Posted By : Markus Hesse
24th April 2019
Decision Making in an Agile World Road to Chaos or the Rise of Common Sense?

Blog Mini Series Part 1: Agile Mindset, Common Vision and Clear Strategy

Change has always happened in the civil society sector. But over the last few years change itself has changed. It has become faster, more fundamental and more surprising. Many organisations face challenges responding timely to the increasing speed of a fast changing environment. An increasing number of international and national CSOs, foundations and social businesses are moving towards agile operating models to accelerate their social impact. How does this affect their decision making processes?

Shifting at an organisational level from classic line management towards agile collaboration of self-organised teams often raises a few questions and concerns about decision making processes. Self-organised teams define the best way how to achieve their deliverables, develop work plans and monitor the progress of their activities, while focussing their effort on clearly defined outcomes. High performance teams show that depending on the situation, different team members will lead the group based on their skills rather than on their position. The key question is not “who can tell whom what to do?”, but rather a refreshing “what makes sense in this situation?”. The rise of common sense over a formalistic and rigid following of guidelines and regulations. So how does this work? Who makes what decisions? 

Key to success in the decision making architecture of modern organisations are clear roles and simple guiding principles. The purpose of this blog mini series is to share a few thoughts and experiences from various change programmes on the following four steps: 

  1. The big picture: Mindset, shared vision
  2. The groundwork: Priorities, roles and responsibilities
  3. The real stuff: Content decisions within and across self-organised teams
  4. The enabling stuff: Framework for administrative decisions (procurement, HR, IT, etc.)

In this mini series we explore each of these five steps and share some insights from our work with clients of all sizes, natures and mandates across the sector.


Step 1: The Mindset

Organisation = fine-tuned machine or living, adaptive organism?  

 

Still today, many executives look at successful organisations using the metaphor of a fine tuned machine,ensuring that processes are pre-defined to steer work across departments. Such organisations are often visualised by an organigram which looks like a work breakdown structure with different management levels, cascading down authority and decision making power.

The impact of such an approach is a high need for upfront clarification and descriptive regulations, often leading to a high level of bureaucracy – and slow decision making processes. The impact on the organisational culture can’t be underestimated. In many organisations with this mind-set, people focus on what they are allowed to decide, what are their boundaries, in a particular situation. The idea of the “machine mind set” is that decision power is cascaded down through hierarchy levels and that somehow the staff member gets all the guidance needed to make useful decisions in their daily work. A tool often used in this context is a document called “authority structure”. Often the development of such a regulatory guideline is seen as high value, because staff members use this exercise to reflect on decision making processes. The shelf-life of such an added value is often quite short; the document often outdated within weeks.

Being a consultant often means being a time limited guest and therefore being able to ask naive or stupid questions. Engaging with staff who are actually doing the day by day business, I often ask people: what are you deciding in this situation and why? Very often the response is either “I decide xyz, because that is what my organisational manual tells me to do” or even more desperate “I don’t know what to decide – such a situation is not covered by the book. I have to ask my boss.” Many people are so focussed on what they can or can’t decide, rather than focusing on what makes sense in a situation, who is impacted and should be consulted in that decision to get results. This machine metaphor views the architecture of decision making in organisations as a technical problem.

Another way to look at organisations is the metaphor of a living, adaptive organism, operating in an environment which requires the organism to change on an ongoing basis. This picture has been widely employed over the last few years, and we are using it when we talk about product life cycles or organisational health checks.  

Different species operating in different environments lead to different requirements in regards to their level of adaptability. We notice that certain species are better “adapted” to specific environmental conditions than others. We find bureaucratically  minded people tend to work most effectively in environments that are stable or protected in some way (like traditional international CSOs or Foundations) and that very different species are found in more competitive and disruptive environments, such as the environments of social entrepreneurs, high-tech firms and micro-electronics industries. In contrast to the machine metaphor, the organism model recognises that people have complex needs that must be satisfied if they are to prosper and work effectively.

Shifting the organisational model towards an agile, adaptive and customer centred way of working is a paradigm shift, particularly for large international organisations. It requires orchestrated change management. The consequences need to be considered and well thought through. However, once organisations make this evolutionary step, they rarely want to go back as the advantages outweigh the effort of the transition.

Running an organisation in an agile operating model while keeping the fine-tuned machine mindset just doesn’t make sense (not that it isn’t tried again and again).


The Basis: A shared vision and strategy

A vision statement describes the clear and inspirational long-term desired change resulting from an organisation or program’s work. It is the rally cry that motivates staff, Board members, management and supporters. The best visions are inspirational, clear, memorable, and concise. How long should such a statement be? It depends. The shortest two statements I’d consider powerful and effective contain only three words: “Equality for everyone” (Human Rights Campaign) or “A hunger-free America” (Feeding America). The longest one I came across which still is very powerful contains 32 words: “A world in which every person enjoys all of the human rights enshrined in the Universal Declaration of Human Rights and other international human rights instruments.“ (Amnesty International). As a rule of thumb it can be said that shorter is better. The Vision describes the WHY your organisation exists. They motivate people to join the movement or organisation and often are the cause for identifying with this cause.  As many organisations across the sector have a core competency in inspiring other people to join their cause, usually the vision statement is very well developed. If you aren’t sure how effective your vision statement is, just walk by your staff and supporters and ask them. If they don’t even remember what the vision statement is, you have a pretty solid indication that there is a need for action. If they have got the gist of it but have problems to recall the statement, you might consider simplifying your organisations core message.

The root cause of a lack of effectiveness often comes from the lack of synchronisation of Vision, Strategy and Implementation Plan.

The strategy describes how your organisation plans to win. It describes your playbook by providing a framework of choices that determine the nature and direction of the organisation. The strategy gives your people, supporters and alliance partners the trust that the organisation has the right approach, specified its goals and will achieve them in an effective and efficient manner.  

It is your navigation system, showing the destination which should be achieved with the strategic time frame. That is exactly the reason why a common understanding of a clear strategy is essential for self organised teams. If your navigation system provides each team with slightly different coordinates of the destination, your self organised teams will move into different (sometimes opposite) directions. Conflicting interpretations of the organisations goals (and what they really mean) are much more common in the sector than they should be. 

The top three root causes for this symptom include:


 

1.  The time bomb effect: Diplomacy in international CSO Federations 

Fluffy descriptions of a common ground regarding the direction of CSO federations, trying to avoid scaring away members who’s view differs from the main stream. Buy-in at governance level will automatically lead to different interpretations of management in the federal members. These different interpretations make collaboration across members boundaries very difficult and sharing of common resources very hard. A short term solution to a long term problem, which gives the impression of time for a while but is ultimately destructive – like a time bomb.


2.  Cash before Impact: Wrong objectives set wrong incentives

More than other sectors, organisations that engage in the civil society sector tend to measure their success by the income they generate, rather than the social impact they produce. Many CEOs admit that their primary measurement of success is “how much funding have we generated this year”. High income is seen as equal to high relevance of the organisation. Boards sometimes don’t necessarily fully consider the kind of behaviour KPIs can trigger within an organisation. KPIs which are not in sync with the strategy lead to conflicting priorities across the organisation and -in consequence- to teams drifting in different directions.

 

3.  Babylon Effect: Miscommunication through jargon

Working with numerous organisations of different shapes and forms such as international and local CSOs, foundations and social entrepreneurs, we get to compare a lot of strategies and vision statements. Unfortunately many of them are so mainstreamed and full of buzzwords that they seem interchangeable. Replace logo and the organisations name and you have a new strategy. Maybe the guidance of traditional consultants and experts contributes to this problem. Be aware that staff and local partners are usually very sensitive to jargon and buzz words. Even if the words mean something specific for the respective expert, ask: how can this message be communicated in simple, clean and relevant words. When executives and senior managers communicate from inside a bubble, stringing together over-used buzzwords and reading from overloaded PowerPoint presentations, their teams don’t have a common understanding on the direction the organisation wants to go.

Jumping to the implementation of agile operations without getting these requirements right is like taking seat in a Formula 1 car for driving to school. Let’s first get the big picture right and then set the environment for high speed and top performing teams.

Having a powerful and inspirational Vision Statement as well as a clear and specific Strategy provides the big picture that is required for teams to have clear roles and responsibilities, to use common sense, to consult and align with other parts of the organisation and to develop decision making capabilities that enable the organisation to adapt quickly and effectively in a fast changing environment.

That will be the subject of the second part of this mini series with the title “The groundwork: Focus, roles and responsibilities”.

Markus-Hesse-Author-Image
Markus Hesse

Markus is the co-founder and managing partner of Direct Impact Group, ltd. He combines experience as consultant and coach of international projects in a variety of industries for Fortune 500 and mid-sized companies with experience in executive management of international organisations. His core competencies are agile strategies and transformative change programmes. Markus Hesse’s educational background includes an M.A. in Business Coaching and Change Management. He is author for the EURO-FH university in Hamburg on change management and accredited member of the Europan Association of Supervision and Coaching.