Decision Making in an Agile Organization – Case of Atlas Cloud
AtlasCloud* is a new age IT company with 125 employees in 3 cities. It has clocked a revenue of Rs. 30Cr (USD 4mn) last year and expects to grow by 25% in the next 2 years. Starting with a team of 10, the current strength was achieved as demand for its services increased from customers in US and Europe. AtlasCloud is looking at acquiring more customers from other regions but has been struggling to do so. The hurdle was effective decision making.
Decision Making is a major factor of the DNA of an organization
The DNA of any organization is affected by its decision making process and the style of decision making it adopts (by design or by its experience). How the decisions are made in an organization and who decides what - have a major impact on how and when the organization responds to challenges and changes. These vary from company to company and these variations lay the foundation for how an agile organization is different. Some follow “Linear decision making” while others follow “Non-Linear decision making” frameworks. The decision frameworks are strongly intertwined with organization structure.
We can broadly classify the decision making process in an organization as Linear or Non-Linear. The main impact of the decision process is seen is on the organization structure. Two major factors that influence the decision making in an organization are the environment (competition and regulations) in which it is operating and the culture of the organization. Technology is an enabler and makes the process more efficient but has limited impact on who decides on what issues and when. One can argue that with technology decisions may get more centralized as information travels faster.
Current market environment requires organizations to be more agile. While most organizations understand this very well, it’s the decision making framework and the degree of adoption that differentiates one from the other. Agility influences customer experience (CX) and Employee experience (EX). And in turn CX and EX have a great influence on the business results. So the question that needs to be addressed by organizations is “What is the level of agility appropriate for us and how do we embed it in the DNA of our organization?”
For many, agility symbolizes speed. But Agility is not just the speed of response by an organization. It also encompasses quality of decisions and their effective execution. While speed is critical, it should not sacrifice the effectiveness of decision and the quality of execution.
In order to become more agile it would be natural for organizations to look at technology for increasing the speed of decision making. Rapid movement of information to and from the decisions makers to others is understood to be the criteria on which an organization is classified as agile or not. As stated before, this is only partially correct. While change in IT infrastructure can increase the speed of decision making, it does not result in quantum improvements in the effectiveness of the decisions and the quality of their implementation. Consequently, there is less than quantum improvement in CX and EX.
But this can be changed significantly by changing the decision making framework along with an organization structure that drives agility.
Decision making and structure
Implementing a decision framework requires a supporting organization structure. Often there is a conflict between the two which undermines the efficacy of both the decision framework and structure.
Structure is often seen as establishing reporting relationships, roles and levels. This assumes that work has to be grouped logically and in hierarchical manner. Rather, if structure is viewed as a grouping of work/outputs to be achieved, a rather new and agile structure can be contemplated.
AtlasCloud took an outside-in approach and defined a customer size based frontend of sales and marketing. The middle was the functional operating models that aligned processes to meet the different size customer needs. And the back end structure was defined by large processes that catered to the sales and functional operating models. Decision making was delegated to the lowest level possible nodal manager. Every role was expected to make certain decisions. Apart from the minimum decisions for sustenance every role had a role specific decisions. Both the sustenance and role specific decisions were covered in the decision making framework.
Agile Decision Framework
AtlasCloud had no written document on its decision framework. Most of the decisions were defined in the role description document and they were too vague. This resulted in slow and often ineffective responses by AtlasCloud. To change the situation, it created a decision framework across roles which included the collaborative decisions as well.
Often agility can be substantially improved with a written decision making framework. The framework should include collaborative decision making and governance mechanism. These are generally undefined and therefore become person specific in the organization.
A decision framework should have a purpose, processes, roles, outputs and governance.
Refine the structure to support the Agile Decision Framework
AtlasCloud used the decision making matrix but had to refine the structure to gain its full benefit. It added the function specific decisions to the role descriptions. A few roles had to be redefined and upgraded to ensure consistency in decision making. The role of Sales managers and Talent Managers were enhanced by including additional decision points such as rewarding employees, changing the customer status etc.
Often a new decision framework requires adjustment to the structure to ensure effectiveness of the framework as well as the structure.