& Decision Making
Many organizations are organized by an annual planning and budgeting cycle. They set financial targets for the year, set strategy for the year, and launch projects for the year. This assumes that, through detailed upfront analyses, we can predict the future accurately enough to choose a clear strategic direction a year or more in advance. Unsurprisingly, in many of these organizations, delivery also happens yearly. It is common to see large organizations with 200+ day cycle-times for the delivery of larger programs and strategic initiatives.
As organizations move toward Agile, many accompany a new way of working with modern and trendy management structures, such as the adoption of Holacracy or enterprise-wide self-management. Just because organizations need to be adaptable does not mean they cannot have a long term strategy or business plan.
In fact, the most Agile enterprises are grounded in a shared purpose, driven by a leader with a razor-sharp vision and an unwavering set of principles. Rather than just go with the flow, Agile organizations make decisions based on data, and build dynamic strategy through continuous measurement, learning and responding.
Moving to shorter strategic cycles is one of the most powerful things that leaders can do to make their organizations become more Agile. Agile businesses might set quarterly goals, and have small quarterly strategies that make incremental progress towards those annual goals. Delivery groups then create smaller, shorter efforts that show measurable progress towards the strategy.
Each quarter, the leadership team assesses which targets are being met and which ones are not. By this time, competitors may launch new capabilities, customers may demand new services, our own financial position may have shifted, and we can adjust the next quarter’s strategy based upon the new information. No longer are we locked into year-long gambles, year-long spending, and a year-long waits for results.
Decision Making Velocity
Agile businesses require a more dynamic, and decentralized decision making process. One that works fast and efficiently, and can create good and credible decisions sometimes based upon incomplete data. Additionally, leaders need to build their team members’ capability to make decisions on their own, without the leader herself being a bottleneck.
In Principles: Work and Life, founder of the mammoth hedge fund Bridgewater Associates Ray Dalio shares guiding principles that have been the cornerstone of the growth of himself and his company. In his straightforward list of rules, readers find a rock-solid path to rapid, decentralized decision making.
According to Dalio, to make decisions effectively one must learn, simplify and decide well. A “radically open-minded” leader weighs choices based on advice from people with “believability,” and decision making becomes a process guided by principles. To Dalio, believable people have repeatedly and successfully accomplished the thing in question — who have a strong track record with at least three successes — and have great explanations of their approach when probed.
The leader’s job then is to develop decision making capability, ensure that decisions are made through open and transparent critical thinking and discussion. Also that the decisions made by people with proven decision making capabilities are weighted more than decisions made by people without experience of a track record or believable opinions.
LitheSpeed Article: Agile Organizations
LitheSpeed Article: Transformation Roadmaps
Book: Ray Dalio, Principles: Life and Work