Hi! managers: Execs must pave the path for smooth decision making

Real-time decision-making is difficult. First, time is almost always a factor. Rarely do teams have open-ended deadlines. Customers and management both impose time requirements for a decision. Second, typically not all of the desired information is available for a decision. So, some element of experience and instinct is involved. Third, decisions by definition require making a trade-off between one or more metrics. If there isn't a trade-off involved, it's not really a decision.

Small companies typically have an advantage in that the top executive can make most key day-to-day decisions. As a result, the organisation aligns behind that decision and moves forward. This tactical agility is a competitive advantage for small businesses - and they need to leverage it. The problem: it doesn't scale. As the company grows, the top executive will

not have the bandwidth to make all the key day-to-day decisions.

Obviously, as the company grows, it must select strong and capable personnel. But, that's not enough. The decision-making and communication processes must also change.

Growing companies typically expand in compartmentalised functions: sales, engineering, operations, finance, materials, human resources, etc. These functions gain power as they grow. And, if not managed properly, their attention to their individual metrics can add bureaucracy.

One method to manage decision-making at a larger company is to create a set of product core teams. In the end, the success of the products will drive the success of the company. The key functions within the company need to matrix into and support the product core teams. An overall core team lead is assigned. Then, each of the representative functions assigns a key decision-maker for their organisation to the product core team.

The core team would then make the decisions for their product - weighing the input from the functional representatives on their team.

For this to be successful, the executive leadership at the company needs to do three things effectively: clearly communicate the overall business strategy, truly empower the core teams to "own" the decisions and clearly define who has "veto" power for the core team decisions. Failure to execute on any of these items will slow the decision-making process.

Real-time decision-making, even for a small company, is tough. Trade-offs are always involved. But, as a company grows, balancing these trade-offs can be much more difficult organisationally. A product core team approach is one way to empower timely decision-making.

Jeffrey D Nygaard is vice President & country manager of Seagate Technology. Follow his column every fourth Monday of the month.