Get Out of Your Own Way
By Steve Klinkerman
Strategies and technologies can be duplicated, making the quality of organizational decisions a key competitive factor.
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Can companies truly differentiate themselves through distinctive strategies and technological mastery? A lot of effort is based on that premise. But insight and expertise aren't sufficient in a national market populated by more than 10,000 financial services providers. Companies scoring singular successes don't get far before being copied — competitors will rip off your strategy, recreate your technology and even hire away your brain trust.
What ultimately distinguishes market leaders, then, is the quality of the nervous system and the connective tissue. The banking industry, for example, is steadily moving in the direction of employing fewer people who are more highly trained and who use technology to handle higher workloads. Each person is making more decisions, and each decision has more impact.
Throw in an intensely competitive market and a feverish pace of technological change, and you have a situation where the entire organization must demonstrate cohesion, not just an elite group of executives. Unless people come together, there is no way that the corporation is going to deliver integrated customer service, cope with a rapid development cycle for products and services, manage the complexities of e-commerce and capitalize on information technology.
This reality forces managers and workers to confront their own interpersonal effectiveness. There's no hiding behind skills or rank. To the degree that people can't collaborate to make timely, high-quality decisions on crucial matters affecting the customer and the organization, their individual contributions are diminished, and their projects are compromised.
Driving home the point, one-fourth of the managers and workers responding to a survey by management consulting firm Kepner-Tregoe Inc., Princeton, N.J., said decision delays by senior management "often" cause their organizations to forfeit opportunities; another 50% said that "sometimes" is the case. More than 60% said their business units sometimes miss opportunities because of delays in making and implementing decisions; another 10% said that often is the case.
In explaining these delays, the 818 respondents cited factors such as the need to obtain multiple approvals, organizational politics, changing priorities, lack of consensus on decision purposes, divergent approaches, fear of mistakes and coordinative difficulties (see chart). There was little difference in responses between the 479 managers and 339 workers participating in the survey, which included a variety of industries.
The respondents said that when they were hurried, they did a poor job of sharing information (46%), failed to involve the right people (38%), failed to achieve consensus on what was to be accomplished (27%), failed to obtain enough information (22%), did not gain sufficient commitment prior to implementation (21%), and did not consider enough options before deciding (17%).
What to do? One response is to elevate awareness of the issues surrounding organizational decisions, for example through third-party evaluations and survey feedback from employees and customers. Another is to clear political and structural roadblocks. Yet another is to provide training and tools so that people can take tangible steps to improve individual and collective decision-making.
Ultimately, people will have to change their attitudes to improve the speed and quality of organizational decisions. That makes the issue all the more slippery to deal with. But there's little choice. After all, decisions form the intellectual transmission of the organization. If the gears don't mesh, the vehicle's not going anywhere.
Mr. Klinkerman is editor-in-chief of Banking Strategies.