Single Point of Decision Making

Just a thought on what Crisis Manage­ment and Mana­ging Comple­xity have in common – and where they differ:

Crisis situa­tions, where orga­niza­tions struggle for short-term survival, and complex situa­tions, where they need to find the most promi­sing pathways leverage oppor­tu­ni­ties and resources while avoi­ding damage and wasting time and money, have – at least – one thing in common: they need to cope with a high level of vola­ti­lity and uncer­tainty in decision making.

What differs is: In a real crisis, the prio­ri­ties and what needs to get atten­tion first, is quite clear and limited: liqui­dity, safe­guar­ding opera­tions and main­tai­ning client busi­ness while redu­cing costs to avoid further worsening of the situa­tion. In a complex situa­tion however, it does not seem to be so self-evident, what to focus: all of the before mentioned aspects might still be important, but also others, like (busi­ness model) inno­va­tion, laun­ching new products, inves­ting in digi­ta­li­sa­tion and auto­ma­tion, that have more of a long-term perspec­tive. Vola­ti­lity might be high as well, but the number of options and of the aspects that need conside­ra­tion in making decis­ions is high as well.

What complex and crisis situa­tions both require is speed and exper­tise in decision making and execu­tion – while complex situa­tions give a little bit more leeway of lear­ning expe­ri­ments and agile loops of proto­ty­ping as a crisis, where false decision might still create oppor­tu­ni­ties for lear­ning but always bear the risk of beco­ming the last decision taken. Ther­e­fore, having clarity on which role or team is autho­rized to decide is key – to avoid wasting time in sear­ching for the right person to talk to or in internal power strug­gles. There is a need for a Single Point of Decision Making.

But where is the right place of this single point of decision making?

For turn-around manage­ment a – tempo­rary – centra­liza­tion of the autho­rity to decide on top of the organization/unit or in a turn­around taskforce, seems to be a well-estab­lished, good prac­tice. But it comes with a price tag: Centra­liza­tion nearly always leads to narro­wing the perspec­tives and options considered in decis­ions or the crea­tion of bott­len­ecks.

For mana­ging comple­xity, incre­asing the number of aspects taken into conside­ra­tion while invol­ving more people and incre­asing the decision-making capa­city and the speed of lear­ning is key. Let the people decide, who are close to the issues, who have the required exper­tise and make sure they can bring enough perspec­tive (e.g. they see the big picture and have a clear orien­ta­tion purpose and prio­ri­ties). Ther­e­fore, the distri­bu­tion of autho­rity to the level and roles where the need to decide arises and where the highest compe­tency in regard of the specific decision can be found, seems to be adequate to achieve this.

Centra­li­zing autho­rity (on top) or distri­bu­ting it to dispersed roles that are still single points of decision making – two reasonable, but quite diffe­rent approa­ches for mana­ging chal­lenges that might look quite similar at first sight. Being able to distin­guish the two false friends of vola­ti­lity and uncer­tainty – crisis and comple­xity – might be a urgently needed compe­tency of leaders these days.

Der Autor Michael Moeller

… ist Mana­ging Partner der Bera­ter­gruppe Neuwaldegg. Er begleitet viele Orga­ni­sa­tionen bei ihrer agilen Trans­for­ma­tion, die sich mit Hilfe von Purpose, Selbst­or­ga­ni­sa­tion und entspre­chender Führung in komplexen und turbu­lenten Zeiten gut weiter­ent­wi­ckeln wollen. Gemeinsam mit Fran­ziska Fink hat er das Buch Purpose Driven Orga­niza­tions veröf­fent­licht und bietet im Herbst dazu wieder ein Weiter­bil­dungs­pro­gramm an.

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