Three keys to faster, better decisions
May 13, 2019
Decision makers fed up with slow or subpar results take heart. Three practices can help improve decision making and convince skeptical business leaders that there is life after death by committee.
Two years ago, we wrote about how it was simultaneously the best and worst of times for decision makers in senior management. Best because of more data, better analytics, and clearer understanding of how to mitigate the cognitive biases that often undermine corporate decision processes. Worst because organizational dynamics and digital decision-making dysfunctions were causing growing levels of frustration among senior leaders we knew.
Since then, we’ve conducted research to more clearly understand this balance, and the results have been disquieting. A survey we conducted recently with more than 1,200 managers across a range of global companies gave strong signs of growing levels of frustration with broken decision-making processes, with the slow pace of decision-making deliberations, and with the uneven quality of decision-making outcomes. Fewer than half of the survey respondents say that decisions are timely, and 61 percent say that at least half the time spent making them is ineffective. The opportunity costs of this are staggering: about 530,000 days of managers’ time potentially squandered each year for a typical Fortune 500 company, equivalent to some $250 million in wages annually.1
Managers at a typical Fortune 500 company may waste more than 500,000 days a year on ineffective decision making.
The reasons for the dissatisfaction are manifold: decision makers complain about everything from lack of real debate, convoluted processes, and an overreliance on consensus and death by committee, to unclear organizational roles, information overload (and the resulting inability to separate signal from noise), and company cultures that lack empowerment. One healthcare executive told us he sat through the same 90-minute proposal three times on separate committees because no one knew who was authorized to approve the decision. A pharma company hesitated so long over whether to pounce on an acquisition target that it lost the deal to a competitor. And a chemicals company CEO we know found himself devoting precious time to making hiring decisions four levels down the organization.
> Read the full article on the McKinsey website
By Aaron De Smet, Gregor Jost, and Leigh Weiss