photo by myuibe
A few days ago I read an article in the Harvard Business Review Blog by Tom Davenport called: “Microdecisions for Macro Impact“
Here is a short part of it:
What many companies don’t realize is that microdecisions – small decisions made many times by many workers at the customer interface – can have a major impact on the business. How they are made can be the difference between sloppy and effective execution, and between profit and loss. If you can identify a few key microdecisions that can be addressed and improved, you can often dramatically improve performance.
I really like the basic idea. The little things do matter. It reminds of the “Broken Windows Theory” which I really believe in. Davenport suggests two main practical methods to implement after identifying microdecisions in order to dramatically improve performance:
1. Automate – take the decision out of human intervaention and thus make sure it is done in the correct way. Completing Davenport’s article, James Taylor writes:
Even if you don’t want to completely automate a micro decision, you should probably think about using decision management to reduce the range of options available to a human decision maker or at least rank the available options by likely effectiveness. A decision service can automate a micro decision but it can also provide support for a micro decision in this way.
2. Introduce checklists – There is ample research that shows checklist improve performance even in cases of professions like doctors in hospitals.
3. Key metrics – If you cannot automate, establish key metrics that are consistent with the goals of the process.
I must admit that I like the last advice better than the first two. It reminds me of the concept vital signs and of the change in the thinking about measurementI discussed just a few days ago. While I recognize the importance of automation and of checklists and realize that in certain setting they could be very effective, I think that in other settings they have a potential to hinder efficiency and create technocrats and to reduce motivation. So, they should be introduced with thought where they can really make an impact and where they fit with the environment, people and culture.
This reminds me of the basic difference between Common Law systems (like that of the US, UK, Australia and more) and Civil Law systems (like those of France, Germany and more). While in Civil Law systems the law tries to create a code, which is basically a list of possible outcomes and assign a rule to each outcome, in Common Law systems, generally speaking, the law gives a general guidance and leaves the interpretation of the law to the court.
The problem with trying to create rules that encompasses all the situations that can happen in a business setting is very hard to do. Life is just more complicated. Mr. Murphy likes to pay a visit from time to time. I think we all sat in front of some customer service representative trying desperately to fight the computer system telling him/her that the request of the costumer is not possible.
This is why, in situations where automation is not the answer or in addition to automation, people should be empowered to make decisions. But how do we still avoid the problems of microdecisions? two thoughts:
1. Communicate your vision and goals clearly in a way that guides people’s decision making. When someone is deliberating what decision to make, he should have the company’s guiding principle in his head, guiding him to make the right decision.
2. Chose the right people. People who have the ability to make the right decisions as a matter of intuition. I would refer you to the talk about “Practical Wisdom” by Barry Schwartz and the discussion of it in my blog.