Principle-based Corporate Decisions
I have always believed that the majority of the operational decisions of a company need to be made from a set of core philosophies, precedent of past decisions and guidelines—those that guide the rationale behind nearly every decision. This is called principle-based decision-making, as opposed to situational-based models that make one decision at a time without a repeatable philosophy or rulebook. I have seen companies where situational-based decision making is dominant, creating erratic “one-off” decisions dictated by personality, familiarity and the last lobbyist. Mr. X receives a different decision than Ms. Y because of who they are or when they ask, not based on the principle of the issue.
Inconsistency of decision-making confuses those within the company, often giving way to a process of “game-playing” to get the desired answer. This is particularly an issue in technology-oriented companies due to the genetic personality type of the leadership. The natural tendency of the technology-trained decision maker is not to elevate to principle, but rather to dive into more detail. These individuals feel that somehow, by obtaining more detail, enlightenment eventually becomes evident and custom decision-making is a more sophisticated approach. But detail mining can also be used as justification for inconsistent answers on issues. When situational-based systems dominate, people within the organization start to game the process. They plot the timing. They selectively choose the sequence of who to asks last. And they usually tell their friends how to beat the system to get the answer they want.
If situational decision-making takes over, layers of the company’s management create added variation. One unit’s answer to a common problem/issue may be totally different than another unit. Soon the rank and file of the company categorizes the managers into “liberal” […]