Some time ago, I accompanied the leadership team of a Swiss industrial company during its quarterly meeting. In the afternoon, a lively discussion ensued about an Issue. Initially, all five team members participated in the debate, but as minutes passed, interest waned, and eventually, only two people were actively exchanging points. I interrupted with the question: “Who has the E?” Ten eyes looked at me questioningly. “Which E…?”
Swift implementation is required
Every success (and failure), every opportunity seized (or missed) results from decisions made (or not made).
To outperform the competition, a company must be more efficient in implementation than its rivals. Rarely do unique selling points allow a company to rest on its laurels. The vast majority of companies must instead prevail through better implementation. And to be faster and more effective, efficient decision-making is required. Hence, E stands for decision. However, in many companies, there is no clarity on who decides and how decisions are made. Too often, issues are escalated to the top, becoming bottlenecks. And not always are the best decisions made with long decision-making paths.
You can conduct the following test with your team: Write down a series of questions, such as: Who decides in the company…
…on the pricing of products?
…whether to hire someone in area X?
…on process xyz?
…what color the website should be?
…whether a new location should be opened?
etc…
Ask these questions to different people in the company. Most likely, you will get vague or different answers, or the boss is mentioned too often. It shouldn't be like this.
To clarify who has the E, I recommend three steps:
1 – Organizational Chart of Responsibilities
To know who decides, it must be clear, in black and white, who has which responsibilities in the company. To prevent endless discussions, as in the example above, first have a fundamental debate about who is responsible for what, i.e., who has the E. The most effective way to clarify this is by creating the company's organizational chart of responsibilities. Here's the essence:
Start with the leadership team. Sit down with your three to seven key people and define the ideal structure. Structure first, then people:
Don’t just document the current status quo, but look 6 to 12 months ahead. What functions need to be present in the leadership team? Typically, these are three to seven functions (sales, marketing, operations, finance, HR, IT, etc.). Keep it simple, less is more!
- For each of these functions, note down four to six responsibilities (e.g., team leadership, pricing, branding, hiring, new customer acquisition, customer satisfaction, etc.). Certainly, you will encounter points of ambiguity or differing opinions in the team. Deciding on these points prevents endless debates in the future when no one knows who can and must make a decision.
- Once all functions and responsibilities in the leadership team are determined (the structure), decide which people will fill these functions. It's important that it happens in this order, structure first, then people. A person can sit on two functions, but never two people on the same function. Use the GWC tool to identify potential weaknesses.
- Define the structure for the entire company, not just the leadership team, using the exact same approach. Ideally, everyone does this independently for their area, in consultation with the rest of the team.
In the end, a tool is created that shows all key functions and responsibilities in the company, indicating who is in charge. Difficult? Yes. The alternative: no organizational chart of responsibilities, thereby shirking the task of structuring the company for optimal decision-making processes. Avoiding this discussion and not defining the organizational chart of responsibilities allows the war of decisions between people and departments to continue day in, day out with numerous resolutions. It's worth investing a few hours to assign the E to a specific position in the company.
2 – Clear Vision
To make correct short- and medium-term decisions, it is imperative to know where the company should go in the long term. To have a clear vision, you can answer the 8 questions on the VTO together with your leadership team.
If you're driving on vacation with several people and it's unclear whether you're heading to Italy or France, there will be a debate at every crossroad about whether to turn right or left. The same happens in the company, albeit often less obviously. The hidden costs of this ambiguity are enormous for the company.
3 – RAPID: Who is involved?
Strategic decisions are often complex and involve many people in the company. In these cases, it's not only important who decides but also how decisions are made. Further reading on this can be found in Part 1 and Part 2 of the corresponding articles.
Here, I'd like to introduce the RAPID process, published by Paul Rogers and Marcia Blenko in the HBR (Hararvard Business Review):
With RAPID, one creates an overview of key individuals for an important decision, assigning decisive roles to each letter of the acronym. This ensures that important decisions have the necessary commitment.
I hope these three aspects help to make decisions in the company more efficiently and to see the competition only in the rearview mirror.
These tools and techniques are part of EOS, the Entrepreneurial Operating System, which has been implemented in over 12,000 SMEs worldwide. It is typically used by companies with between 10 and 250 employees, growth-oriented, respectful in interaction, and ready to show themselves open and honest as a team.
The article was written by Jörg Lahmann, the world's first EOS Implementer for the German-speaking area. For more info:
