Decisions and the 8 Great Goods

February 08, 2011 6 min read

If you examine studies done on organizational culture and decisions, the two are highly correlated. From corporations to government organizations to hospitals to fire fighters, study after study shows that culture has a huge impact on decisions in organizations.

Decision-making is the clear realm of the leader in any human group. It is the most explicit role of leadership. Attention will focus on the leader whether the leader wants it or not. A leader may task others to create a culture or to direct change — but if the leader doesn’t support it completely, it will not happen. An organizations’ leader must make decisions.  Many decisions may be delegated to subordinates, but when the subordinates disagree, the leader is left to make the final decision. US Presidents have noted the importance of this leadership role with memorable quotes like: “The buck stops here” (Truman), “I am the decider” (GW Bush) and “In any moment of decision the best thing you can do is the right thing, the next best thing is the wrong thing, and the worst thing you can do is nothing.” (T Roosevelt).

Even Napolean got into the quote books on this topic: “Nothing is more difficult, and therefore more precious, than to be able to decide.”

The whole point of prioritization of the Goods is about decisions. If your personal prioritization isn’t explicit, you are still subconsciously using some kind of a hierarchy to make decisions. If you are doing any form of group decision-making, however, subconscious is not a good idea. It causes chaos and disagreements where there need not be any; the more explicit the prioritization, the better. So, in any organization, all decisions can be streamlined with a clear, well-communicated prioritization of Goods.

There are lots of models of decision-making — there are whole academic disciplines devoted to understanding decisions: organizational behavioralists, psychologists, sociologists, and brain scientists — all hard at work on the issues. In other words, lots of people have tried to understand how we come to a conclusion about what we are going to do.

But when it comes to good bases for organizational decision-making, I think there are really 3Cs — Clarity, Consistency, and Candor.

Clarity

One thing that is pretty evident, if there is not a clear end goal — aim or mission — then groups of people will dither for a long time over every decision.

One of the clearest decision-making apparatuses I’ve ever experienced as a consultant was in a project that I was doing for Wal-Mart. We were supposed to be coming up with ideas for an advertising campaign for the company. The group I was working with was extremely clever. Great ideas were emerging. We believed we had notions that would reposition Wal-Mart and really sell well to the American — and even foreign — public. But, once we met with the Wal-Mart executives, we heard a broken record — that given my years of teaching about the company I had oddly not anticipated: “How much will that cost?” “Will it be clear that we are low cost with that message?” “We want simple ads that show we are low cost.” “Will that idea take the focus off of our low costs?”

Every sentence out of the Wal-Mart executives’ mouths was about “low cost.” It was their religion. It was their culture. It was their ultimate Good. All decisions had to take cost into account — and usually cost was the ultimate factor in those choices.

In too many organizations — even businesses where you might think the “almighty dollar” would usually be the final arbitrator — the bases of decisions are muddled or non-explicit.  This leads to a lot of faffing around.

Consistency

In the case of Wal-Mart, the “cost” criterion is both clear and consistent. But not all organizations do both of the first two Cs equally well. Clarity is an important first step in achieving consistency, but it is not enough. I’ve seen many organizations where there was a shared — and clear — understanding at the top of the organization that the basis of decision-making would change under certain circumstances. For the people lower in the organization — those who are not in on the inner circle; these departures from stated norms can be nerve-racking.

I consulted in a company that did a great job of hiring really amazing people into its ranks.  It promised lots of autonomy (Individuality) and opportunities for innovation (Joy). These same people loved the clarity of the message and the opportunities that were presented. Once they were in the firm, however, there was a different story.

We all have seen or heard of the pre-hire lies that attract good people who find that once they are on the inside, the truth is far different from the recruiting hype. But, that was not what was going on in this case. Here, there were indeed people at or near the top of the firm who were basing their decisions on Joy and Individuality  — Stability didn’t rank very high in their decision-making. But between those top people who did a lot of the recruiting of the “high potential” staff and the newly hired staff, there was a layer or two of people who had completely different decision-making Goods. They understood that they were overseeing potential future stars who were meant to leapfrog them to the top of the organization.  Their completely understandable response was to become focused on Stability and Fairness — “If I can’t get my ideas heard a level above me, then neither can you.” The recently hired new employees were leaving in droves. The message at the top — and to the world — was clear: “We are a company that is all about innovation and new ideas — we welcome mavericks.” But, that message was not applied consistently throughout the ranks.

Candor 

You can be clear — “Society is the most important Good” — consistent — “Society is what everyone makes decisions on in this organization” — and still be pretty dishonest.

And it is even worse when decision hypocrisy comes into play — you know, where decisions made are said to be based on one thing, but it is really something else that is most important. Decision hypocrisy just makes employees crazy. The most common version — which you’ve probably experienced more than once in your life — is the “Decisions are made on the bottom-line … but (sotto voce) it is really all about power” hypocrisy. This is the one where the Board and shareholders are led to believe that money is the ultimate criterion, but really good ideas, good opportunities, and important cost-cutting are lost because someone is trying to hold on to their job or get an important promotion.

In a 2010 Sloan Management Review article, Peter Tingling and Michael Brydon call what inevitably results from this, “decision-based evidence.” A decision is made first on the basis of one Good and then resources are dispatched to make up the evidence to support the decision based on a different Good. The authors conclude that this is not always bad. If the audience for the evidence is external to the organization, then it may be a necessary evil.  But they warn that this process should not be used to convince internal constituencies.  Those inside the company just have too much access to information to ever believe the bogus evidence.

But the key is that the internal messages must be honest. (I would actually go a step farther than this and argue that for long term organizational health both internal and external messages should be consistent and candid.)  And the only way out of a dishonesty trap is with honesty — a hard nut to crack in a corporate culture riddled with duplicity. In fact, if your culture is riddled with dishonesty, it is unlikely that you’ll ever realize that your priorities are not clear or consistent. So, in many ways, without real candor, it is unlikely that your organization will achieve any of the 3Cs.

Decision Exercises

1) Ask a dispassionate third party to look at a string of decisions that you and the organization have made in the last few weeks/months. 

2) What do those decisions say about your priorities?

3) If you look at your boss’ and your subordinates’ decisions — small to large decisions — what are they prioritizing? Is their decision based on the same Good as yours?

4) Ask your people if they believe there is any duplicity in the decision priorities. If there is, is it a “necessary evil” or is there a way to create a system with more of the 3Cs?