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great decision making</div></h1><div data-component="mdc-c-description" class="mdc-c-description___SrnQP_8032924 mdc-u-ts-7 mck-u-links-inline"><div>For agile organizations, getting decision making right is critical since their foundation rests on an action-oriented decision architecture.</div></div></div><div data-component="mdc-c-link-container" class="mdc-c-link-container___xefGu_8032924 mdc-c-link-container--align-left mdc-c-link-container--display-column___X0HDD_8032924 mdc-u-grid-gutter-md"><a data-component="mdc-c-link" href="#" class="mdc-c-link-icon___SEKyg_8032924" role="button" aria-label="Share on linkedin" data-layer-event-prefix="CTA Link" data-layer-action="click" data-layer-category="share" data-layer-subcategory="social" data-layer-subcategory2="linkedin" data-layer-text="Share on LinkedIn"><span data-component="mdc-c-icon" class="mdc-c-icon___oi7ef_8032924 mdc-c-icon--radial___y3csX_8032924 mdc-c-icon--size-xl___3BEee_8032924 mck-linkedin-thin-icon"></span></a><a 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class="mdc-c-description___SrnQP_8032924"><p>Delivers growth, innovation, and organizational agility and is an expert on culture change, leadership development, team effectiveness, capability building, and transformation</p></div></div></div><div class="mdc-u-grid-gutter-lg BlogAuthors_mck-c-blog-authors__author-bio__bygEJ"><div data-component="mdc-c-avatar" class="mdc-c-avatar-enhanced-author-1 mdc-c-avatar___kVSTP_8032924 mdc-c-avatar--image___levct_8032924 mdc-c-avatar--size-6"><style> .mdc-c-avatar-enhanced-author-1 { --mdc-avatar-size: 48px; } </style><a href="/capabilities/people-and-organizational-performance/our-insights/the-organization-blog#/author/gregor-jost"><img src="/~/media/mckinsey/our people/gregor jost/gregor-jost_headshot_988x741.jpg?cq=50&mw=128&car=1:1&cpy=Center" alt="Gregor Jost"/></a></div><div class="mdc-u-ts-10 BlogAuthors_mck-c-blog-authors__description__0BmaA"> <a data-component="mdc-c-link" href="/capabilities/people-and-organizational-performance/our-insights/the-organization-blog#/author/gregor-jost" class="mdc-c-link___lBbY1_8032924"><span class="mdc-c-link__label___Pfqtd_8032924">Gregor Jost</span></a><div data-component="mdc-c-description" class="mdc-c-description___SrnQP_8032924"><p>Brings passion and analytical rigor to transformational organization-redesign efforts, fostering stronger business performance, greater efficiency, and agile ways of working</p></div></div></div></div><div data-component="mdc-c-link-container" class="mdc-c-link-container___xefGu_8032924 mdc-c-link-container--display-column___X0HDD_8032924 BlogEntryContent_mck-c-blog-entry-content__tag-container__b0iuz mdc-u-grid-gutter-xxs"><div class="BlogEntryContent_mck-c-blog-entry-content__tag-link__fxyON"><a data-component="mdc-c-link" href="/capabilities/people-and-organizational-performance/our-insights/the-organization-blog#/tag/organization-design" class="mdc-c-link-icon___SEKyg_8032924"><span class="mdc-c-link__label___Pfqtd_8032924">Organization design</span></a></div></div></div><div class="mdc-o-content-body"><p><span class="BlogEntryContent_mck-c-blog-entry-content__display-date__vCR9M"><time dateTime="2018-04-19T00:00:00Z">April 19, 2018</time></span>You can tell an organization has problems making decisions when you hear these complaints: The organization is “too complex,” possesses a “meeting culture,” or has “too much consensus.” “Too complex” can simply be code for “it’s too hard to get things done.” And while people often finger too many “cooks” as the culprit, we’ve seen matrix structures where, despite many people being involved, roles are clear, how things work is straightforward, and decision-making is fast and effective.</p> <p>For agile organizations, <a href="/capabilities/people-and-organizational-performance/our-insights/decision-making-in-your-organization-cutting-through-the-clutter">getting decision-making right</a> is critical since their foundation rests on an <a href="/capabilities/people-and-organizational-performance/our-insights/the-five-trademarks-of-agile-organizations">action-oriented decision architecture</a>. The result: Organizations with high decision-making velocity and quality generate 2.5 times higher growth, 2 times higher profit and 30 percent higher return on invested capital, our research shows.</p> <p>Still, decision-making is hard. An unclear or poorly defined process can trigger decision “churn,” where previous judgments are revisited; a “fog of accountability,” where no one is truly answerable; “death by PowerPoint,” where decision-making gets lost from too much information sharing; and bureaucratic governance.</p> <p>We’ve identified three common myths that contribute to difficulties in decision-making:</p> <h3>Myth #1. You must choose between quality and speed.</h3> Good decisions are often made quickly. Usually, it reflects a decision-making system designed to maximize engagement of the right stakeholders but minimize the number of decision makers, accelerate the entire process through decision execution, provide ruthless role clarity, orchestrate key points of collaboration, and streamline governance to keep meetings and approvals to a minimum. <h3>Myth #2. Good decisions are easier using technology, big data, AI, etc.</h3> <p>While these can help, in many cases they don’t. In fact, more technology and more data can lead to information overload and analysis paralysis. Also, beware of big data and analytics creating a belief that decision-making can be entirely rational, thus taking emotion out of it. Emotion can be very helpful in determining what is good and desirable and what isn’t.</p> <h3>Myth #3. Applying best practices will improve decision-making.</h3> <p>In fact, most “best” practices are conditional. They are good in some situations and not others. Different types of decisions require varying approaches, and advice helpful for some decisions can be terrible for others.</p> <p>What’s the key to unlocking great decision-making? As we advise in “<a href="/capabilities/people-and-organizational-performance/our-insights/untangling-your-organizations-decision-making">Untangling your organization's decision making</a>,” any organization can improve the speed and quality of its decisions by paying more attention to what it’s deciding. We recommend segmenting decisions into four basic types and applying a different set of best practices for each:</p> <ol> <li><strong>Big bet:</strong> Infrequent high-stakes decisions that affect the organization broadly (e.g., mergers, acquisitions, big investments). In these instances, healthy debate among top team members is <em>more</em> important than data.</li> <li><strong>Cross-cutting:</strong> Frequent decisions that affect multiple areas in the organization (e.g., budget allocations across products/regions, sales and operations planning, new product development). Clarity of process is more important than who gets the decision right.</li> <li><strong>Ad hoc:</strong> Day-to-day decisions by individuals as part of their job (e.g., interactions with customers). An open and trusting culture with personal ownership and role and strategic clarity are more important than formal accountabilities.</li> <li><strong>Delegated decisions:</strong> Day-to-day operational decisions made by a team or individual closest to the information vital to making the decision (e.g., deciding on regional or site level promotions, adjustment to local manufacturing operations). Here, clarifying delegation of authority is only half the battle; leaders need to learn how to empower and let go.</li> </ol> <p>Recognizing these impediments to decision-making and targeting action against them helps improve the choices organizations make. In three forthcoming blogs, we will focus on different decision types and share tested approaches for ensuring the best results.</p></div></div><aside class="mdc-u-grid-col-lg-start-11 mdc-u-grid-col-lg-span-2 BlogEntryContent_mck-c-blog-entry-content__side-bar__YsMpJ"></aside></div></div></div><div data-component="mdc-c-module-wrapper" data-module-theme="light" data-module-background="lightest-grey" data-module-category="StandalonePromo" class="BlogPromo_mck-c-blog-promo__hSsYu BlogPromo_mck-c-blog-promo--full-width__pKXqL mck-u-animation-slide-up BlogEntryContent_mck-c-blog-entry-content__promobar___qKLu" data-layer-region="blog-one-click-module"><div data-component="mdc-c-content-block" class="mdc-c-content-block___7p6Lu_8032924 mdc-u-grid-gutter-lg"><div class="mck-o-container"><div data-component="mdc-c-content-block" class="mdc-c-content-block___7p6Lu_8032924 mdc-u-grid-gutter-lg mck-o-container--wrapped mck-o-container--mobile-spacing BlogPromo_mck-c-blog-promo__content__31yfC BlogPromo_mck-c-blog-promo__content--center__JdBp3"><div class="mdc-u-align-center"><h3 data-component="mdc-c-heading" class="mdc-c-heading___0fM1W_8032924 mdc-u-ts-3">Learn more about our People & Organizational Performance Practice</h3></div><div class="BlogPromo_mck-c-blog-promo__form-wrapper__bLL16 BlogPromo_mck-c-blog-promo__form-wrapper--width-auto__6v1YB"><div data-component="mdc-c-link-container" class="mdc-c-link-container___xefGu_8032924 mdc-c-link-container--align-Center"><a data-component="mdc-c-link" href="/capabilities/people-and-organizational-performance/how-we-help-clients" class="mdc-c-link-cta___NBQVi_8032924"><span class="mdc-c-link__label___Pfqtd_8032924">Learn more</span><span data-component="mdc-c-icon" class="mdc-c-icon___oi7ef_8032924 mck-link-arrow-right-icon"></span></a></div></div></div></div></div></div></div></div></div></main></div><script id="__NEXT_DATA__" type="application/json">{"props":{"pageProps":{"locale":"en","dictionary":{},"sitecoreContext":{"route":{"name":"Keys to unlocking great decision making","displayName":"Keys to unlocking great decision-making","fields":null,"databaseName":"web","deviceId":"fe5d7fdf-89c0-4d99-9aa3-b5fbd009c9f3","itemId":"1be12da5-d1ba-477a-91db-884e2e321181","itemLanguage":"en","itemVersion":2,"layoutId":"ae753eb4-a035-40b4-83bf-4b4438df6742","templateId":"d929136a-019a-4786-8072-3e3a60b2f31c","templateName":"Blog Entry","placeholders":{"jss-main":[{"uid":"e18e4703-f541-45d8-89c1-d5d8407f1708","componentName":"BlogEntry","dataSource":"","fields":{"data":{"blogEntry":{"title":{"jsonValue":{"value":"Keys to unlocking great decision making"}},"sEOTitle":{"value":""},"description":{"jsonValue":{"value":"For agile organizations, getting decision making right is critical since their foundation rests on an action-oriented decision architecture."}},"sEODescription":{"value":""},"displayDate":{"jsonValue":{"value":"2018-04-19T00:00:00Z"}},"body":{"value":"\u003cp\u003eYou can tell an organization has problems making decisions when you hear these complaints: The organization is \u0026ldquo;too complex,\u0026rdquo; possesses a \u0026ldquo;meeting culture,\u0026rdquo; or has \u0026ldquo;too much consensus.\u0026rdquo; \u0026ldquo;Too complex\u0026rdquo; can simply be code for \u0026ldquo;it\u0026rsquo;s too hard to get things done.\u0026rdquo; And while people often finger too many \u0026ldquo;cooks\u0026rdquo; as the culprit, we\u0026rsquo;ve seen matrix structures where, despite many people being involved, roles are clear, how things work is straightforward, and decision-making is fast and effective.\u003c/p\u003e\n\u003cp\u003eFor agile organizations, \u003ca href=\"/capabilities/people-and-organizational-performance/our-insights/decision-making-in-your-organization-cutting-through-the-clutter\"\u003egetting decision-making right\u003c/a\u003e is critical since their foundation rests on an \u003ca href=\"/capabilities/people-and-organizational-performance/our-insights/the-five-trademarks-of-agile-organizations\"\u003eaction-oriented decision architecture\u003c/a\u003e. The result: Organizations with high decision-making velocity and quality generate 2.5 times higher growth, 2 times higher profit and 30 percent higher return on invested capital, our research shows.\u003c/p\u003e\n\u003cp\u003eStill, decision-making is hard. An unclear or poorly defined process can trigger decision \u0026ldquo;churn,\u0026rdquo; where previous judgments are revisited; a \u0026ldquo;fog of accountability,\u0026rdquo; where no one is truly answerable; \u0026ldquo;death by PowerPoint,\u0026rdquo; where decision-making gets lost from too much information sharing; and bureaucratic governance.\u003c/p\u003e\n\u003cp\u003eWe\u0026rsquo;ve identified three common myths that contribute to difficulties in decision-making:\u003c/p\u003e\n\u003ch3\u003eMyth #1. You must choose between quality and speed.\u003c/h3\u003e\nGood decisions are often made quickly. Usually, it reflects a decision-making system designed to maximize engagement of the right stakeholders but minimize the number of decision makers, accelerate the entire process through decision execution, provide ruthless role clarity, orchestrate key points of collaboration, and streamline governance to keep meetings and approvals to a minimum.\n\u003ch3\u003eMyth #2. Good decisions are easier using technology, big data, AI, etc.\u003c/h3\u003e\n\u003cp\u003eWhile these can help, in many cases they don\u0026rsquo;t. In fact, more technology and more data can lead to information overload and analysis paralysis. Also, beware of big data and analytics creating a belief that decision-making can be entirely rational, thus taking emotion out of it. Emotion can be very helpful in determining what is good and desirable and what isn\u0026rsquo;t.\u003c/p\u003e\n\u003ch3\u003eMyth #3. Applying best practices will improve decision-making.\u003c/h3\u003e\n\u003cp\u003eIn fact, most \u0026ldquo;best\u0026rdquo; practices are conditional. They are good in some situations and not others. Different types of decisions require varying approaches, and advice helpful for some decisions can be terrible for others.\u003c/p\u003e\n\u003cp\u003eWhat\u0026rsquo;s the key to unlocking great decision-making? As we advise in \u0026ldquo;\u003ca href=\"/capabilities/people-and-organizational-performance/our-insights/untangling-your-organizations-decision-making\"\u003eUntangling your organization's decision making\u003c/a\u003e,\u0026rdquo; any organization can improve the speed and quality of its decisions by paying more attention to what it\u0026rsquo;s deciding. We recommend segmenting decisions into four basic types and applying a different set of best practices for each:\u003c/p\u003e\n\u003col\u003e\n \u003cli\u003e\u003cstrong\u003eBig bet:\u003c/strong\u003e Infrequent high-stakes decisions that affect the organization broadly (e.g., mergers, acquisitions, big investments). In these instances, healthy debate among top team members is \u003cem\u003emore\u003c/em\u003e important than data.\u003c/li\u003e\n \u003cli\u003e\u003cstrong\u003eCross-cutting:\u003c/strong\u003e Frequent decisions that affect multiple areas in the organization (e.g., budget allocations across products/regions, sales and operations planning, new product development). Clarity of process is more important than who gets the decision right.\u003c/li\u003e\n \u003cli\u003e\u003cstrong\u003eAd hoc:\u003c/strong\u003e Day-to-day decisions by individuals as part of their job (e.g., interactions with customers). An open and trusting culture with personal ownership and role and strategic clarity are more important than formal accountabilities.\u003c/li\u003e\n \u003cli\u003e\u003cstrong\u003eDelegated decisions:\u003c/strong\u003e Day-to-day operational decisions made by a team or individual closest to the information vital to making the decision (e.g., deciding on regional or site level promotions, adjustment to local manufacturing operations). Here, clarifying delegation of authority is only half the battle; leaders need to learn how to empower and let go.\u003c/li\u003e\n\u003c/ol\u003e\n\u003cp\u003eRecognizing these impediments to decision-making and targeting action against them helps improve the choices organizations make. In three forthcoming blogs, we will focus on different decision types and share tested approaches for ensuring the best results.\u003c/p\u003e"},"hidePromoBar":{"boolValue":false},"hideDek":{"boolValue":false},"mobileReady":{"boolValue":true},"selectedModalSubscriptions":{"targetItems":[]},"hideFromSearchEngines":{"boolValue":false},"parent":{"id":"7C7A7EA76B834C8C819FBF479C62AE76","name":"The Organization Blog","title":{"value":"People \u0026amp; Organization Blog"},"description":{"value":"Short and snackable insights on topics related to people, talent management, organizational performance, purpose, agility, culture, change management, people analytics, leadership, and merger management from our experienced leaders at the forefront of today\u0026rsquo;s trends."},"url":{"path":"/capabilities/people-and-organizational-performance/our-insights/the-organization-blog"},"heroImage":{"alt":"McKinsey Organization Blog","src":"/~/media/mckinsey/business functions/people and organizational 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