- Manager - In this module we record all the problems we’ve encountered and track the solutions;
- Me - Great work! Why are many problems still open since 2024?
- Manager - Why does no one want to take responsibility for the proposed solutions;
- Me - I get it. If you were the owner who pays the salaries, would you be happy to pay a bunch of people for not solving problems and, worse still, not even to decide what to do?
Company means doing. To do, it’s necessary to decide. If this process doesn’t exist or doesn’t work, the result is stagnation.
Stagnation = failure.
THE 5 CAUSES OF DECISION-MAKING INCAPACITY
Today’s decision-making power is drastically lower than it was 20 years ago due to several factors. Let’s see which:
1) Micromanagement
Low decision-making autonomy slows down the leadership chain to make decisions. And if there’s also a senior manager at the top (a situation made worse by one or more older founders), micromanagement and stagnation are practically guaranteed.
Micromanagement creates bottlenecks (or directly “stoppers”) in the decision chain, drastically extending execution times and nullifying individual motivation to take responsibility.
2) Unclear processes and objectives
Without objectives, making a choice is practically impossible: what’s important to do and not to do if you don’t know where the company needs to go?
Organizational gray areas, undefined processes (who does what) and nonexistent or vague objectives cause disorientation and decision-making difficulties. On the other hand, processes that are too strict and detailed measurements have the opposite effect: infodemia. Too much of a good thing and the “decision fog” returns—equivalent to navigating by sight.
3) Inefficient decision chains
Organizational charts and processes don’t go well together. The first is hierarchical, while the second is customer-oriented. On average, the guideline is set by the first element (for context: the most inefficient for the company).
The wrong organizational tool combined with the perception of “what’s right” defined instead by processes creates decision-making confusion because it’s unclear who has higher priority in the various choices (hierarchy or customer?).
Should planning meetings be prioritized, or should the department be stopped due to lack of material?
4) Activities that do not add value
Even though people think they’re working hard and well, 95% of our activities do not add value. It means that the customer doesn’t benefit from these actions either, and neither does the profitability of the balance sheet.
So you start badly right away: if you don’t know what generates value and what doesn’t, any decision could be like throwing dice.
Then add the bureaucracy, both external (mandatory requirements, laws, regulations, etc.) and internal (policies, procedures, approvals, etc.). Between the two, even though the first stirs up a lot of controversy, internal bureaucracy is at least 10 times more limiting than what’s imposed by the external context.
5) Weakening of social capital
Even though the spotlight is directed elsewhere, this is one of the most weakening aspects of decision-making power and the growth of the individual.
Loss of identity (“I was trained this way and now the world is too different” = disorientation), a culture of dependency (“but what’s the point? Do as little as possible at work and don’t take responsibility—you always earn the same anyway,” as quoted), economic stagnation (compared to the ’70s–’90s), protection barriers of the status quo removed by technologies (like the internet, among the most democratizing technologies. See publishing, films, etc.), misleading digital and media bombardment, new social trends (such as quiet quitting), the “florida effect” (complaining instead of acting, specific to the Italian ethnic group), fixed pay (yes exactly: variable pay increases decision-making capacity).
There are many causes, but first of all, the reduced inner development of the individual.
This triggers the self-protection bias, meaning the constant search for external culprits for existing problems and the attraction of credit for successes achieved: never the other way around, of course.
In business terms: if there’s a problem to solve, the responsibility is always someone else’s nearby manager, while if there are successes, then the credit is always and only the responsibility of the individual who implemented the solution. Since the solution often fails because the operating process isn’t known and because no action is taken on value-adding activities, then statistically it’s better not to do anything than to do the wrong thing.
This causes decision-making stagnation.
Solution
Good news: the solution is internal to the organization and you don’t need technologies, software, consultants, or other external nonsense. You can do it in-house without spending €1.
To transform the decision-making process of your company you must:
1) Define strategic objectives
Set the compass with clear, objective and well-defined goals.
Managers and all staff will make decisions based on long-term objectives.
2) Apply the organizational structure
Standardize processes and adopt management techniques to optimize the decision process: the most important is the communication system, meaning the standard process for cascading objectives, KPIs, rules of engagement, and escalation, to make decisions quickly and without bias introduced by group dynamics.
3) Invest in professional growth
Stop waiting for the Messiah: get up from your chair, stand tall, and start improving your decision-making, presenting, and negotiation skills in autonomy.
Don’t wait for the HR training program, the owner’s infatuation with a new consultant who’s great at selling, or an intervention from the government.
You alone.
But that’s a good thing: you have full freedom on what, how and when to do what’s necessary to improve and become an excellent decision-maker.
Study and apply business management best practices to improve any process, identify value-adding activities, cascade and pursue objectives—in order to make the right decisions.