Decision-making can have a crippling effect. Consumers who demand an increasing level of choice sit stonewalled choosing which color of the iPhone XR to order, or even what clothes to wear. That’s famously why we hear stories of leaders wearing the same outfit every day to save them the brain power wasted on making meaningless choices.
The same holds true in supply chains. Executives find themselves as the bottleneck because decisions that should have been made at lower levels aren’t, and are then escalated up the chain. Finally, the issue lands on the “decision-maker’s” desk and is greeted with the question of “why didn’t someone do something about this sooner?” In response, the concept of democratized decision-making, or more simply, pushing decision-making back down the hierarchy, is born.
Breaking this behavior represents major cultural change, but almost half of supply chains already say that they are empowering employees to make strategic decisions, and another quarter have taken that to the level of encouraging experimental decision-making among employees. This high-level view suggests that the vast majority of supply chain practitioners are given free rein to make decisions, yet escalations and bottlenecks remain prevalent.
From the executive level this is perplexing. Outwardly, the organization is empowering employees, so why aren’t they acting on it? When the same question is considered by level of organizational hierarchy, it becomes apparent that the encouragement does not run all that deep. In fact, it only goes down one level from the top.
Executives and senior management are more than twice as likely to be encouraged to make innovative decisions as those in middle or front-line management, and individual contributors. Further, as the level of seniority decreases, the impact structure on the decision-making process increases. Over half of the community feels that at the lowest levels of the organization, decision-making is so heavily structured that it becomes bureaucratic and time consuming, or worse, there is no guidance at all. The implications on the supply chain team of tomorrow are considerable.
Take, for example, the high-potential university graduates selected for entry-level roles. They enter the organization with youthful enthusiasm, which is compounded by inspiring presentations from senior leaders. However, despite being sold on being the front-line problem solvers, this young talent is told that they can make decisions, but only within certain parameters. Some may manage their frustrations with the hope that once they become a manager they will be entrusted with more decision-making. Even then, experience is likely to shape how they manage their own teams and the cycle of limited decision-making will continue.
For others, the frustration will mount and they will look elsewhere. This can be easily attributed to normal attrition, or worse, that some individuals aren’t cut out for work in a particular company. Both wrongly justify the status quo, and again, the cycle of limited decision-making will continue.
As bleak as that sounds, those types of scenarios are all too real. The positive side is that executive and senior management can leverage encouragement and empowerment to enact change.
In particular, supply chain leaders can:
- Walk the talk all the way down the line. Giving a great talk isn’t enough to ensure that messaging turns to actions at all levels. Engage with leaders multiple levels below yours to compare what you said with what really happens.
- Initiate decision-making experiments from the ground up. Use innovative techniques like gamification, hack-a-thons, and simulations to rethink how decisions are made at all levels. Then keep doing it because changing business needs require evolved decision-making.
- Get out of your own way. If you become the bottleneck in the decision-making process then you may be (part of) the problem. Be humble and introspective. In realizing your own frustrations you can empathize with how your organization may feel and use that as the catalyst to initiate change.