Plain old bad decision-making generates an endless list of problems.
One of the most important domains within organizations that lean too infrequently injects itself is decision-making. The who, what, when and how of decision-making is ultimately one of the most fundamental elements of any organization. The challenges with decision-making are numerous. Ambiguity in decision-making results in delays and rework. Inconsistent decision-making creates confusion. And plain old bad decision-making generates more problems than we can list.
There is much advice in the business world, and beyond, about improving decision making. It is broad and complex, and tackling the challenge is much like taking on culture change. But what specifically can lean teach us about decision-making?
- Observe first. Direct observation of the current condition is a core tenant of lean thinking. As both a behavior and a checkpoint, we should ensure that people have an understanding of the current condition before making the important decision. The quality of our decision-making is a function of the quality of how well we understood the current state.
In a team I once led, we established a rule: If you hadn’t seen the condition, you didn’t get an opinion in the discussion. It was a rather draconian rule, but it prevented a lot of unsubstantiated opinions from getting mixed in with the observed facts. The quality of the decision-making improved and the duration of the conversations was shortened.
- Make decisions closest to the point of activity. There is a theme within lean toward empowerment that often gets misapplied. Some of the language chosen is making decisions at the lowest level possible. This objective, combined with an objective to empower and engage, leads to a very wrong behavior: abdication.
Abdication means turning over decision-making to the front line resources. This isn’t inherently good. It is good when those people are best suited to make those decisions. It is wrong when they aren’t. The fundamental filter I recommend is making decisions closest to the point of activity. Everyone is closest to some activity or work process, and they are inherently best suited to understand the current reality of the situation and make effective decisions.
- Define decision rights and expectations. Knowing who should make the decision seems elemental, yet lacking more often than not. Without definition around the “who,” people will often “kick upstairs” as many decisions as possible to avoid risk and responsibility, or decisions will go unmade with everyone assuming someone else will take care of it.
The highly successful privately held Koch Industries Inc. defines what they call decision rights. You are given the right to make that decision, and that fundamentally means it is yours to make, not to pass on. Along with that right comes responsibility. One of those responsibilities is the challenge process. The challenge process means that while you have the right to make the final decision, you are expected to seek input from your boss, peers, and your team. And their responsibility is to challenge you in that decision. This process strikes a wonderful balance between consensus-input and clear ownership.
- Use standards to capture and utilize experience. It’s hard to overestimate the importance of making good decisions, but how can lean help here? It’s about experience, skill and judgment. But simple checklists that capture codified experience help ensure that experience and judgment is applied consistently and effectively. It is not a replacement for skill and knowledge. But when it is leveraged as a job aid, it improves the utilization of that existing knowledge.
In the book “The Checklist Manifesto,” the use of checklists to capture investment judgment is described. At each stage of the investment process, there are certain factors that we must consider and evaluate. Those checklists don’t give you the answer but ensure you ask the questions. As the checklist users described, if they happened to ignore the standard of the checklist, they would usually regret missing something important.
Decision-making is as broad and complex a topic as can be found. Lean does not resolve all the challenges. Yet the impact of lean thinking on your decision-making can be profound. After all, what’s really more fundamental than making good decisions?
Contributing Editor Jamie Flinchbaugh is a co-founder and partner of the Lean Learning Center in Novi, Mich., and the co-author of "The Hitchhiker’s Guide to Lean: Lessons from the Road."