top of page

How does decision making mechanism impact business agility?

You've probably heard of business agility. However, many wonders what it is and with what it is eaten. What processes or events can positively or negatively affect how flexible a business can be? This time I'm not going to talk about what kind of environment a business operates in, which has a lot of significance, but this time would like to focus, on how different governance models can influence how flexibly an organization can respond to changes or the need for change.

What is business agility?

Business agility is about how the company is able to respond to the changing internal and external environment. It's about whether an organization has processes and tools in place to ensure flexibility that helps, not stops the organization from moving forward.

What can prevent business from being flexible?

One of the processes that can stop an organization from responding to a changing environment is how decisions are made. How many steps everybody needs to make to get the decision done. How many different signoffs you need to collect to move the decision forward.

How to ensure that the decision-making mechanism is not a showstopper for the organization being agile?

  • one of the most important elements is the clear establishment of the boundaries of the decision-making of each person. This element is one of the most common distractions, for these reasons it is very common for people to be afraid and distrustful of themselves that they can make a decision and they turn to higher managers, whom it sometimes takes time to catch. Mandate description seems very easy to implement, but in no organization I have seen clearly described powers, for this reason decisions always take longer than necessary.

  • another important aspect is how many different forums each change needs to go through. And whether the decision-making mandates are clearly defined and segregated, between different decision-making groups. Here it is very important to ensure that different decision-making forums are not created in order to ask the same questions, but rather to represent a specific area: risks for understanding and acceptance of risks arising from the decision, finance for financing, etc.

  • cadence when decision-making forums meet must be very clear and the calendar accessible to any employee. It is important to self-assess every year whether the previous frequency of decision-making forums is sufficient, or whether you should gather more often only for shorter meetings or for rarer but longer meetings.

  • finally, one of the most important parts is the possibility of making a mistake. This part responds to the first point - are people, although allowed to make a decision, not afraid to make it, because they can be severely punished?


bottom of page