Quick decision-making is arguably the most important ability for a business today. Why is speed so vital? Because, in a fast-paced world, it’s the thing that lets you get ahead of your competitors.
Bain & Company carried out a 10-year research programme involving more than 1,000 companies, which shows a clear correlation between decision effectiveness and business performance.
It found that high performing companies were making decisions quicker, with less effort, and executing them more frequently than their worse-performing counterparts. On the other hand, the companies that deliberated over decisions for months saw growth stagnate, while their competitors overtook.
Quick decision-making saves time and money
Whether you think your business is good or bad at making decisions, the truth is most companies can improve the effectiveness of their decision-making.
In a survey of 1,260 people across a range of business sectors, McKinsey found that only 20% of respondents believed their organisations excelled at decision making. What’s more, a majority said much of the time they devote to decision-making is used ineffectively. This was consistent across both smaller, routine decisions and big important decisions.
Proving that slow decision-making is costing organisations both time and money, the respondents who believed their companies excelled at decision-making were twice as likely to report superior returns from their most recent decisions.
The researchers also made another interesting discovery: “Faster decisions tend to be higher quality, suggesting that speed does not undercut the merit of a given decision. Rather, good decision-making practices tend to yield decisions that are both high quality and fast.”
Devolved decision-making = engaged employees
Slow decision-making not only affects revenue but also employee engagement. The Institute for Employment Studies analysed data from more than 10,000 employees to understand the factors that most influence engagement.
They found that the strongest driver of all is a sense of feeling valued and involved, and central to this is having involvement in decision-making. Employees who are not empowered to make decisions for themselves and have to wait on leadership for direction become quickly disengaged.
They become less committed to the business and their performance drops. They might even start looking around for new opportunities. If, however, decision-making is devolved and employees can play an active role, they can help drive the company forward. This helps to fuel their passion for both their work and their employer.
Quick decision-making relies on trust
Delegating decisions and empowering employees to get things done means problems get solved quicker, and opportunities get seized rather than being wasted due to indecision. It also frees up senior leaders to focus on the big questions, while those closer to the front line can make the best decisions for their departments.
Writing for Forbes, Cloverpop CEO Erik Larson says trust is something the best-performing companies demonstrate: “Successful businesses lean into the need for trust by focusing on delegation, transparency and accountability.”
Through delegation, transparency and accountability, these organisations build a ‘triangle of trust’ and this gives them faster, better decision practices. “They engage their employees, they innovate and adapt and they execute quickly and efficiently,” says Larson.
De-risking quick decision-making
While fast decision-making is desirable for businesses, rash decision-making is not. So how do you speed things up without making mistakes? Experience and expertise help but even experienced people can make the wrong choice.
Psychologist Daniel Kahneman, who won his Nobel Prize for research on the cognitive biases that affect human choices, notes: “Intuition feels just the same when it’s wrong and when it’s right, that’s the problem.”
But decisions don’t have to be made on intuition alone; by using data you can dramatically increase confidence in your decisions. Data-backed decisions are easier for everyone to buy into because data removes biases and subjectivity. The numbers show you the way forward.
Of course, data can take time to compile, but there are sources of data that are quick and reliable. With Attest, you can instantly reach out to thousands of consumers to gain the insight you need to make fast, fact-based decisions.
Here are a few examples of how Attest clients have used the platform recently to inform their decision-making:
- A supermarket wanted to test what consumers thought of its proposed new cafe menu and found very strong levels of satisfaction.
- A flower delivery service planned to launch in France and Germany but realised it would first have to change a core part of its proposition.
- A fitness brand wondered if it needed to pivot during COVID-19 and discovered that people wanted online resources.
- An insurance company considered changing its name but research in five markets showed the new name was an unpopular choice.
Speed up your decisions, overtake your competition
A key reason that companies get left behind is because of their slow decisions. It disrupts go-to-market plans and prevents the timely implementation of new ideas. There are tons of examples that show what happens to organisations when they delay delivery.
Just look at Blockbuster Video; its failure to embrace the internet left it unable to compete with online streaming services. Then there’s BlackBerry, which took a beating because it underestimated Apple and didn’t adapt to the market.
To be a winner, you have to stay one step ahead of the competition. And to do that, your business needs to be agile – built like a speedboat, not a giant ship that takes forever to change direction.
Central to this is blowing out bureaucratic structures. This can be done by delegating decision-making and giving people access to the insights they need to guide their choices. Suddenly, progress that used to take months or years is achieved in weeks. And what happens to your competitors? They’re left behind in a cloud of dust!