Where Are Decisions Made in Your Organization (And Why Does It Matter)?by Susan Nemetz, August 2019
Can you draw it?
At your next company lunch and learn, try this experiment: Ask ten people from different functions to take a blank piece of flip chart paper (assuming you still have flip charts!). Then ask them to draw a picture of how key decisions are made in your organization.
You might even give them a prompt by suggesting five substantive decisions that impact the success of the company or team and asking them to draw a picture that illustrates the forums (or individuals) that make those decisions and how they interact.
If you end up with a pile of extremely complex and only vaguely similar “spider-web” diagrams, you are not alone. In our experience, decision-making is one of the blurrier aspects of our biopharma culture. Despite our industry being precision-based and data-driven, most companies don’t bring that same attention to our governance and decision-making processes.
With Good Leadership, “Governance” Is Not to Be Feared
Recently, The NemetzGroup team members participated in an internal meeting on the topic of decision-making. We shared examples of what we see in the field and how various team members support clients in effecting positive change in this area.
We began with a discussion of “terms.” The umbrella designation for decision-making and accountability is governance.We know this term has a legal definition in public boards, but it also has relevance in any multi-faceted organization.
Unfortunately, in that context, this word carries with it some “emotional baggage” — most common is the view that governance is antithetical to the entrepreneurial prerequisites of flexibility and an inclusive culture. New companies, in particular, may see it as introducing a headwind in pursuit of goals. And, by its very definition, governance introduces hierarchy and process, something which many people left larger organizations to escape.
The truth is, if we adopt the dictionary definition of governance, these feelings are not unjustified:
“Establishment of policies, and continuous monitoring of their proper implementation, by the members of the governing body of an organization. It includes the mechanisms required to balance the powers of the members (with the associated accountability), and their primary duty of enhancing the prosperity and viability of the organization.”
And yet, given our constrained resources and the highly regulated environment in which we swim, some level of governance (even for start-ups!) seems to be wise. (BTW, I have always been a fan of mixing my metaphors!)
A Better Question to Ask
At the risk of oversimplification, the question at the heart of this is, “What decision are we going to make, by when, and who will make it?”
An essential add-on might also be, “How do we ensure the decision sticks after the meeting?”
As straightforward as these questions may be, for many organizations, it’s difficult to create, let alone manage, the decision-making process and define a governance approach. This may be due to any number of internal factors, including:
- A reluctance to insert the dreaded “process” into a fast and growing culture
- Leadership personalities who either swoop in to make key decisions or, at the other extreme, demand too much input and consensus
- A lack of clarity on roles and responsibilities, especially as new people are added to the team
- A lack of definition (or even discussion) of risk tolerance in the context of empowerment to make decisions
- Competing priorities across disciplines (“The decision I need is not the one that you have time/interest/information to make.”)
- Forums for decision-making that do not exist or are not refreshed as the company changes
- Complex organizations filled with those pesky humans
A Client Example
Our team had a recent experience in helping a large biopharma client streamline and improve its decision-making processes related to its product portfolio. We began by interviewing senior and mid-level leaders, using those discussions to create a visual representation of how and where decisions are made.
The results were eye-opening for all involved:
- Lack of a complete picture. No single person in the organization, regardless of where they sat, was able to articulate the entire decision-making process.
- Lack of agreement. Every additional person who was shown the graphic had suggestions for more changes and corrected modifications made by their colleagues.
- Lack of prioritization. The people who reacted most positively to the output of the exercise were those who needed decisions made. Others – often senior leaders who were accountable for acting on these decisions as part of their responsibilities – questioned the utility or transparency of the exercise.
Steps for Improving Decision-Making in Commercialization and Beyond
Depending on the size of your team and the challenges you face, there are opportunities for seeing and improving how decisions get made in your organization:
- Ask the questions. It’s easy to get lost in process for its own sake. Keep asking the essential questions that need answering: What are we trying to accomplish here (vision, objective, strategy)? What decision does this process inform? What decision do we need to make and when? Who will make this decision? How will the decision be adhered to and communicated?
- Create the space. Good decisions require involving the right people (and excluding those who are not needed). Give the team the latitude to study the necessary inputs and consider all options, along with the expectation that they will present these to others.
- Draw the picture. Everyone in the organization needs to understand the teams, forums, and decision-makers — how they function, how they relate, and where to go for decisions. As the company grows, revisit, update, and communicate it — annually at minimum. Use the opportunity to take a pulse check to identify frustration and inefficiencies that can be remedied in the refresh.
- Track the results. Keep track of decisions made and the thinking involved. For big decisions, always include the underlying assumptions.
- Support and teach. Good decision-making is a learned skill — so teach people how to do this well. Support the team when good decisions are made; correct missteps (in a non-punitive way) when they are not. Teach people to recognize when the stakes are high and more care is needed, versus when the decision just needs to be made.
Whether we call it governance, decision-making, or something else, the process within an organization by which resources are allocated, priorities are communicated, and steps forward are taken, has a far-reaching impact on its efficiency and, in turn, its profitability.
Understanding how this process works within your organization and taking actions to improve and communicate a more streamlined approach can yield significant benefits, today and in the future.
Posted in All Categories, Decision-Making and Process, Organizational Development and Culture