Who should make these decisions and how will these decisions be made?
Determining who makes the decisions and how the decisions will be made relies on the structure of the organization.
First let’s talk about the importance of the decision itself. Every outcome is the result of a decision - either made or failed to be made by someone. Many companies struggle with getting decisions made at all. I’ve seen progress grind to a halt for the lack of a decision. Any decision please!
Making good decisions quickly is the hallmark of a high performing organization. Harvard Business Review wrote a wonderful article “Who has the D?” back in 2006. http://hbr.org/2006/01/who-has-the-d-how-clear-decision-roles-enhance-organizational-performance/ar/1 . It is such a great article it is available for sale on Amazon as well!
Okay we have that out of the way. Let’s move on.
Making a good decision quickly is dependent on clear ownership of the right to make the decision. The organizational structure of any company results in decision-making authority throughout various levels in the organization.
From here on let’s discuss an example of how a fictional company’s corporate structure effects IT decision making and governance. For the sake of illustration I will call the organization “Company”
The primary vehicles for Company strategy providing governance to the IT functions most likely will or should act as follows:
- The Company Executive Team (CET) will set the guiding business principles that define the role of IT in the business. When acting in this role, the CET will collaborate with the Company board team to ensure maximum alignment with the goals and mission of the organization.
- In global or multi-divisional companies the divisional or business area leadership will collaborate with IT to specify the business capabilities needed to support the business strategy. The capabilities outline by the Business Leadership Team (BLT) will result in defining the need for modifying existing or acquiring new applications and services, either purchased or new. They also guide business unit IT requirements relative to alignment with the strategic needs of the business.
- The IT Portfolio Oversight Committee (ITPOC) will approve all IT projects, strategies, and initiatives, as well as capital and operational budgets related to enabling their business services. Think of the ITPOC as a board of directors. They should guide and approve strategy and spend but stay out of the operational delivery of the projects. Sometimes that is easier said than done.
- The Program Management Office (PMO) is expected to monitor progress and expenditures against the approved project plan and to conduct gate reviews at defined critical points in the development/installation process.
- The Project Steering Committees (PSC) are expected to resolve issues and conflicts, to ensure continued alignment with the goals of the business and ensure functional user participation and ownership throughout the life cycle of each project.
- The IT Leadership Team (ITLT) will set and maintain the principles that guide IT architecture and infrastructure decisions. The ITLT will deal with policies, relationships and technical choices to achieve desired business and technical standardization and integration. The ITLT will also set key infrastructure standards and directions that apply to all business units to ensure a consistent and sharable foundation for IS capability.
The ITLT relies on input from the functional IT leadership team to define the principles and determine the standards, policies etc. Operating within these principles, standards and policies, the ITLT will delegate or authorize operating level decisions to the functional leaders.
A key consideration is to drive operating level decisions as low as possible based on risk to the organization. Good decision making depends on assigning clear and specific roles as well. This sounds simple on paper but is in fact an area most companies struggle because many people feel accountable. When many people feel accountable most often no one takes actions. Worse yet, the wrong person may take the wrong action.
The HBR article outline above lays out a “Decision-Making Primer” that I particularly like. In this primer they introduce a tool called “RAPID”. The letters in RAPID mean
R = Recommend. These are the people who have or will:
- Recommend course of action
- Gather input by consulting with others and generating buy in along the way
- Provide the right data and analysis
- Make a sensible and timely proposal
A = Agree. This is the person who can:
- Veto or approve the recommendation
(should be very few people)
- Engage the recommendation in a discussion/ debate that leads to a modified proposal
- If that takes too long or they cannot agree they escalate to the person with the ‘D’
P = Perform. This is the person or team who:
- Execute on the decision (often the ones who make the recommendation)
- Work with defined roles, responsibilities and processes as well as flexibility
I = Input. This are the people who:
- Provide the relevant facts that are the basis of good decisions
- Often are responsible to implement the decision
- Give non-binding input
D = Decide. This is the person who is responsible for:
- Be the single point of accountability
- Exercise good business judgment, grasp the relevant trade-offs, have a bias for action and a keen awareness of the organization
- Resolve any impasse
- Bring the decision to a close
- Commit the organization to action
The three trouble spots in most organization are the lack of clarity around who really has the “D”; a proliferation of people with veto power; and the proliferation of people providing input. This is where the inclusion of organizational change management in all major initiatives is very helpful. A simple piece of advice is to clarify at the beginning of the program the decision making responsibility matrix.
It is easy to see that an effective approach to decision making is in the best interests for IT and the organization overall.
Next time will discuss “How IT supports these decisions”
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