Many people say to me: John, how can the decision-making in my company be so screwed up? Were my bosses born stupid, they ask, or did they somehow evolve backwards into vicious, tiny-brained reptiles? Is there any way, they lament, that we can make it better?
To which I would normally reply: No clue, yes and yes, and not a chance.
Now I have a better answer, thanks to my friend Andy. He and his colleagues compiled a massive amount of practical research in bad decision-making (i.e., they worked for stupid people for more years than they'd like to remember) into one brilliant graphic on a cocktail napkin. This image -- an inverted cone with increasingly compressed, dense layers -- perfectly summarizes how decisions are made at almost every corporation. Known as the "Gravity Fed Decision Model (GFDM)," the cone narrows through four distinct stages and organizational levels of decision-making, including:
FEAR: In Stage 1, executives at the highest level begin to twitch like nervous rodents, alert to a sudden sense of an impending decision. The cause can be as obvious as a competitor introducing a new product or as subtle as an ill-defined anxiety that a restructuring is in the offering. Regardless of origin, the effect of this quivering is to paralyze the organization with fear and infighting. What should be an opportunity for strategic planning and is instead transformed into a melee of CYA memos. Given these senior executives' well-honed instincts for self-preservation -- remember what Margaret Thatcher said: "I've learned one thing in politics: You don't make a decision until you have to." -- the only way out is to delegate the dangerous decisions to less senior executives who can either A) take the blame if it all goes to hell, or B) be cajoled or intimidated into passing the credit back upward if everything works out.
BENCHMARK: The middle managers responsible for Stage 2 of the GFDM are no dummies; indeed, many will eventually rise into the FEAR part of the organizational cone, and are already honing their own corporate survival skills. Yet they face a dilemma: How to avoid making a decision without defying a direct order from a superior. The answer: Form a committee, schedule some meetings and, most important of all, benchmark. Or, as Andy reports one middle manager saying: "That benchmark study should buy us at least a six-month stay of decision."
The eventual benchmark report, of course, will recommend further study and further delegation of the decision to front-line personnel who, not coincidentally, are also subject to options A and B as described above.
PANIC: Also known as the OH MY GOD! IT'S &^%!*&! DUE IN 45 SECONDS! part of the GFDM Cone, Stage 3 involves enormous pressure from the upper levels of FEAR and BENCHMARK on front-line personnel to do something, anything, because TIME IS RUNNING OUT. Unfortunately none of the information required to make an intelligent choice (including the benchmark report) will have been shared with the working stiffs now making the decision. These brave souls -- using only their common sense and their experience with actual customers -- will nonetheless rise to the occasion, making a sound decision in spite of the dumb bosses above them, leading to . . .
ENDLESS REVIEW: In Stage 4 the senior executives once again take over, returning to a comfort zone of perpetual analysis and backbiting without risk of actual responsibility. This part of the Cone also reinforces the organization's social order, i.e., the higher the rank, the more idiotic the criticism of a decision can be. For example, while a VP requires two spreadsheets and a PowerPoint to critique a strategic direction, a CEO might just say, "This doesn't feel right. I think I'll show it to my grandchildren, see what they think of it.
"Which leads, of course, back to Stage 1, FEAR.
John R. Brandt, formerly editor-in-chief of IndustryWeek, is CEO of the Manufacturing Performance Institute, a research and consulting firm based in Shaker Heights, Ohio.
