Improving organizational agility starts with pushing decision-making as close as possible to the edges of the organization. By edges of an organization, we mean the team members that are interacting firsthand with customers, suppliers, partners or with machines on the shop floor or code on the computer. It is the point where tangible value is sourced, created or delivered.
Since they notice changes in user or supplier scenarios first, equipping them with the right tools to make decisions will enable the organization to respond fast to change. Traditional and hierarchical organization constructs vest decision-making power at the top/center of the organization. In other words, in places that are farthest from the end user or supplier. This results in delayed and suboptimal decision-making, thanks to a lack of engagement and responsiveness to feedback on such decisions. By the time information filters up and down the hierarchy, it gets distorted and compromises the quality of the decision. With agile, organizations have already found a way of vesting decision-making power with the teams. Although this is a great first step, it’s not an easy one. Especially, when teams are used to following orders instead of making choices, it takes a fertile ecosystem to foster good decision-making skills within them. The following four factors are critical in enabling a team to make BIG (Business Informed Good) decisions:
What are the boundaries within which the decision should be made? This awareness gives teams an idea about the constraints they need to keep in mind when making a decision. These boundary conditions are typically non-violable requirements for the organization, such as quality, customer satisfaction, legal compliances, or mandatory functional requirements etc.…For software teams, this could be interface requirements or standards to be adhered to; performance criteria to be met; hardware (CPU / Memory) resource constraints and so on. Knowledge of these conditions enhances the courage of the team, giving them the confidence that the decision they make will not jeopardize what is valuable to the core of the company. Teams new to decision-making can sometimes be paralyzed into inaction for fear of breaking larger organizational commitments. These conditions provide them the “bounds” within which they can operate safely.
The team needs to have access to all relevant information available in the organization. Organizations that manage their information well by making it simple, easy to understand, well organized and accessible tend to make better and faster decisions. The more information can be shared, the better. Information need not be limited to just technical or functional aspects – it should encompass both business and commercial aspects. This empowers teams with a good understanding of the overall context of the work they do and instils in them a sense of purpose and ownership. It also forms the basis for establishing a learning organization. Information that is complex to understand should be simplified and shared in ways that teams can understand. Such sharing builds trust and busts bureaucracy.
Goals or Key Performance Indicators (KPIs) of the organization must be well understood by the team. It is best to keep the list of goals short and simple. A multitude of goals will lead to lack of focus and confusion. KPIs should also be framed in a manner that can be understood by every member of the team. Once the goals are understood, team members should be aware of how their team goals align with that of the organization. Any decision the team makes should be aligned with the organization’s goals, as defined by its KPIs. This should act as the North Star for the team as they navigate their way through possible alternatives before arriving at a decision.
The fourth element of the model is Psychological Safety. It is very likely that teams will struggle with decision-making initially. Decisions may be delayed or end up being sub optimal. Such instances are inevitable while the team builds its decision-making muscle. These setbacks can lead to learning only if there is psychological safety in the team. In the absence of safety, teams can develop an aversion towards risk-taking and may play it safe always. Typically, when a mistake is made, the tendency is to place the blame on external factors instead of introspecting and treating the failure as a learning opportunity. For example, let’s say a newly formed team fails to meet the sprint goals it had decided upon. In the absence of Psychological Safety, the first tendency of the team will be to scale down the goals for the next sprint. But, if there is no fear of failure, the team would assess the individual strengths of each member and leverage them, reorganize how they work and still try to hit the goals without lowering the bar. On the other hand, if teams operate within a climate of fear, they tend to make decisions that are safe, but suboptimal.
The people in a team need to feel safe with each other as well as with the leadership before they can make decisions that are solely based on what’s right for the company – instead of worrying about pleasing individual leaders or managers. In the absence of safety, teams begin focussing on CYA behavior, that may subconsciously be at play, influencing the quality of decisions being made.
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