What is Decentralized Decision-Making? (and how to do it in a small business)
Decision-making is a heavy burden for small business owners. Just think about the number of choices you’ve made this week, let alone this month or in the past year!
And when all of these weekly, monthly, and yearly decisions fall on you, it not only bogs you down and burns you out, it slows the growth of your business and creates an internal culture of reliance and dependency.
This idea is backed by science: The American Medical Association describes decision fatigue as “a state of mental overload that can impede a person’s ability to continue making decisions”.
So, what can you do instead?
Everyone from the AMA to Master Class have published lists to help you address decision fatigue; but the recommendations all boil down to the same advice. Pare down the number of decisions you need to make in a day to the bare essentials — the critical ones that actually need your attention and expertise.
For everything else, delegate or eliminate those decisions.
Even in a small team this advice can go along way. All that’s needed is for business owners to spread the decision-making throughout the team so that the individuals who are closest to a specific area of work are expected and empowered to make decisions on their own.
This is NOT to say that they have free rein or no guidelines. In fact, I highly recommend you begin implement the 7-Step Decision-Making Process before putting decision-making power into the hands of others. This will ensure that your team has a shared system for making and communicating decisions; and for identifying which ones should be shared with others before they are implemented.
In a large corporation, there are a lot of people and many levels of leadership, so allowing others to make important decisions is inevitable. That’s not to say it’s always done well, but it has to happen for the company to function.
The same is true for a small business.
Even if you COULD make all the decisions, holding all the responsibility and authority to one person is actually an obstacle to growth and efficiency. For you as the business owners it means everyone comes to you with all the questions.
Here’s what it looks like when all the decisions are held by one person:
You are constantly interrupted with questions about how to handle day to day operations in your business
If you take vacations, you still check your emails and text messages and often need to reply to people, solve problems and put out fires.
When you come back from vacation you have to work extra hard to catch up because of the pile of unanswered questions waiting for you.
Creating a culture of shared accountability for decisions means that the team members with the most direct experience or knowledge are empowered to do the right thing without checking with you first.
What does decentralized decision-making look like in a small business with just a few employees or for a solopreneur who has a small team of contractors?
There are two elements needed to create a culture of decentralized decision-making in your business: Transparency and Accountability. Transparency: Step 1 to Decentralized Decision-Making in a Small Business
Whether you lead a team of employees or a team of contractors in your small business, a key part of taking the decision-making pressure off you as the business owner is to be open and honest with your team.
Each team member needs to understand...
The values and mission of your business
Who you’re serving and how
How to use a standard decision-making process
What’s going well in your business and what needs more attention
What their role is in achieving the goals of the company
BECAUSE... knowing all of these things helps them make decisions in their roles that align with your business priorities.
This level of transparency is also going to prevent you from feeling like you need to micromanage your team’s work. Freeing them up to help grow the business from THEIR zone of genius (which is why you hired them in the first place, right?).
Bottom line: The more your team knows, the more they can help!
One of the best ways to create this level of transparency is to engage your team in setting high-level goals each quarter and then create a public space where you post updates and track trends on the most important business goals each week. A whiteboard, digital dashboard, or a simple poster will do; as long as everyone can see it!
The second part of transparency is for each team member to be publicly accountable for their work on these goals. Two mechanisms for this are:
Using a project or task management tool where individual team members routinely track and update status with transparent deadlines and expectations.
Holding a daily check-in meeting where each team member shares progress from the day before and commits to their top priority task of that day. These meetings should be no more than 10 to 15 minutes and can be hugely helpful in quickly addressing roadblocks and getting insight from other team members.
TIP: Both of these tools work best with consistent practice, so make sure you are ready to reinforce the behaviors and processes before implementing them.
Shared Authority: Step 2 of Decentralized Decision-Making in a Small Business
Speaking of trusting your team in their zone of genius... The second element of decentralized decision-making is to entrust team members with the authority to implement decisions without getting approval from the top.
In other words: allow people to be the expert and the decision maker in their role. Each team member can then make appropriate choices related to their work.
AND (this “and” is key, BTW) be okay with the fact that sometimes their decisions will be different from what you would choose.
This can be hard — especially for those of us who like to be in control. Yes! But it is a kind of hard that will actually make other parts of your business LESS hard.
Bottom line: Trust your team to make decisions in the areas they are in charge of!
BTW, Making effective decisions is a skill that is learned through practice and reflection. So when the result of a decision isn’t what you would hope for, don’t blame the decision maker. Focus instead on how to improve the quality of their decisions and the communications around that decision.
If you truly want to get relief from the pain of being the center of all decision-making you have to let go of having everything done exactly as you would do it.
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