How to Effectively Decentralize Decision Making
Effective decentralized decision-making
Decisions in complex work
In complex effort, decisions are everything. When developing a software solution, a lot of decisions have to be made: which customer persona do we primarily serve, what business benefit are we going to pursue, what capabilities will our product entail, what architecture will it have, what implementation strategy will we choose, how to break this feature into smaller work items, how to implement a particular algorithm, where to look to resolve a defect, how to speed up this search query and so on and so forth. The outcome hinges on effectiveness of decisions like these. And effective decisions are the ones that suggest a viable course of action and are timely. And of course, different decisions have different impact, so, that dictates the level of attention to the issue.
So, how to make effective decisions?
Who makes decisions?
There is one important factor that significantly influences decision effectiveness and that is: Who makes the decision. See, decision power often rests with those that have authority. And it’s not uncommon that decisions are predominantly made by people in various leadership positions. But here’s the challenge. If most of decisions are made by a leader, then this creates a bottleneck and ultimately the team performance will decrease. Moreover, in complex effort, decisions often require deep immersion in the context of work and that mostly rests with the team members. A software developer who deals with the codebase on a daily basis often knows much better (when it comes to technical decisions, for example), simply because they are directly exposed to the subject matter.
So, decisions that involve deep work context, often benefit from decentralization, which is giving the decision power to those who are closer to decision context. This normally improves decision quality and speed.
This does not imply, however, that we are now replacing one extreme with another: from nearly all decisions being centralized to decentralizing it all. That would be a false objective. Instead, an organization should seek an optimum balance of centralized vs. decentralized decisions. And if a decision has very significant impact, or is not particularly urgent in terms of timing, or does not require deep immersion into the work context, then it’s naturally best done in a centralized manner. But decisions that need fast response or hinge on nuanced understanding of the work context, are most effective when decentralized. So, a decision on what customer persona are we primarily serving, is very likely to be a centralized decision, because of its huge impact. At the same time, deciding on how to best implement customer order search, could be made more effectively if decentralized.
The complicated nature of real-life decisions
Additionally, a decision doesn’t always have to be treated as all-or-nothing and therefore be either centralized or decentralized. The reality is often more complicated than that. Usually a decision has certain constituent parts, some of which may need to be centralized and others made in a decentralized manner. So, for instance, deciding on solution architecture may involve some crucial high-level aspects that warrant centralized approach and, at the same time, contain lower, component-level considerations that are naturally done in a decentralized manner. Moreover, effective centralized decisions are often preceded by tight interaction with those who possess local context.
It is time to think of action items. Take a brief inventory of decisions in your context and ask yourself, are they optimally split in terms of centralized or decentralized decision-making.
Donald Reinertsen, The Principles of Product Development Flow: Second Generation Lean Product Development, Celeritas Publishing; 1st edition (January 1, 2009).
Scaled Agile Framework®, Principle #9 – Decentralize decision-making, https://www.scaledagileframework.com/decentralize-decision-making/
Alex Yakyma, Pursuing Enterprise Outcomes: Maximizing Business Value and Improving Strategy for Organizations and Teams (Aug, 2020)