Get Faster

Economic, social, and political uncertainty. 

This is the very real business context for 2023. 

What do you, as a business leader, need to be focused on to ensure that your organization is able to overcome these obstacles and achieve your growth and profitability goals for the year?

A preponderance of research (and real-world experience) suggests you should be paying attention to a very telling but under-the-radar KPI: Time-To-Decision. 

WHY SPEED?

“The return on each type of decision largely depends on the same metric: SPEED.”

Let’s start with McKinsey, who has spent a good amount of time on the connection between decision making and company performance. To lay the foundation, McKinsey recognizes that not all business decisions are the same. In fact, they use an "ABCD" framework to differentiate decisions and the different approaches required for each:

• Ad-hoc - infrequent, low risk, unanticipated decisions

• Big Bet - infrequent, high-risk decisions that have the potential to shape the future of an organization

• Cross Cutting - more frequent, high risk decisions made by a series of small, interconnected decisions made by different groups as part of a collaborative, end-to-end decision process

• Delegated - frequent, lower risk decisions that can be pushed down in the organization. 

Yet despite the differences across these groups, the return on each type of decision largely depends on the same metric: SPEED. 

To this point, a recent McKinsey global survey sought to compare and contrast top-rated decision-making organizations versus everybody else. The answer they found was simple and straightforward: the best organizations make good decisions fast and execute them quickly. And the organizations that did so were 2X more likely to report superior returns on decisions and posted higher overall company growth rates.

In case you’re skeptical of McKinsey’s findings, know that strategic management research has been confirming the connection between decision speed and company performance since 1988.

For example, in one of the first studies of its kind, researcher Kathleen Eisenhardt (now at the Stanford Technology Ventures Program) examined a group of 19 firms concluding that the faster the decision speed, the greater the sales and profitability. 

This connection has since been reinforced by researchers like J Robert Baum and Stefan Wally who conducted a 4-year longitudinal study across 318 companies in 10 different industries and identified that strategic decision making speed predicts the firm’s subsequent growth and profitability.

THE CONNECTION

“Fast decisions are far better than slow ones and radically better than no decisions.”

But why is there such connection between speed and overall company performance? 

At executive and cross-cutting levels, uncertainty makes achieving clear direction harder and creates delays and second guessing downstream in execution. At the edges, a similar lack of clarity slows critical response time, frustrating customers and limiting your ability to nimbly capture opportunities as they arise.

All of this friction is the exact opposite of the kind of focus needed to achieve overall company results - especially in dynamic environments like 2023.

The conclusion? To succeed now, you can't just make good decisions, you need to make them fast.

For example, Dave Girouard is a current startup founder (Upstart) and former president of Google Enterprise, learning much of his decision making approach from people such as Eric Schmidt and Larry Page. Girouard says today, he’s building a culture at Upstart “deeply driven by the belief that fast decisions are far better than slow ones and radically better than no decisions.”

GET FASTER

“Formalized decision processes don’t only outperform informal ‘make it up as you go’ approaches, they also reduce Time-To-Decision”

Ok, so if decision speed is so connected to company overall performance inclusive of sales, growth, and profitability - how do we manage it?

At HiveWise, our core focus is improving both strategic and operational decision making. We have benchmarked increases in decision making speed with our clients as much as 85%. Based on our experience, there are a range of proven approaches to managing and optimizing decision velocity. 

1. Create A “Decisions That Matter” Inventory - One of the first steps to managing decision speed is to get your arms around the full scope of the decisions you face. Work together to identify the strategies, problem-solving, prioritizations, new policies, and fast responses that will be required of your team in the foreseeable next quarter and beyond. 

2. Prioritize & Delegate - It's then important to prioritize this inventory across multiple criteria to ensure the right people are focusing on the right things at the right time. A key part of this step is deciding to delegate as much as possible out to the edges of the organization to ensure enough time and resources are available to address high-risk / high impact decisions. Note: the next section (formalized decision process) is equally important to delegated decisions since much of that process will take place with less direct executive involvement/ oversight. 

3. Formalize Decision Process (Every Time) - Formalized decision processes don’t only outperform informal “make it up as you go” approaches, they also keep teams focused, encourage trust, and reduce Time-To-Decision. This includes. 

• When: Assign Due Dates. According to Girouard, “deciding on when a decision will be made from the start is a profound, powerful change that will speed everything up.”

• What: Clarify The Objective. Keep everyone focused by declaring what we are fundamentally trying to decide. As clarity expert Ann Latham says “This simple step will save your company thousands of hours every month, if not every week or day.”

• Who: Clarify Roles: As Paul Rogers and Marcia W. Blenko stated in the Harvard Business Review, “the most important step in unclogging decision-making bottlenecks is assigning clear roles and responsibilities. The result is better coordination and quicker response times.”

• Who: Manage Stakeholders: The most common approach to reducing decision time is to reduce the number of people involved. Yet, by using collective intelligence tools, you can (and should) INCREASE the number of stakeholders while still reducing time. As Dave Girouard says, “input from others will help you get to the right decision faster, and with buy-in from the team.”

• How: Define Key Questions & Criteria: This where you lay out the logical approach to how you are going to arrive at the decision. This process should be fair and transparent… not only to keep everyone on track, but also to speed up adoption and execution. According to W. Chan Kim and Renée Mauborgne (HBR), “fair process profoundly influences attitudes and behaviors critical to high performance. It builds trust and unlocks ideas. With it, managers can achieve even the most painful and difficult goals while gaining the voluntary cooperation of the employees affected. Without fair process, even outcomes that employees might favor can be difficult to achieve.”

4. Single System of Record - We can’t manage what we can’t see… and it’s impossible to “see” decision making if these processes aren’t managed in a central place. Decision making is one of the last critical business processes that have no system of record. In fact, managing decisions today is equivalent to managing sales pre-CRM… we basically just check in with people and ask them how they are doing. This isn’t sustainable, and a decision system of record is quickly becoming core business infrastructure. 

Centralizing key decision data such as the people involved, process steps taken, data used, and calendar days spent can not only increase governance, but will create an entirely new form of intellectual property. The ability to centrally reference past decision cycles will enable your team to develop, improve, and share best-practices. You will be able to start setting goals for Time-To-Decision metrics for different types of decisions, making sure that resources and time spent align with the associated value and speed requirements of the business.  

THE BOTTOM LINE

“Time-To-Decision is tightly tied to your organization's performance across sales, growth and profitability.”

If you only take one thing away from this article, I hope it’s this: one of the most important things to increasing speed and outcomes of decisions (large and small) is to start by deciding how to decide first. 

Dave Girouard puts it this way, “if, by way of habit, you consistently begin every decision-making process by considering how much time and effort that decision is worth, who needs to have input, and when you’ll have an answer, you'll have developed the first important muscle for speed.”

I encourage you to adopt as many of the above approaches as you can and see how it impacts your ability to move faster as a team. Take initial steps, measure the results, and scale the success until it becomes the new normal at your organization. 

By the way, if you take a SECOND thing away from this article, I hope it’s this: HiveWise is the software platform designed to make everything we just talked about easier. Not only to enable your organization to speed up individual decision making (and execution) - but all the decisions that matter. 

It won’t be enough to ensure one or two decisions are fast, explainable, and broadly supported. We need to turn this into the standard operating procedure for how your organization works. That’s how you turn big audacious enterprise goals into achievable reality - even in a crazy time like this. And this is why Time-To-Decision isn’t just an important metric for individual decisions or managers, it’s an important enterprise performance metric - one that is tightly tied to your organization's performance across sales, growth and profitability. 

The time to get faster is now. Let's go.