Category: Governance

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Complexity Governance Leadership

The Art and Science of Decision -making

Photo by Kyle Glenn

The cultural norm in business today is all about building consensus before making a decision. Sounds lovely but building consensus is an art and it frequently creates so much complexity. The simple reality is that the goal of decision making should be for leaders to review the facts and relevant opinions and then make a quick decision. The science of decision making. The truth is that good decision making is both an Art and a Science. You won’t really know what the right decision is until after you have actually made it. All you are doing is making a choice from a series of options. The hard part comes after your choice; making it work.  

Leaders are responsible for creating and sharing an organized decision-making process. That sounds somewhat formal, but it doesn’t mean that it has to be rigid, cumbersome, or time consuming. It is simply an understandable framework for the organization to establish the basic “rules of the road” when it comes to making decision. Decision rights, delegation of authority, and RACI (Responsible, Accountable, Consulted, Informed) Models are all considered as great tools to avoid chaos and confusion.

Having a decision-making process is crucial for all organizations. However, if it is too cumbersome and time consuming it will stall the organization. Too simple and you run the risk of making the wrong choice. In both cases the impact shows up in outcomes, engagement, and overall effectiveness.

Any decision-making process should include clear objectives about the situation and incorporate input, insights and knowledge from key stakeholders. In thinking about key stakeholders keep it simple by considering three groups of people; Who cares about the decision? Who has knowledge about the issues and alternatives? and who needs to agree to the decision?

These three groups of stakeholders not only help you make the right choice, but they also help in making sure that the decision is implemented. Their participation in the process engages their commitment to see it through, which is probably more important than the decision itself. As they say, an average choice well executed is often better than a good choice poorly executed. 

Making choices and executing them go hand in hand. What is important is the commitment to the decision. Commitment is different from consensus. Consensus is a general agreement, shared by all the stakeholders, about a decision. Commitment is a promise to make the decision a success. Commitment is saying, whether you agree with the choice or not, that you will personally do everything you can to make it a successful.

Engaging the three groups of stakeholders to gain commitment can be difficult. We use four exercises to help with the visualization and ownership of the decisions to be made. The first is to imagine and share as a team what success looks like for of each decision alternatives, post implementation.  Think in vivid color. Make it the art of the possible. The second is to think about the unintended consequences of the choice. What might be the second and third implications of making the decision. Consider the impact on customers, employees, standard operating procedures, technology, etc. A third exercise is to think about failure. How could this decision make things worse, what could go wrong, what would be the implications?  By articulating the failure scenario, we begin to understand potential risks, develop balance in the execution, and gain clarity on the path forward. Finally, we use an assumption-based exercise to help build commitment. Asking the question “What would need to be true in order for this choice to be a success?” This is a simple yet effective way to work through assumptions that stakeholders are making when considering the options in front of them.

Using our three stakeholder groups and four exercises can help to build commitment. Even when making unpopular decisions this method allows for due process; listening, inclusion and consideration of alternatives which leads to better choices and improved execution. Moreover, these techniques keep the decision-making process relatively simple and avoids a complex consensus driven approach. 

The final takeaway:  The cultural norm of today may be to gain consensus but that doesn’t equate to successful and actionable decision making.  What does? Commitment to support a decision once made, regardless of personal views and doing all that needs to be done as a team to implement that decision is the key to success.

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Categories
Complexity Governance Leadership

Governance & Decision Making in a Complex World

Most organizations go through a formal decision-making process when they allocate resources to a particular initiative or when they develop an annual capital plan. Whenever we chose to allocate money or people to something, organizations typically follow a familiar three step process.

Learn

During the learn phase we are gathering data, building knowledge, and curating information on both the problem at hand and potential solutions. Our goal is to articulate the problem, offer a series of potential solutions and maybe articulate a recommendation or a preferred option.

To achieve this, first we spend time to learn about the presenting issue. We conduct extensive research, do analysis, run focus groups and interviews to make sure we fully understand the issues and problems that need to be solved. In a nutshell, the goal is to figure out who our customer is, what needs they have, and how best can we serve them.

Second, once we have identified the issues, we can begin to look at alternative solutions. We analyze the various merits of each solution and develop a cost benefit analysis of each option so we can think about how to best make a recommendation. If our solution includes a third party, for example a piece of technology or software, we will likely do additional diligence to measure things like functionality, integration, and relationships. We’d be inclusive of different stakeholder groups so that we had the opportunity to obtain a broad set of inputs on the final set of answers.

Finally, we prepare our presentation with our findings and recommendation.

Decide

Decision rights for capital spending typically sit with an executive team or a subset thereof. The team doing the “learning” will make their presentation to the executive team and make their recommendation. Usually there is some back and forth discussion, maybe the team has to go away and answer some additional questions but eventually the decision is made to either support or not support the capital allocation.

Act

Once approval has been obtained the team can then move onto the implementation of the solution. The work to solve the problem can now begin.

The Problem

As you can imagine this governance and decision-making process takes a significant amount of time. There are four distinct problems with this approach.

First, with a fast-paced business environment and innovation driving new ways of working, new technologies, and new possibilities it’s more than possible to create capabilities that don’t meet future needs. 

Second, the learn phase never quite achieves what you intend it to. There always seems to be a series of “gotchas’ during the act phase. These lead to budget overages, time delays, and the reduction of scope. This is because we don’t know what we don’t know and only through experience can we solve this paradox.

Third, the learn phase doesn’t typically consider the difficulty in driving adoption of a new capability. Skills may need to be developed, behaviors changed, and reliance on old operating procedures need to be undone. 

Finally, according to the National Training Laboratory, action-based learning results in three times the retention and understanding as passive based learning, Acting therefore contributes more to learning than simply reading or researching.

An Alternative

One of our principles is to move into action sooner rather than later. We encourage clients to learn by doing so they can better understand the presented issues, potential solutions, and behaviors that will need to be changed to drive adoption of the new capability. 

Another principle we live by is to break down a problem into more manageable chunks and work to solve each of them over time. This is grounded in the fact that you want to avoid any kind of “Big Bang” implementation. Better to implement a series of smaller changes rather than one large one.

We prefer a series of small success rather than a death march that results in mediocrity.

Our suggestion therefore is to change the governance and decision-making process to help improve adoption, reduce risk, and create momentum

With the overall goal in mind, work towards taking smaller steps, learn as you go, and then decide which appropriate steps to take next. This iterative approach allows you to uncover and resolve what you don’t know about what you don’t know.

Categories
Behavior Governance Leadership

Me, You, and We – That’s Corporate Culture

Image credit: Charles Schulz

Our emerging framework for dealing with complexity, based on our research, identifies four components that influence behavior in an organization: Strategy, Decision Rights, Structure, and Communication. Each of these areas impact behaviors, either individually, in teams, or as leaders. Our research indicates that individual behavior is the most important driver of performance and the most consequential obstacle to achieving success. The tenet of individual behavior is embodied in organizational culture.

When you join an organization, there is always a reason.  Whether it’s professional or personal, you joined because something or someone in that organization appealed to you and you wanted to be a part of it.  That appeal means you felt you identified with the organization, believed you would fit in and that you would both add and get value from the experience. 

On the flip side, the reverse is also true and in those circumstances, you didn’t join or you joined for a while and then realized the fit was not a good one and left.  Of course, this feeling of “fit” and  “belonging” is a two way street between you and the individuals in the organization. So, what is this mystical “thing” that creates belonging and good fit?  It is organizational culture. 

Culture isn’t the same in every organization and nor should it be.  However, there are some key characteristics that are involved and should be established at the onset.   Those organization-wide basics (I call them the “ForHs”) are:

  • How things are done 
  • How people are empowered 
  • How continuous learning happens
  • How we honor, recognize and support each other  

It is critical that these basics are clearly communicated, understood and embraced by all who make up the organization’s ecosystem.  It is also critical that these basics should have the flexibility to stretch and flex to stand the test of times of change, growth and crisis. 

Right, easy for me to say but if you are still reading, you need me to go beyond this “simplistic” (Blog post “Simple vs Simplistic, July 10, 2020) narrative to something simple, yet effective, and actionable which in turn makes positive change that you can see.

The ForHs make up a universe of possible rules, values, and behaviors.  Let’s scenario plan how a refresh and reset of corporate culture could be actioned.  I would suggest getting a cross functional but small group of highly motivated individuals together.  These individuals should also be a mix in terms of ethnicity, gender, LGBTQ, generation, experience and seniority. Let’s include skeptics at the table too and an added bonus:  if the CEO is at the table and participates with enthusiasm and openness.  

Think about kids who are handed paint and paper and told to have fun painting.  The possibilities are endless!

Getting started is always the hardest part so to make it easy, the very first goal should be to chronicle the Culture ForHs of the organization. It doesn’t have to be a science project or end with a fancy presentation.  It’s literally everyone contributing to capture the current state. It helps to think about the framework of the ForHs in two buckets for each category, tangible and intangible.  Start with the tangibles as those are concrete and therefore somewhat easier to tackle.

An example of the tangible bucket in “How things are done”,  include the rules, expectations and policies often codified in official documents such as employee manuals.  Examples include safety and security standards, code of employee conduct, training, recruiting practices, on-boarding practices, reward and recognition, career development, etc. After capturing the current state the next step is to debate and align around.  Are these still the right rules, are the consequences for straying from these tangible norms relevant today and how are they enforced?  It is so important to not only say that as an organization we are committed to the fairness, protection and well being of our people, it has to be shown in action.  So as you can see tangible policies and actually following them equally to and for everyone matters deeply.

The intangible bucket for each of the ForHs is harder because this is where magic happens. It’s the really impactful and empowering piece.  This is where a huge shift can be made in the enhancement of an organization’s culture and empowerment of its people.  

One way to start the process is to ask people to transparently articulate what they believe the organization stands for.  Basically, what are our beliefs, values, and attitudes?  What are we all about as an organization?  Then have everyone put what they feel is their “elephant in the room” on the table.  It’s important to encourage this because it is in the unspoken that the real nuggets of change exist.  I love working with senior executives who are honest, open and can laugh at themselves and tell stories about when they stumbled.  Be vulnerable in this process and the outcome will be spectacular! I always enjoy the sessions when I share my “stories”.  The reactions veer from “I can’t believe she just shared that” to “Now, I know I can become a senior leader in the firm too”…..the latter being the outcome I am always seeking for when working with and mentoring others. 

Once the tone is set it’s important to also have uncomfortable discussions.  Let’s just dive into one scenario dealing with diversity and inclusion:   The company just wrote a big check to support ending racism and to provide opportunities to the under-privileged. Yeah for us!  But what are we actually doing about it? Not everyone is supportive and the ecosystem of all organizations have many dissenting views.  How do we do the right thing, yet also arrive there by having the tough and open discussions?  Yes, it is all about allowing people to be themselves and it is every individual’s responsibility to become more open to learning about differences, respecting those differences and understanding how to work together collegially.  That’s what  diversity and inclusion is about.   People make that happen.  Policies and actions that actually and  visibly support and empower individuals who are doing the right thing allow inclusive behaviors to thrive and in the process the organization thrives.

Hopefully these examples are good catalysts to start addressing the ForHs of your organization’s  culture.  Once this effort is complete, share the outcome and decisions all around the organization. This effort should have been a very visible effort and hopefully the rest of the organization was anticipating the outcome and their opportunity to comment with enthusiasm or at the very least, with interest.  Of course there will be the skeptics.  Such a powerful group of individuals.  When you show skeptics that you hear them and then show them that change is happening, they become the most empowered and energized supporters and advocates.

Today, because of COVID-19 we are all part of a huge global social and work experiment.  Therefore engaging and reshaping organizational culture needs to be done. For example, it’s simply not enough to have people working at home and to hire diverse candidates.  Even in the virtual scenario, there has to be empowerment to allow individuals to speak up, contribute and be heard.  They should be able to take risks,  fail and learn and grow from those risks and mistakes. That has to be a part of the new normal because people are still the most vital asset of any organization and culture allows them each to grow into leaders and change agents not only in the organization but in their communities.

Finally, culture is a living breathing thing. Think of it as a garden.  If left alone you end up with a tangled mess of weeds and dying plants and trees.  So like any good gardener who constantly nurtures and cares for a garden, organizational culture needs constant attention and reinvention to stay relevant and powerful.

Categories
Behavior Complexity Governance Process

Data & Analytics

The one question you should ask yourself when thinking about your data.

Photo by Franki Chamaki 

An ex-colleague, Andrew Hombach, asked a fabulous question that I thought I would share with you. Andrew and I worked together at Ironside, a data and analytics consulting firm in Lexington, MA, and he now works as a Customer Success Engineer at Databricks. Smart individual, as you will note below.

We were working on a thought leadership article on Data & Analytics Strategy and we were trying to think of simple ways to articulate the challenge that executives face in the complex world of data and analytics. Here is the question he said we should ask.

“If you found a problem with your data, who would you go to to have it fixed?”

It’s the kind of question that makes me wish we were still working together. Simple, insightful, and yet challenges us to think through and acknowledge how complex our business or functional areas really are.

This was frequently validated when we asked executives and leaders the question. What I have found, is that the question, and not necessarily the answer, leads to a great discussion on issues such as data governance, data security, and reporting often resulting in actions that make progress along a data and analytics journey.

While the most common answer seems to be “I haven’t a clue, we have [insert name] who takes care of those things”, I have been impressed more recently in talking with a few data driven executives who know exactly what they would do. They break the mold and are learning to live by the data as a way to inform their intuition.

For illustration purposes let’s walk through an example. We could use any data set you chose; product, supplier, customer, employee, financial, etc. We’ll use customer data because it’s easy to follow. 

You may have more than one record for a customer, each may be incomplete or incorrect. For example, a customer moves house and you don’t have their correct address, or changes a phone number, has different spellings of his or her name (first and/or last), different credit terms, billing address, shipping address, etc. There are plenty of ways in which the data could be inaccurate and/or duplicative.

If the data is inaccurate, it more often than not leads to poor customer experience at any or many points along the customer experience life cycle. The cost of poor customer experience could be the loss of a customer, reduced repeat business, and/or lower social media ratings. Furthermore, it impacts your operational metrics; everything from length and number of calls to undelivered product and there’s no way of knowing how frequently issues really occur, unless you track customer incident rates.

The simplicity of the question isn’t about the 99% of the time that you get it right. It’s about the exceptions and it asks you to think about the policy, procedures, and processes you have in place to fix the exceptions. Most organizations don’t rely on standard procedures to identify, decide, and solve, for data inconsistencies. They tend to be more ad hoc and rely on the first line of customer service channels to identify and fix any data issues.

We’d love to hear from you. 

How would you answer Andrew’s question? What follow up questions would ask? 

Take a few minutes to consider it and maybe ask this question in your next data governance meeting. It will be interesting to hear your team’s answers and observations.

For the courageous, let us know your responses and we would be more than happy to act as a sounding board for your reflections.