Startup challenges and how they can differ from large companies: Decision Making

Having a ‘Steve Jobs-like’ founder with more of an autocratic style of management can obviously have its pros and cons. But one of the real benefits of this personality–led organization is a simplified decision making process – since it is very clear who the decision maker is and what their decision is. This clarity makes it very easy to align the organization around a common goal and reduces the amount of thrashing that can go on debating what the decision should be. Not everyone will agree all the time with the decision and people might quietly continue questioning it, but the benefit of having a final decision made and moving forward is quite beneficial to an organization.

I’ve worked at or been involved with several startups in which the company did not have a single founder who controlled most of the major decision making. Instead there were leadership teams  with distributed power who worked together to make decisions.  The two main issues I have seen in startups of a reasonable size are either  1) dragged out decisions or worse, 2) decisions that were continually re-opened after they were made.

Over my career I have seen the ingredients that go into good decision making. They consist of three key elements:  a good process, data/information and teamwork.  Big companies use some form of RACI, which stands for Responsible, Approver, Consult, Inform and is used to clearly define team member roles.  By knowing which position to play and acting as a subject matter expert, the team can function more effectively; especially when the right data is presented to facilitate a decision.

 

Agreement & Commitment

Once a decision is made there are two components:  Agreement and Commitment.  Usually getting some form of agreement is possible for most well-organized teams. But the challenges I have seen is where there is passive-aggressive behavior by some team members. Someone who says they agree in a meeting, but then takes steps afterwards to either re-open or torpedo the decision because they didn’t really agree.  This situation is pretty common where there are strong personalities and divergent opinions about the direction of a company, business unit or product.  These types of behaviors are killer for a startup, they can handicap the entire organization when there isn’t true commitment to decisions that have been made. The amount of lost productivity and wasted energy used to further debate the decision has an incredibly negative primary and secondary effect on an organization. Everything from just lost time, to reducing engagement of quality employees who realize what is happening.

A specific example from a past company is when our product team had made a decision on how a specific feature was to be built. However, the engineer who ‘owned’ that module of the  product did not really agree with what should be built, so he just built it the way he wanted to without telling anyone until he was finished. Needless to say when he showed off his works the entire product team was surprised at what he done. Now, to give him credit, there were elements to what he built which had some merit and would have enhanced the original agreed-upon features. But instead we got a little bit of ‘right’ to go with a lot of ‘wrong’.  Somehow the product team needed to do a better job of both listening to the engineer to improve the final decision which incorporated his ideas. This engineer was top-notch.  However his team skills were not up to par. The engineer shared some responsibility in not committing to the decision and finding ways to share his ideas.

 

What to do?

So how do you handle repeated inefficient decision making in a startup? First, make sure the basics described above are in place. If the issues persist, ‘how decisions are made’ becomes a leadership and management issue.  Look at the people on the team and determine if there is a teamwork issue.  Are people playing their position?  In young companies, it is not unusual for leadership not to have a lot management experience and training. It is very possible that someone just doesn’t realize that they are overstepping their bounds in how they try to affect the direction of the company.

My experience has been that some people just fundamentally disagree with the direction that the team is taking and they use their power to subvert decisions and drive their own agenda. This is poison to a startup and people like this, no matter how talented, tenured or experienced they need to either be straightened out quickly or asked to leave. As my first manager at Procter & Gamble told me, it doesn’t matter how brilliant a musician someone is, if  the whole band is marching in one direction and they want to go in another, you gotta let them go.