153 – Decision making: Some challenges for local government.

Posted by Lancing Farrell                                                                              580 words

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This is the third post in a series.  Sometimes making decisions is difficult and a guide is helpful. Local government has some particular types of decision making that frequently present challenge. These decisions need to involve the right people at the right level in the organisation. Often they cut across functional areas.

Two of the key challenges for local government in becoming a decision-driven organisation are whether or not to centralise decision making and how to ensure cross-functional cooperation in decision making. I will start with centralisation.

Centre versus business unit decisions

Decision making needs to involve the right people at the right level in the organisation. If too many decisions flow to the centre, decision making can grind to a standstill, especially if the decisions elevated to senior management are the wrong ones.

This sometimes occurs as an organisation’s operations become more complex (i.e. through growth or diversification). When this happens, senior management can no longer master the details required to make decisions in every part of the business.  It can also happen with a change in management style at the top, for example a new CEO who is more focussed on consensus instead of making the decisions themselves.

Function versus function decisions

Decisions that cut across functions are some of the most important (and most difficult) decisions that an organisation must make. Cross-functional collaboration is important in determining the best solutions for customers (i.e. the solutions that provide the greatest value). Making ‘fluid’ decisions (i.e. responsive and fast) across functions is a constant challenge.

A function making a decision that is made more efficiently without consulting other functions may miss out on relevant input or be overruled by another function that believes they should have been involved in making the decision.

It is important that there is an in-depth understanding of where value is created within the organisation and that decision roles are assigned accordingly. For example, those who understand how value is created for customers should be leading the recommending process and those who will potentially have their role in value production diminished by a decision should have right of veto.

Rogers and Blenko provide some principles to guide decision making. They believe that the decision-driven organisation will understand that:

  • Some decisions matter more than others – they are the decisions that are more critical to producing or adding value.
  • Action is the goal – good decision making ends with action. The goal isn’t consensus, but buy-in during the decision making process.
  • Ambiguity is the enemy – clear accountability is required. This doesn’t mean concentrating responsibility for decisions; it does mean defining who is responsible for each of the RAPID roles.
  • Speed and adaptability are crucial – making good decisions quickly allows organisations to act on opportunities and overcome obstacles. The best decision makers create an environment where people can come together quickly and efficiently to make the most important decisions.
  • Decision roles override the organisational chart – no decision making structure will be perfect for every decision. The key is to involve the right people at the right level in the right part of the organisation at the right time.
  • A well aligned organisation reinforces roles – clear decision roles are important but are not enough. The right approach to decisions making needs to be reinforced through measures and incentives, information flows, and culture to make the behaviour routine.

The main message is to involve the people who will have to live with the new decision roles when designing the decision making process.

Rogers, Paul and Blenko, Marcia 2006. ‘Who has the D? How decision roles enhance organisational performance’, Harvard Business Review, January.