A Model For Transformation

Have you ever wondered why CXOs who are not skilled enough to manufacture company’s product are paid much more than the associates who actually impact the quality of the product and hence customer experience? You probably already know, and here is why. People in an organization get paid based on the level of impact their decisions have on the fortunes of the company. One big challenge of scaling up the business is how to achieve consistent decision making across the organization.

In this third article in the series we explore the decision making process and the levers that can help transform decision making and consequently the quality of business itself. While it is not necessary, it is recommended that you read the first two articles to get the full context of the following discussion. The links are given at the end of the article.

There are many forces that shape the decision making and we will touch on some of them here.

Benefit/risk perception- different people seek different benefits. For some it could be financial, for some others it may be a position of power, for yet others recognition and so on. Depending on where they are in Maslow’s hierarchy in that situation, people weigh their benefits vs risks to evaluate the residual impact on themselves.
Social acceptability- an important factor that influences the decisions is the culture of the organization. People’s perception of what others expect of them or what is “acceptable behavior” in the organization also shapes the decision.
Ease or effort- Just as people evaluate risks and benefits, they also evaluate the amount of effort they and other would need to put in to make things work. Mostly, people try to choose the path of least resistance. In other words, decisions that require least effort (mental, physical, emotional etc.) are preferred.
Personal Values- This works at the sub-conscious level. For example, if I value relations more than the outcome, I am more likely to avoid contentious decisions. Or if I value timelines more than the completeness, I am more likely to allow substandard work to pass if deadlines are threatened.

And then there is the fact that all the information required to take a sound decision is never available. Hence, people need to rely on their assumptions. Assumptions in turn depend on the personal experience of people.

With so many variables, how do you even begin transforming decision making?

Presented here is a high level model for transforming an organization. We break the transformation down into simple first level levers- Strategy, People, Processes and Technology.

Strategy- This lever helps work out the common assessment of benefits vs risks for the organization. Strategy is about making choices. It arms the employees with the business perspective. When in doubt, the employees can refer to the company strategy and evaluate if their decisions align with company strategy.
People- This is by far the biggest lever of business transformation. Almost all decisions are made by people (these days some are made by machines and programs too). And all the major forces are impacted by how we organize our people. Transforming people requires working at the sub levers of Culture, Structure and Capability. We will explore each of these sub levers in future articles in this series.
Processes- This lever impacts the ease/effort related forces. When processes and their interactions are well laid out, people instinctively know what is the most appropriate thing to do. If you are struggling with lack of standardization in your organization, probably your business processes are bureaucratic and not very instinctive.
Technology- This is the most underutilized of all levers. Technology has been traditionally viewed as complex and expensive. But technology evolves. It can work both on the ease/effort force as well as a strategic differentiator. All you need is to use it right.

In the next few articles in this series, we will explore each of these levers of transformation.

Please use the links below to visit the first 2 articles in this series.

Anatomy of a Transformation

The Decision Pivot

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