WHO HAS THE D? Harvard Business Review reviews

November 17, 2022

Decisions are the coin of the realm in business. Every success, every mishap, every opportunity seized or missed is the result of a decision that someone made or failed to make. At many companies, decisions routinely get stuck inside the organization like loose change. But it’s more than loose change that’s at stake, of course; it’s the performance of the entire organization. Never mind what industry you’re in, how big and well known your company may be, or how clever your strategy is. If you can’t make the right decisions quickly and effectively, and execute those decisions consistently, your business will lose ground.

Indeed, making good decisions and making them happen quickly are the hallmarks of high-performing organizations. When we surveyed executives at 350 global companies about their organizational effectiveness, only 15% said that they have an organization that helps the business outperform competitors. What sets those top performers apart is the quality, speed, and execution of their decision making. The most effective organizations score well on the major strategic decisions—which markets to enter or exit, which businesses to buy or sell, where to allocate capital and talent. But they truly shine when it comes to the critical operating decisions requiring consistency and speed—how to drive product innovation, the best way to position brands, how to manage channel partners.

Even in companies respected for their decisiveness, however, there can be ambiguity over who is accountable for which decisions. As a result, the entire decision-making process can stall, usually at one of four bottlenecks: global versus local, center versus business unit, function versus function, and inside versus outside partners.

The first of these bottlenecks, global versus local decision making, can occur in nearly every major business process and function. Decisions about brand building and product development frequently get snared here, when companies wrestle over how much authority local businesses should have to tailor products for their markets. Marketing is another classic global versus local issue—should local markets have the power to determine pricing and advertising?

The second bottleneck, center versus business unit decision making, tends to afflict parent companies and their subsidiaries. Business units are on the front line, close to the customer; the center sees the big picture, sets broad goals, and keeps the organization focused on winning. Where should the decision-making power lie? Should a major capital investment, for example, depend on the approval of the business unit that will own it, or should headquarters make the final call?

Function versus function decision making is perhaps the most common bottleneck. Every manufacturer, for instance, faces a balancing act between product development and marketing during the design of a new product. Who should decide what? Cross-functional decisions too often result in ineffective compromise solutions, which frequently need to be revisited because the right people were not involved at the outset.

The fourth decision-making bottleneck, inside versus outside partners, has become familiar with the rise of outsourcing, joint ventures, strategic alliances, and franchising. In such arrangements, companies need to be absolutely clear about which decisions can be owned by the external partner (usually those about the execution of strategy) and which must continue to be made internally (decisions about the strategy itself). In the case of outsourcing, for instance, brand-name apparel and foot-wear marketers once assumed that overseas suppliers could be responsible for decisions about plant employees’ wages and working conditions. Big mistake.

Clearing the Bottlenecks
The most important step in unclogging decision-making bottlenecks is assigning clear roles and responsibilities. Good decision makers recognize which decisions really matter to performance. They think through who should recommend a particular path, who needs to agree, who should have input, who has ultimate responsibility for making the decision, and who is accountable for follow-through. They make the process routine. The result: better coordination and quicker response times.
Companies have devised a number of methods to clarify decision roles and assign responsibilities. We have used an approach called RAPID, which has evolved over the years, to help hundreds of companies develop clear decision-making guidelines. It is, for sure, not a panacea (an indecisive decision maker, for example, can ruin any good system), but it’s an important start. The letters in RAPID stand for the primary roles in any decision-making process, although these roles are not performed exactly in this order: recommend, agree, perform, input, and decide—the “D.”

Bagaimana Peran Keputusan yang Jelas Meningkatkan Kinerja Organisasi

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  1. Nabila Zhafira 29540

    Dari 4 hambatan yang ada, menurut kelompok anda mana kah hambatan yang paling berisiko dalam proses pengambilan keputusan dan apa alasannya?

  2. Putri pitaloka m (29799)
    Pada slide terakhir dikatakan perusahan sukses menggunakan alat sederhana membantu mereka mengenali potensi hambatan, apakah alat sederhana tersebut?

  3. Reply
    Gita Nirmalasari Triyana November 17, 2022 at 2:00 am

    Gita Nirmalasari(29483) penjelasan mengenai fungsi vs fungsi dijelaskan pembeli harus mengurangi kompleksitas,maksud dari kompleksitas dalam pengambilan keputusan itu apa?terimakasih

  4. Fitri Alvinasari 29945
    Faktor apa saja yang bisa membuat pengambilan keputusan terhenti pada keputusan global vs lokal? Contohnya?

  5. Selly Firda Agustin 29599
    Dalam pengambilan keputusan yang terhenti karena beberapa hambatan, disitu dijelaskan fungsi vs fungsi. Contoh dari hambatan fungsi vs fungsi itu seperti apa?

  6. Reply
    josafat prayoga djati samudra November 17, 2022 at 2:00 am

    Josafat prayoga (29488) → dalam artikel tersebut kendala apa saja yang mempengaruhi pengambilan keputusan?

  7. Anisa/29528
    dalam presentasi pada slide pengambilan keputusan yang baik, pada baris terakhir dijelaskan peran tersebut tidak dijalankan secara berurutan dalam urutan ini butuh melakukan beberapa kebebasan demi membuat akronim yg berguna. apa bisa dijelaskan mengapa dijalankan tidak berurutan? dan membuat akronim yg berguna itu seperti apa?

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