High Velocity Decision-Making

In the book we talk about how organisational agility is not just about speed. Speed is desirable of-course, and an increase in velocity may well be an outcome and a benefit of becoming more agile as a business but heightened agility is really all about manoeuvrability (or speed of response) and momentum, which is not quite the same thing.

Key to this idea of manoeuvrability is how you make decisions. In his most recent shareholders letter Jeff Bezos of Amazon talks about how focused they are on ‘high velocity decision-making’ as a way of retaining agility as they scale. Many larger, well-established businesses, he says, make high-quality decisions, but they make them slowly. So making high quality but also high-velocity decisions helps retain the nimble, responsive abilities of a much smaller, younger business.

It’s important not to operate by a one-size-fits-all decision-making process. Many less complex, more easily adapted decisions can be subjected to a more light-weight process. In many cases, decisions can be made with around 70% of the information you wish you had, which is important since waiting for the 90% can easily mean you’ll be too slow, and slow decision-making can be more costly than needing to do a quick course correction if necessary as long as you jump on misalignment quickly. At Amazon they also use the phrase “disagree and commit” as a useful way of acknowledging disagreement whist preventing a lack of consensus from slowing things down.

In my experience there is also a high correlation between the degree of empowerment and autonomy present in teams and how quickly you’re able to make decisions and therefore the manoeuvrability of the organisation. In slow-moving environments it might work to have most of the decision-making power centralised at the top of the company but amongst rapidly shifting contexts this practice is not fit for purpose. Yet as Mark Raheja points out, there are many different things that can contribute to this greater (but safe) devolvement of authority including the clarity that comes from being more explicit about decision rights, how you set the team up, more agile forms of governance, the ownership of team members and the willingness of senior staff to let go. And there’s a whole bunch more intangible (but no less powerful) factors that I think contribute to this, not least whether the culture supports greater autonomy or acts to stifle it, the behaviour and expectation of leaders in the organisation (at every level), and the degree of trust that permeates the business.

Once again, the ability to make decisions quickly and become a more responsive organisation is as much about culture and people as it is about process.

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