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The 5 steps
Score your organization
Focus on key decisions
Make decisions work
Build an organization
Embed decision capabilities
Score your organization
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STEP 1: Score your organization

How good is your organization at making and executing decisions? What are the strengths you can build on to improve your effectiveness? Where are the hang-ups that prevent you from doing better?

Step 1 in our five-step process will help you answer these questions. It's a rigorous, fact-based technique for benchmarking both decision abilities and the organizational elements that either help or get in the way.

Rating decision abilities. Let's look at decisions first. One thing that sets great companies apart is the ability to make high-quality decisions. But it isn't just decision quality—the top performers also make those decisions quickly and execute them effectively. And they don't spend too much or too little effort in the process.

So it's important to assess your performance on all these factors—decision quality, speed, yield (or execution), and effort. A good way to begin is to survey a cross-section of people throughout the organization. You can then add rigor with face-to-face interviews and focused data gathering, using the decision X-ray described in Step 2. The goal is to answer some key questions: What percentage of the time does the organization make the right decisions? Are decisions made faster or slower than competitors? Is there too much (or too little) effort involved?

What you find may surprise you. Hospira, a $3.6 billion specialty medical device and pharmaceutical company, learned that its decision abilities were only in the 40th percentile overall, compared to the hundreds of companies in our database. That was far from the top-quartile performance that CEO Chris Begley was seeking.

Identifying the obstacles. So Begley and his team took the next step: pinpointing the organizational trouble spots. Here, too, you can use surveys and interviews, this time focused on the elements that can help or hinder good decision making and execution. Sample questions might include:

  • Are individuals clear on the roles they should play in critical decisions?
  • Do people with decision authority have the skills and experience they need?
  • Do our goals and incentives encourage good, fast decision making and execution?

Hospira's research turned up important strengths, such as strong leadership and a healthy pipeline of management talent. But executives and employees alike felt that some decisions weren't made at the right level of the organization. They believed that meetings didn't always work well, and that the company's culture didn't encourage people to make decisions with the customer in mind.

Insights like these allow you to understand not just where your decision abilities are weak but why, and then create an effective plan of attack. At Hospira, the research conclusions helped managers redesign a wide variety of key decisions. The company also began a series of organizational initiatives, such as training workshops, to support good decision making and execution. Better decision abilities contributed to the company's improved financial performance in recent years. Total shareholder return was in the upper quartile—right where Begley believed it should be.

Take a quiz now that provides a quick snapshot of both decision effectiveness and organizational performance.

Go to Step 2, Focus on key decisions.