Posts Tagged ‘decision rights’

Decision Rights (part deux)

Wednesday, May 12th, 2010

In the last post, Decision Rights (part 1), I introduced the RACI Chart, explained what it is, and showed an example.  But why would anyone use the RACI model instead of just proceeding with business as usual?

First off, if your organization makes good decisions quickly and without looking back, then please carry on smartly.  But I have found that poorly-defined decision rights are at the root of many dysfunctional team dynamics.

Some advantages of clarifying decision rights:

Clearer boundaries and fewer fights. When stakeholders are unsure of who owns the decision (or multiple individuals all feel they should have a vote), the decision process can devolve into combative arguments, wherein each person struggles to push his/her own ideas and agenda.  The analogy:  kids in a sandbox all grabbing for the same toy.

Clear accountability. A decision with multiple approvers (decision by committee) has diffuse accountability (meaning, really, no accountability).  When a committee makes a bad decision, who is accountable?  On the other hand, when one individual has authority to make a decision, that individual can be coached to improve his/her decision processes or rewarded for good decisions (with an acknowledgment and/or increasing levels of decision authority over time).

Decisions are made with appropriate speed. When we require consensus from all committee members before moving forward, we effectively give every member a veto.  That slows down the decision process, even when there’s no more information to gather that could improve the quality of the decision.

Decision quality improves. Designating a “Responsible” party to tee up decisions, explore options, and make recommendations helps ensure that the best possible solutions are considered.  By having the right people involved (subject matter experts and cross-functional stakeholders, e.g.) in the Consulted role, Approvers benefit from the wisdom of others.

Creating a RACI chart isn’t a panacea.  There is some hard work involved in making it work.  Some keys to success:

  • To preserve trust, respect, and credibility, Approvers must take into account the interests of those in the role of Consulted.  Approvers must make decisions based on “what’s good for us” instead of “what’s good for me.”
  • Leaders must provide feedback and coaching to Approvers on the quality of their decisions.
  • Teams must get good at creating RACI Charts “on the fly.”  It is impossible to predict every decision that a team will face.  A good starting point is getting used to asking, “Whose decision is this?”

What do you think?  Are there any other benefits to clearer decision rights that I’m missing?  How would clearer decision rights help your organization?

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Decision Rights (part 1)

Wednesday, May 12th, 2010

We were going at it cats and dogs.  Jim had hired me to run a change project for a client, and our views on how to best support the client were diametrically opposed.  We were both frustrated, and fiercely arguing our points of view.

At one point, I asked, “Wait, Jim, whose decision is this?”  He paused, reflected, and then said, “It’s your decision, Chip.”  I breathed a sigh and calmly said, “OK, please go ahead.  What input would you like me to consider in my decision?”  The tension in the room evaporated.  The discussion instantly morphed from a fight into a consultation.  And I was better able to really hear his points.  Clarifying authority for the decision made the difference between stalemate and progress.

A powerful tool for clarifying decision rights is the RACI Chart.  In this tool, participants in a decision process each have one of 4 roles:  Responsible, Approver, Consulted, or Informed.  This graphic explains each role:

Rules to follow which increase the likelihood of success using this tool:

  • One and only one Approver per decision.
  • The Approver must get the input of those in the Consulted role before making a decision.

Here’s an example of a RACI chart that describes roles in a project budgeting decision process:

Let’s look at line 2 and imagine that a Project Manager makes an unbudgeted purchase of $4,000 without talking to anyone on the project team about it.  Does the CFO have the right to object about not being consulted before that money was spent?  No.  According to this RACI, the PM is authorized to make those decisions (unbudgeted spend under $10,000) solo (serving as both the Responsible and Approver).  The PM might consult with others before spending that money, but isn’t required to.

How about line 3?  The Project Manager believes that spending $16,000 on a change management consultant will get the (delayed) project back on track.  The PM describes the idea to the Project Sponsor, who says, “Yes, good decision.  Spend the money.”  What should the PM do?  The PM should (respectfully) tell the Project Sponsor that the CFO is the approval authority for the decision.  Then the PM can make the case to the CFO by framing up options and recommendations.  In this case, the Project Sponsor doesn’t get a vote, but she gets a voice.  The CFO has the one vote that counts for this decision.

Make sense?

Why would anyone use a RACI Model?  In the next post, Decision Rights (part deux), I’ll discuss some compelling advantages.

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