Decisions, Information and the Perfect Organisation

Flawless Decision Making

We believe in the perfect organisation. It works a little bit like this:

1. There is a charismatic, wise and intelligent leader, who makes all the crucial decisions.
2. A clear hierarchy supports the leader, with defined roles and responsibilities.
3. Data passes up through that hierarchy, providing the leaders with perfect information.
4. Everybody acts with one voice, there is complete alignment.

Information courses up the chain of command and perfect decisions flow back down.

Perfection doesn’t exist

Of course non of us is foolish enough to believe that we have the perfect organisation, so we strive to build it:

1. We focus on talent and performance management to develop that wise charismatic leader.
2. We carry out strategic reorganisations and write SMART objectives. Ensuring we have clear hierarchies and accountabilities.
3. We invest in data lakes and information systems so that we have one source of the truth.
4. We mandate culture and compliance programmes to ensure alignment.

A flawed aspiration

The perfect organisation might have existed when we were tribes of hunter gatherers. Everybody knew everybody else and the world was simple. But as our organisations grow in size and complexity, it is far more likely that:

1. The leader is no wiser or more intelligent than his staff. He is just more driven, works longer hours and spends less time with his children.
2. Clear accountability has created divisions, issue ducking and finger pointing.
3. The messages that flow upward are managed, massaged and on occasion mutilated.
4. We have stamped out dissent and created cultures where yes-men thrive.

The information that percolates to the top is sugar coated to the point of banality. The decisions that flow back down can’t help but be flawed.

That may sound a bit bleak, but do you want to go to the pub with your wise and charismatic CEO? You could tell him how your part of the business is faring.

So what could you do instead?

No one person can hope to understand how our huge, complicated organisations work. Even without the truncated messages that get passed up the chain. There is simply too much for one man to understand.

So instead of managing the information flow upward, force the decision making downward. Those who are closest to the action have the most complete knowledge. Let them make decisions.

Of course that will only work if managers stop telling their staff what to do and start respecting what they have to say. Maybe then the staff will stop sugar coating the information that they pass upstairs.

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Image by sarahR