Time to Transform Your Decision-Making Process?

A problem or other situation arises in your supply chain and a decision needs to be made quickly on what action to take. Since all decisions go through Bill, he needs to be involved, but he’s visiting suppliers in Asia the next two weeks. And Mary should be included in the decision process too, but she’s out on vacation this week. And ideally, you should have representatives from IT, Sales, and Quality in the meeting too, but they’re all in different locations and time zones. By the time you coordinate everybody’s schedule and arrange a meeting, a month or more has gone by and no decision has been made.

Sound familiar?

That was my experience when I worked at Motorola and Polaroid many years ago, and based on the nodding heads I see at conferences when I describe this scenario, my guess is that nothing much has changed.

In order to keep pace with the rapid pace of change — in the competitive landscape, customer expectations, regulations, and so on — companies need to make smarter decisions faster. It’s the promise of Big Data, Business Intelligence, and Analytics. But those technologies are worthless if companies don’t also transform and accelerate their decision-making processes. Just ask Target.

In yesterday’s Wall Street Journal, a front-page article detailed some of the factors that have contributed to Target’s reversal of fortune these past few years. Here are a couple of excerpts that caught my attention (emphasis mine):

The creative culture suffered in other ways. A plan to use mannequins in some stores for the first time, for instance, got bogged down in months of testing and review earlier this year. Another initiative, to allow customers to order items online and pick them up from stores, was debated internally for years before finally being implemented in 2013.

Initiatives once left to divisional leaders to execute on their own became subject to consensus and extensive testing, say former executives. Even small projects, like a mobile app, became bogged under the weight of giant teams.

Sound familiar? Do your decisions get bogged down by months of testing and review (“analysis paralysis”), endless internal debates, the pursuit of consensus (to cover everybody’s ass in case something goes wrong), and the weight of giant teams?

In a blog post last year, Tony Martins, President at Tony Martins & Associates (and formerly the VP of Supply Chain at Teva Canada and at ratiopharm) described a similar scenario:

It has been my experience that in the vast majority of cases where the unexpected occurs, the person who encounters the problem can’t resolve the problem. I have also observed that when the unexpected occurs, people are stymied by how to resolve the problem, whom to get a resolution from, who will decide, etc. Thus, the net is cast wide and the number of people who are called upon is fairly large since you don’t really know how the problem will be solved and therefore you don’t know who exactly will do it.

Meetings, then, are the best known device in organizations to gather several people from multiple disciplines to look at this unexpected thing and figure out what to do. But they have a massive obstacle: everybody has to be physically in the room at the same time which then leads to the difficulty of finding time on everybody’s calendar at the same time; which is what causes the delay between the event and the meeting.

Tony advocates the use of social networking technology to enable people to work in what he calls “NOW mode” — a term he uses to refer to an attitude of “If a problem happens now, we resolve it now.” In his first experience using this technology and approach in 2005, problem resolution times collapsed from 4 months to a few hours within 6 months!

I agree with Tony that, in most cases, using social networking technology to communicate and collaborate is a more effective approach to resolve problems (and innovate) than holding meetings. But technology is never a silver bullet, and unless companies also change their decision-making processes and “walk the talk” on empowering individuals and teams to make decisions, the types of problems witnessed at Target and elsewhere will persist.

“Since Mr. Steinhafel’s departure [as CEO of Target], top executives have been given more freedom to plot strategy and enact projects — like putting mannquins in stores,” reports the WSJ. The sad truth: it shouldn’t have been so difficult.