Are You Controlling Too Many Decisions in Your Organization?

BY Kathy Crosett
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Leaders know they are ultimately responsible for decisions made by people in their organizations. But no leader should be involved in every decision that must be made. How can you determine which decisions require the attention of senior leadership?

Victoria Medvec, Professor of Management and Organizations at Northwestern’s Kellogg School of Management, says many organizations allow leaders to spend too much time "making low-​risk decisions." If your company hierarchy is set up for senior leaders to consider and approve every decision made by lower level employees, you’ve got a problem. You’re wasting valuable resources that should be spent on other activities – like generating new product ideas or engaging in developing partnership activities. At the opposite end of the organization, you’re not allowing your employees to develop the confidence that comes with making decisions and learning to live with the outcomes – bad or good. When you insist on looking over  employees' shoulders, you’re telling them you don’t trust them to do the right thing.

Medvec also point outs that, "Most people tend to overestimate the risk of making a bad decision and underestimate the risk of inaction." If you’re inserting yourself into the hiring process of  lower-​level employees in a large organization, instead of analyzing the costs and benefits of acquiring a product from a struggling competitor, your decision-​making process needs an overhaul. This an example of Medvec’s point. If the new employee doesn’t work out, your middle manager can show them the door and hire someone else with little organizational risk. If you delay acting on a product acquisition and lose the opportunity as a result of dithering instead of deciding, the cost to the organization could be significant.

Force yourself and your senior managers to focus on big decisions. Of course, these decisions are difficult and time consuming, and that may be why you are shifting attention to the easier decisions. To make the difficult decision-​making easier, establish parameters for levels of certainty. When you can all agree on how much certainty is needed to make key decisions, you’ll find that initiatives and the organization will move forward.