Sunday, January 15, 2012

It's Time To Make A Decision! Now What?

A number of years ago I was working on a project looking at improving the profitability of an apparel business. At the time the inventory had increased dramatically over a fairly short period, causing a number of profit related issues. I will never forget the day we had a Senior Management meeting and I asked who was responsible for stock. "We all are" was the war-cry that followed. In trying to understand the reasons behind the excess stock I then asked who made the decision (ultimate responsibility) to purchase the stock... silence. Poor forecast, poor analysis, high Minimum Order Quantities (MOQ's), poor sell-through... excuses, excuses, excuses. But no ultimate decision maker.

I have seen this time and time again. Decision making is a critical process in any business and is essential in ensuring ruthless execution, whether it be as part of business as usual (BAU) or a complex change strategy.

A number of tools have been developed to help provide a framework in the decision making process.

My personal favourite is the Bain & Company RAPID Decision Model. RAPID (which is a register trademark of Bain & Company) was developed by Paul Rogers and Marcia Blenko (Bain Consultants) and published in the article: “Who has the D? How clear decision roles enhance organizational performance” which appeared in the January 2006 Harvard Business Review. RAPID is an acronym that stands for:
Recommend: These people will put together the proposal (data, facts, analysis etc) for a key decision. Additionally they may consult with the Input providers to incorporate their views as part of the proposal.
Agree: These people agree with the proposal from the Recommender, including negotiating any modifications to the proposal if the Agree'er has any concerns. Note: the more people assigned an Agree role the more time it can take to make the decision.
Perform: These people execute the decision once it is made.
Input: These people are responsible for providing relevant facts to the Recommender. 
Decide: These people are the decision maker. Typically it is one person / executive who commits the organisation to implementing a decision, however it can potentially be a collective group i.e. company Board of Directors.
Why do I like the RAPID model? Firstly, it is simple. You read it, you see it, you get it. Second, and most important of all, it is a great tool for clearly articulating who the actual decision maker is as well as providing clarity of the decision making process.  RAPID provides transparency to the decision making process and hence is can be invaluable in ensuring accountability. Individuals will know exactly what their role is, and what other employee roles are, within the given decision process. What once may have been grey will now be very black and white.

It must be acknowledge that RAPID has been criticized for slowing down decision making process, particularly in the early stages of embedding the process within an organisation. This will be compounded when there are to many A's or I's in the process. Additionally, it can also lead to tensions between employees particularly when you deal with ego's i.e. everyone wants to be important, and hence the people aspect of this needs to be managed with due consideration.

As I previously mentioned, there are a multitude of decision making tools available, of which RAPID is my preferred option. However the driver / outcome is a clearly defined decision making process with the appropriately assigned roles and responsibilities within the process. Ultimately though someone must be held accountable for a decision. Whether you use a tool like RAPID is neither here nor there. The key is ensuring the next time anyone asks, "Who made the decision?", stunned silence is not the appropriate answer.

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