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Decision Making

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http://www.reinventingorganizationswiki.com/Decision_Making

The topic of decision-making discusses how decisions are made within organizations, and by whom. In Teal organizations, decision-making authority is truly distributed throughout the organization.

A new perspective

In Teal organizations decision-making is highly distributed. Front-line individuals or teams have the opportunity to make decisions that affect their work. While these decisions may not need to be validated by a hierarchy or consensus, it is expected that experts, and those affected, should be involved. 

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Every historical stage has given birth to a distinct perspective on decision making and to very different practices. In earlier periods, decisions may have been made at the top. Today, some organizations consciously try to "empower" people at the bottom. 

In practice

The advice process

Almost all Teal organizations use, in one form or another, what an early practitioner (AES) called the “advice process.” 

It comes in many forms, but the essence is consistent: any person can make any decision after seeking advice from 1) everyone who will be meaningfully affected, and 2) people with expertise in the matter.

Advice received must be taken into consideration. The point is not to create a watered-down compromise that accommodates everybody’s wishes. It is about accessing collective wisdom in pursuit of a sound decision. With all the advice and perspectives the decision maker has received, they choose what they believe to be the best course of action.

Advice is simply advice. No colleague, whatever their importance, can tell a decision-maker what to decide. Usually, the decision-maker is the person who first noticed the issue, or the person most affected by it. 

In practice, this process proves remarkably effective. It allows anybody to seize the initiative. Power is no longer a zero-sum game. Everyone is powerful via the advice process. 

It's not consensus

We often imagine decisions can be made in only two ways: either by the person with authority (someone calls the shots; some people might be frustrated; but at least things get done), or by unanimous agreement (everyone gets a say, but it can be frustratingly slow).

It is a misunderstanding that self-management decisions are made by getting everyone to agree, or even involving everyone in the decision. The advice seeker must take all relevant advice into consideration, but can still make the decision. 

Consensus may sound appealing, but it's not always most effective to give everybody veto power. In the advice process, power and responsibility rest with the decision-maker. Ergo, there is no power to block.

Ownership of the issue stays clearly with one person: the decision maker. Convinced she made the best possible decision, she can see things through with enthusiasm, and she can accept responsibility for any mistakes.

The advice process, then, transcends both top-down and consensus-based decision making. 

Benefits of the advice process

The advice process allows self-management to flourish. Dennis Bakke, who introduced the practice at AES (and who wrote two books about it), highlights some important benefits: creating community, humility, learning, better decisions, and fun.

  • Community: it draws people, whose advice is sought into the question at hand. They learn about the issue. The sharing of information reinforces the feeling of community. The person whose advice is sought feels honored and needed.
  • Humility: asking for advice is an act of humility, which is one of the most important characteristics of a fun workplace. The act alone says, "I need you“. The decision maker and the adviser are pushed into a closer relationship. This makes it nearly impossible for the decision-maker to ignore the advice.
  • Learning: making decisions is on-the-job education. Advice comes from people who have an understanding of the situation and care about the outcome. No other form of education or training can match this real-time experience.
  • Better decisions: chances of reaching the best decision are greater than under conventional top-down approaches. The decision maker has the advantage of being closer to the issue and has to live with responsibility for the consequences of the decision. Advice provides diverse input, uncovering important issues and new perspectives.
  • Fun: the process is just plain fun for the decision-maker, because it mirrors the joy found in playing team sports. The advice process stimulates initiative and creativity, which are enhanced by the wisdom from knowledgeable people elsewhere in the organization.

Steps in the advice process

There are a number of steps in the advice process:

  • Someone notices a problem or opportunity and takes the initiative, or alerts someone better placed to do so.
  • Prior to a proposal, the decision-maker may seek input to sound out perspectives before proposing action.
  • The initiator makes a proposal and seeks advice from those affected or those with expertise.
  • Taking this advice into account, the decision-maker decides on an action and informs those who have given advice.

Forms the advice process can take

Because the advice process involves taking advice from those affected by a decision, it naturally follows that the bigger the decision, the wider the net needs to be cast - including, if these roles exist, the CEO or board.

For minor decisions, there may be no need to seek advice. For larger decisions, advice can come through various channels, including one-on-one conversations, meetings, or online communication. 

Some organizations have specific types of meetings to support the advice process, or follow formal methods. (See Buurtzorg and Holacracy below). Some organizations choose to have circles made up of representative colleagues who go through the advice process on behalf of the whole organization.

When decisions affect large numbers, or people who cannot meet physically, the process can happen via the internet.

  • The decision-maker can post a proposal on the company blog and call for comments or invite email responses and then process the advice they receive.
  • The organization can use decision-making software like Loomio, a free and open-source tool. The process for using the advice process on Loomio: start a discussion to frame the topic and gather input, host a proposal so everyone affected by the issue can voice their position, and then the final decision-maker specifies the outcome (automatically notifying the whole group).

Underlying mindsets and training

The advice process is a tool that helps decision-making via collective intelligence. Much depends on the spirit in which people approach it. When the advice process is introduced, it might be worthwhile to train colleagues not only in the mechanics but also on the mindset underlying effective use.

The advice process can proceed in several ways, depending on the mindset people bring to it:

  • The initiator can approach it authoritatively ("I don't care about what others have said" or, alternatively, "I fully comply with what others - someone highly respected, or the majority - have said").
  • They can approach from a perspective of negotiation or compromise ("I'll do some of what they say so they're happy, but it will increment my frustration account by 1").
  • They can approach it co-creatively, which is the spirit of the advice process ("I will listen to others, understand the real need in what they say, and think creatively about an elegant solution").

Role modeling

When the advice process is first introduced, the founder and/or CEO need to be role-models. Power is initially held by organizational leaders, and it doesn't get distributed by magic - successfully distributing leadership requires careful, proactive effort. By role modeling, others will take cues from their behavior.  

Role modeling can take several forms: 

  • When you want to make a decision, pause and ask: Am I the best person for this decision? (That is, the person most closely linked to the decision, or the person with most energy, skill, and experience to make it?). If not, ask the person you think is better placed to take the initiative. If he/she doesn't want to, you might be best placed after all.
  • If you are the right person to make a decision, identify those from whom you should seek advice. Approach them and explain what you are doing. ("I'm playing by the advice process. Here is an opportunity I see. This is the decision I propose to take. Can you give me your advice?"). You can also share who else you are asking for advice. Once you've received advice and made your decision, inform those you consulted (and anyone else who should know).
  • When colleagues ask you to make a decision ("What should I do?"), instead ask them "What is your proposed decision?". In the same vein, state clearly that you no longer give approval for decisions. Instead, share your advice and suggest who else to ask. Remind them the decision is theirs.

For many leaders, unlearning the habit of making all the decisions is hard. It requires commitment and mindfulness. If you find yourself falling into the old pattern, take the opportunity to acknowledge your mistake, and restate the importance of the process. This can turn a mistake into a powerful learning moment. Better habits are formed through repeated practice.

Consent-based decision making

A variation of the advice process is consent-based decision making. "Consent" is different from "consensus" in the sense of unanimity. The consent principle says that a decision can be made as long as no one has a reasoned, substantial objection (also known as a "block"). Consent doesn't mean everyone loves the decision, but that they can live with it. 

In practice, consent means that if one person raises a principled objection, the decision is blocked. The proposer must pause and, together with the objector, devise a solution that overcomes the objection. A block in a consensus process is a signal to the whole team to "swarm" to understand the objection and problem solve.

Giving such power to a principled objection can be both valuable and dangerous. Valuable because sometimes a single person senses something important that no one else sees. On the other hand, such power can be abused if people block decisions for reasons other than purpose. Groups that use consent-based decision-making often take blocking and shared understanding about policies and culture around blocking very seriously for this reason. (For a real-world example, see the Enspiral Decision Agreement).

Some methods, like Holacracy, deem an objection valid only if the argument passes stringent tests, such as it makes matters worse. A colleague cannot block a proposal simply because he or she thinks they have a better proposal, or because they don't love an idea. 

The advice process within a hierarchy

Some organizations want to move toward self-management, but cannot move away from hierarchy completely. Others, especially large organizations, prefer to adopt interim steps. This can be part of a transition to self-management.  

AES, the 40,000 employee company where the term "advice process' was coined, operated with remnants of a hierarchy. Anyone could initiate the process, but it was mandatory to consult certain categories of colleagues. These might include one's superiors, or even the board.

Sources that inform decision-making

Teal organizations tend to take a broad range of sources into account:

  • Rationality: Many think that rationality rules, and is the legitimate basis for decision-making. Teal considers rational, analytical approaches to be critical, but not the only source to inform decision making.
  • Emotions: Whereas the modern-scientific perspective is wary of emotions, Teal recognizes that wisdom is to be found there when we learn to inquire into their significance: "Why am I angry, fearful, ambitious, or excited? What does this reveal about me or about the situation that is unfolding?"
  • Intuition: Wisdom can be found in intuition, too. Intuition honors the ambiguous, paradoxical, non-linear nature of reality. We unconsciously connect patterns in ways that our rational mind cannot. Many great minds, like Einstein, had a deep reverence for intuition. They claim it is a muscle that can be trained. Learning to pay attention to intuitions, to question them for guidance, allows intuitive answers to surface.
  • Paradoxical thinking: A Teal breakthrough is the ability to live with paradox; beyond "either-or" to "both-and" thinking. Breathing in and breathing out illustrates the difference. Either-or thinking sees them as opposites. Both-and thinking sees them as needing each other. The more we can breathe in, the more we can breathe out. One such paradox is the advice process: it is a decision-making process that at once encourages individual initiative and the voice of the collective. It's both-and.

Frequently asked questions

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What prevents people from simply not requesting or ignoring advice?

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Who decides who gets to be the decision maker?

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If we accept that an organization has its own sense of direction, how do we find out where it wants to go?

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Can this type of decision-making be upheld in a time of crisis?

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What about decisions that affect the whole organization? Isn’t it impractical to solicit feedback from large numbers?

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Is there no room for centralized planning? Aren’t we losing something important here?

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Does decision-making in Teal organizations require multiple bottom line accounting systems?

Concrete examples for inspiration

Here are some practical examples from organizations that have adopted Teal decision-making practices.

Making a decision that involves a large number of people

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Buurtzog

Health care - Netherlands - 9,000 employees - Nonprofit

Buurtzorg has found an effective way for making decisions that affect large numbers of people.

Formal process for making decisions within a team

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Buurtzog

Health care - Netherlands - 9,000 employees - Nonprofit

Buurtzorg uses a formal when decisions are made within a team.

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Holacracy

Organizational Operating model

Holacracy uses two types of decision making: "autocratic" and "integrative", both of which, on close scrutiny, can be seen as variations of the advice process.

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Morning Star

Food processing―United States―400 employees―For profit

Morning Star uses the advice process. Here is an example: it was used when a new strategy was proposed that would affect all employees. 

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Enspiral

Social Enterprise Network―New Zealand & International―300 contributors―Hybrid

Enspiral is a distributed collective using a consent-based advice process emphasizing online communication, inclusion, and individual autonomy. See details here.

Related topics


https://en.wikipedia.org/wiki/Decision-making

In psychology, decision-making is regarded as the cognitive process resulting in the selection of a belief or a course of action among several alternative possibilities. Every decision-making process produces a final choice; it may or may not prompt action. Decision-making is the process of identifying and choosing alternatives based on the values and preferences of the decision-maker.


Don’t Make Me Think! A Common Sense Approach to Web Usability

The point of testing is not to prove or disprove something. It’s to inform your judgment. People like to think, for instance, that they can use testing to prove whether navigation system “a” is better than navigation system “b”, but you can’t. No one has the resources to set up the kind of controlled experiment you’d need. What testing can do is provide you with invaluable input which, taken together with your experience, professional judgment, and common sense, will make it easier for you to choose wisely—and with greater confidence—between “a” and “b.”


Links  

https://en.wikipedia.org/wiki/Category:Decision-making

http://www.dmoz.org/Reference/Knowledge_Management/Knowledge_Creation/Problem_Solving/Decision_Trees/

http://www.dmoz.org/Computers/Software/Databases/Data_Warehousing/Decision_Support_Tools/

Subcategories

`0-9

`A

`B

`C

`D

`E

`F

`G

`H

`I

`J`K`L

`M

`N

`O

`P

`Q

`R

`S

`T

`U

`V`W`X`Y`Z

Index

```[[[ёёё

` Decision-making

`A

` Advice (opinion)

Ahoona

Anthony triangle

`B

` Binary decision

`C

` Choice

Choice architecture

Configurator

Consensus–expectations gap

`D

` Decentralized decision-making

Decision aids

Decision cycle

Decision engineering

Decision EXpert

Decision fatigue

Decision Model and Notation

Dynamic decision-making

`E

` Egonomics

Emotional bias

Emotions in decision-making

ERulemaking

Evidence-based design

`J

` Judge–advisor system

`L

` Lock-in (decision-making)

`M

` Movement pattern analysis

Multiscale decision-making

`P

Participatory Decision Making

Probability matching

`R

` Rank reversals in decision-making

Robust Decision Making

`S

` Shared decision-making

Social decision making

Strategic assumptions

`T

` Trade-off

Treatment decision support

`U

` Ulysses pact

Uncertainty analysis

`W

` Wild card (foresight)

`Y

` Draft:Young's Law

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