Cruise ships take longer to turn than small yachts. Similarly, large corporations have always taken longer to make decisions than smaller, nimbler companies.
Corporate checks and balances, fail-safe policies, and organizational hierarchies all ensure that no decision is made until it is scrutinized and vetted. Responsible executives mull things over, weigh options, wait for all of the information to come in and contemplate outcomes. "We did not grow into a multi-national corporation, only to be undermined by an ill-conceived idea," is the conventional wisdom.
But conventional wisdom has been turned on its head during the past two decades. Speed has become the hallmark of leadership in virtually every sector, according to Fast Company. Companies known for their decision-making velocity, like Samsung, Amazon and Starbucks dominate their respective industries. They understand how much time and effort each decision is worth and generally believe that when a decision is made is more important than what decision is made. They make money faster because they have faster product development times, sales cycles, order fulfillment and capital spending activities.
Yet many of the corporate laggards have been just as slow to note this trend as they have been to make internal decisions. Consider the statistics:
- One third of all products are delivered late or incomplete due to an inability or delay in decision-making (Forrester Consulting).
- Speed of decision-making is the primary obstacle impacting internal communication (Gartner Group).
- For every hour a product team spends on heads-down work, they spend 48 minutes waiting on decisions. (By cutting wait times in half, companies can gain more than $370,000 annually in productive time across a 25-person team.)
Fortunately, there are proven ways to turn these corporate cruise ships around in tighter time frames. Online MBA programs like the one offered by Boise State University provide case study and scenario-based training to provide graduates with the leadership tools to do so. Here are two methods to drive faster decision-making:
Force it! Google co-founder (and CEO of Google's current parent company, Alphabet, Inc.) Larry Page pushed teams in the 1990s and early 2000s to make decisions faster and beyond their comfort levels. He galvanized support around the idea that faster decisions are generally better, and he quelled the fear of making mistakes.
Use collaborative technologies. Elon Musk's SpaceX needed to make faster decisions for NASA. According to Harvard Business Review, "Initially, NASA sent a fax whenever they had a query, which SpaceX added to a list of outstanding questions. The company then assembled a weekly 50-person meeting to review product status information contained in spreadsheets, addressing each question individually before sending the responses back to NASA."
SpaceX sped up the process and now uses collaborative tools that enable NASA to have direct visibility into each project and a connection with each engineer working on each component. Technology put every decision-maker virtually in the same room at the same time. This reduced wait times for defining product requirements by 50 percent and completely eliminated the 50-person, four-hour review meetings.
Studying fast companies in an MBA program reveals the new mindset that underlies expedited decisions. The prevailing belief among industry leaders is that indecision kills because it leaves time for new variables to enter the equation. Fast companies avoid that possibility as much as possible by limiting options, listening to gut instincts, thinking of time as money, and building decisiveness with each fast decision.
Learn more about the Boise State online MBA program.
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