Does Your Company Have a System for Making Decisions?

In an interview with The Wall Street Journal, James Quincey, the new chief executive officer of Coca-Cola Co. said that he is hoping to “shake off a culture of cautiousness” within the company and encourage his team to “make mistakes”.

In a letter to investors, Amazon founder Jeff Bezos noted that in making decisions with his team, he commonly relies on one philosophy: “disagree and commit.” If there is no consensus among the leadership team, a decision is made — and Mr. Bezos asks that the leadership team makes their objections known and then commits to the plan. This allows the organization can move ahead without consensus – and allows everyone’s voices to be heard.

Both of these leadership philosophies revolve around the idea that failure is part of doing business. And that’s what led to the discussion in our office. For contractors, is failure part of doing business? In an increasingly competitive market, developing new services and diversifying revenue streams are part of a sustainability strategy. However, not every new strategy is going to work — and that means that failure is an inevitable part of market-driven strategy.

Here are some rules of thumb for executive teams to follow.

  • Don’t allow your team to be paralyzed by decision making. Launching a new service line, agreeing to a value-based contract, investing in new technology, initiating a new merger or acquisition, creating a partnership — these are big decisions that require decisive action. Decide yes or decide no — but do the analysis and make a decision. It is the responsibility of a leader to move their organization forward and to assure the organization and its team are positioned and prepared. As Mr. Bezos notes in his advice, that doesn’t mean everyone has to agree with every aspect of every decision you make, but it does mean you need to actually make a decision.
  • Once you’ve made your decision, your team needs to find a way to help your internal stakeholders — from the board room to the front line — embrace the new direction. Committing to a new strategy or focus requires your management team to master the art of managing change. This includes communicating with your team about why the changes are being implemented, building a culture that incentivizes and embraces change, and developing the talent and competencies needed to manage change.
  • Your team needs competencies for metrics-based management and management process excellence to develop and operationalize new strategies effectively. For contractors, where payroll is the largest single cost and consistent service delivery vital, an effective workforce management solution is essential. Effective workforce management provides the metrics to understand the costs and risks involved and the tools to manage new projects.
  • Your team needs the right workforce management technology to manage change. Unless managers have real time information on time and attendance, schedules, orders, inspections, and other critical metrics in good time, problems will be reported late or worse, remain unknown.

Some organizations fail to act in the face of new challenges or opportunities. Looking ahead, the writing is on the wall that their market position is eroding and cash reserves are dwindling. They fail to make final decisions about their plan or if they have a plan, it isn’t implemented in a timely, effective manner. Why does this happen?

The “why” question is where it gets complicated, but often it is because the contractor doesn’t have the workforce management tools to accurately analyze what is going on now and to manage new projects easily.

  1. The chief executive officer doesn’t have the right information on environmental analysis, financial feasibility analysis, or planning tools to make market-oriented strategy decisions.
  2. The degree of downside risk, and return-on-investment is not understood. Doing nothing can be more risky than embracing change.
  3. The organization is risk adverse because of past failures and will not approve a proposal with downside risk.
  4. The management team lacks the transactional tools — metrics-based performance analysis, real time project management control, and service reporting, to go from idea to service.