The little decisions are as important as the big ones, says UCT Graduate School of Business' Tim London.
We are, unfortunately, beset by frequent news reports of major calamities in all types of organisations: SOEs, non-profits (such as the scandal engulfing Oxfam), and for-profits (take your pick from several consulting firms, Steinhoff, or Carillion in the UK, among countless others). Since almost all of what we know about these crises is what we read in the media, it can be easy to focus heavily on the major culminating event and the few people (often those with the most “senior” titles) when trying to analyse these events. The danger in this is two-fold: firstly, that we view leadership as narrowly held among only a few key positions and, secondly, that only one or two very big decisions are at the heart of this newsworthy event. I will tackle the former in a future article, but for now let’s look at the perils of “atomised” decision-making, the importance of which we often overlook.
Obviously, there will be times in our careers when we will have to make the “big decisions”: make the go or no-go call on a major new product launch, declare bankruptcy, hang on for one more cycle in the hopes that the market will turn, or determine when to step aside for a new leader to take our place. Most of the decisions made in organisations are, however, of the small or “atomised” type. These are the little decisions that don’t have an immediate and obviously notable impact; their importance is wrapped up in the fact that they are less noticeable and so numerous.
In other words, each one seems innocuous at the time of the decision, but they are generally the answer to the question we ask in the middle of significant strife: “How did we get here?!”
I argue that there are three main areas of any organisation and that the atomised decisions we make in these areas are what will determine just how well, or how poorly, your organisation performs. These areas are your organisation’s structures, culture, and people. Structures can be the physical aspects of your organisation (where your offices are located, if they are open plan or not, the distance between different groups, etc.), but usually more important are the rules, regulations and policies that provide the formal structure to your firm. An organisation’s culture is that difficult-to-define “sense of the place” that you get from being in there and speaks to the “vibe” or environment. The people you bring into your organisation and, just as importantly, the people you keep out is the third aspect of any organisation. This is hugely important in defining your culture and, to a lesser extent, which structures you have in place.
[cfocoza-cta slug=finance-indaba-africa-2019-register-for-free]
Despite what many bestselling management books might have you believe, there are no hard and fast rules as to what decisions to make in each of these areas. There are, however, some key questions you can ask yourself about your own organisation that can help you to place atomised decisions into a broader context and better understand how they connect to other atomised decisions. While these aren’t the only questions you should be asking yourself as a leader, they can be very useful in improving your ability to see and then leverage these small decisions to your organisation’s advantage.
Structure:
- What kinds of behaviours do our policies/procedures/rules incentivise?
- What kinds of behaviours do our policies/procedures/rules disincentivise?
- Do our policies/procedures/rules provide too little, too much, or the right amount of safety and stability?
- Do our policies/procedures/rules provide too little, too much, or the right amount of flexibility and dynamism?
- How often do we review our policies/procedures/rules? How easy is it to change/remove/add them, following these reviews?
- Who is involved in the reviews/changes to the organisation’s policies/procedures/rules – (directly connected to the “people” side of the organisation)?
Culture:
- What is the organisation’s purpose and what are its core values?
- What is the ideal culture for this organisation, given its purpose and values?
- How close to the ideal culture is the organisation currently? What points are closest to the ideal and what points are furthest from the ideal?
- What are our strongest leverage points for maintaining or changing our culture?
- What are the biggest internal threats to our culture? What are the biggest external threats to our culture?
People:
- What kind of people do we want to have in, and keep out of, the organisation (including both skills and attitudes)?
- How do we select the people we want to bring in/keep out (directly connected to the “structures” side of the organisation)?
- How do we select people for promotion, development, and/or dismissal (directly connected to the “structures” side of the organisation)?
- How do we develop our people (from induction through to exit)?
- What kind of people do we network with (or not) outside of the organisation, such as suppliers, retailers, funders, etc.?
As noted earlier, it’s not that you shouldn’t be on the lookout for big challenges and opportunities to improve your organisation or avoid real danger. I’d argue, however, that those blockbuster events are both rare and also largely due to the small, atomised decisions that pass unnoticed each day. It is essential that you get those atomised decisions right, and ensure they’re consistent with other atomised decisions. If you can do that, you’ll be amazed at how much more time you have to devote to finding new opportunities to explore and how seldom you find yourself and your organisation in dire straits. These aren’t the big, sexy decisions that make the news, but they’re the ones that the best leaders attend to religiously to keep their organisations strong and sustainable.
