom Kepner-Tregoe interviewed were keenly aware of the limitations of technology. As Fuji's James Soniat observed, "E-mail and other forms of electronic communication are strictly one way. You're not really communicating; you're just passing along data. When you are trying to share ideas or make a decision, it's the wrong way to do it."

The fifth and final article in the series will analyze the sixth and seventh preconditions for successful decision making: connectivity through process and organization memory.

A complete copy of the Kepner-Tregoe report "Decision Making in the Digital Age" can be purchased for $395.00, plus shipping and handling, from the Kepner-Tregoe web site (www.kepner-tregoe.com). Or contact Dolly Weldon-Gordon at (609) 252-2665 or via e-mail at dweldon-gordon@kepner-tregoe.com. For more information about Kepner-Tregoe, contact Dr. Peter Tobia, via phone (609) 252-2634 or e-mail (ptobia@kepner-tregoe.com).