These days everyone is agile, or lean, or both. According to VersionOne's 2016 State of Agile Report, 95% of all companies now practice agile innovation methods. Agile teams just work better. So it often happens that once companies conquer team-level agility, they turn their focus to scaling enterprise agility, all the way to the C-suite.
And just as often, executives run into trouble when they try to scale agile. That’s because it’s not about reengineering a process or organizational structure. It’s about rethinking and retooling their approach to decision-driven work.
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Today, executives ask agile teams to stick to schedules and processes, but they don't hold themselves to the same standards when making decisions. Management decisions continue to be made in the old-fashioned way: Executives get together in rooms and hash things out, using informal techniques that are riddled with bias. It is an ad hoc activity driven by emails, presentations and politics. Information is not weighed correctly. Worse yet, the original reasons for making the decision are lost, erasing accountability. And so the problems continue because executives fail to examine the quality of their decision making, and learn little from the results of their decisions.
Ironically, executives are decision makers first and foremost. To scale agile to the enterprise, executives have to first apply the same discipline to managing their decision making processes that agile team bring to their projects. They need to bring the same visibility, speed and collaboration to decision making that agile brings to software development.
Agile executives must get three things right to get lean and unstick enterprise agility. Decision making must be tracked so its impact on results can be improved. Executives must take an agile approach to collecting and sharing information. And automatic feedback loops must be put in place to drive learning and keep people, priorities and plans aligned with reality.
1. Elevate Decision-Making Metrics To Mission Critical.
Researchers at Bain found that decision effectiveness is 95 percent correlated with financial performance. Yet most executives spend much more time measuring and improving the work that results from decisions than they spend on tracking how the decisions are made. Decision making is the most important and least measured process in business today.
So, elevate decision-making metrics in your organization. Define how you make decisions. Understand the biases that reduce your decision making ability and take steps to correct them. Track the process and results of decision making, and use that information to improve future decisions. Make decisions at all levels more visible. It works.
After distributing decision making and radically increasing visibility of decisions, Edwin Jansen, Head of Marketing at online hiring firm Fitzii, observed, “Our big decisions have been more widely informed and nuanced, resulting in fewer biased, bad calls and more balanced, well-reasoned decisions.”
2. Get Good At Uncovering “Good Enough” Information.
Information required for complex decisions is often distributed across siloed departments and individuals who are playing politics with each other. Because the business world is fast moving and ambiguous, data-driven business teams are flooded with complex information and conflicting insights. As a result, decision makers often resort to cherry-picking and oversimplification in their quest for decisiveness.
To get relevant and reliable information quickly without backlash, flip the discussion on its head. Don’t ask what people know. Ask what they don’t know, and whether that missing information is important. Then go get it if you can. If not, make note of it as a risk and fill in the blanks or change course as the decision plays out. Doing this not only keeps the focus on “good enough,” but also increases buy in across the team by surfacing and addressing their concerns.
Decision makers who effectively gather and share good enough information about decisions decide 10 days faster, save an average of 10 hours of meeting time, and improve the outcomes of their decisions by 20%. A hospital staffing project used this approach to cut 2 months of discovery down to a single two hour meeting. A committee of industry executives cut three meetings down to a 20 minute conference call. Good enough information drives faster decision making.
3. Create Decision-Driven Feedback Loops To Learn Faster
Every decision is an opportunity to learn. Think of decisions as experiments, not edicts. When a decision is made, put a tickler on the calendar to follow up on how the actual results compare to the original expectations. Learn from both successes and failures.
Fast feedback loops drive the most compelling decision-driven results in our own businesses. A decision about project goals sparked a coaching opportunity for a young new employee to guide her to growth, engagement and customers as the highest priorities. Reviewing a process change decision identified a reluctant stakeholder, allowing our CTO to clarify a confusing aspect of the decision before resentment set in. Following up on a series of strategic business decisions redirected ineffective strategies, cutting months off time-to-market.
Next: Savvy Executives Will Exploit The Gap To Compete
Savvy executives exploit these gaps to compete. Science and technology are adding new tools to help executives make this happen. Marc Andreessen says that software is eating the world, and enterprise decision making is next on the menu. Software is beginning to give executives the tools they need to transform enterprise decision making into a consistent collaborative process that can be systematically tracked, analyzed and improved. There is transformational value in taking systematic approach to making fast and effective decisions. Like ERP for back-office and CRM for sales, it is inevitable that managers and executives will use software systems to automate and manage the decision making process.
State of the art science and systems for decision making are advancing far ahead of current business practices. Savvy executives will exploit this gap to create a competitive advantage for themselves, their organizations and their companies. Today, agile teams track their work to improve the way they work. Tomorrow, agile enterprises will track their decisions to improve the way they decide.
This post was co-authored with Michael de la Maza, author of the book Why Agile Works.