Decision Making Structures
Many professional firms grow from one practitioner and evolve into a team of silo teams sharing a common overhead structure, but is this really what is best for the firm? Even sole practitioners can’t juggle all responsibilities, let alone every practitioner juggling the same responsibilities in an ad hoc inefficient way.
Across Australia, I see very dysfunctional information flow and decision-making structure. I see a lot unproductive discussion, lack of decision making and minimal if any implementation. If you want to get a different outcome, you need to do something differently.
Whether you run a professional practice by yourself, or with other business partners, it’s important to define decision making roles to gain efficiencies throughout the practice.
Split out your organisational responsibility
Organisational responsibility is the most underrated diver of success for businesses. This is partly due to control over decisions not being delegated and if they are delegated, they’re delegated without any rules and direction.
Delegating responsibilities for day to day business decisions enables a business to make decisions in a timely manner while freeing up owners to generate more revenue for the business, implement strategic projects without distraction, but more importantly allocates responsibility for those making decisions.
Right people making decisions = efficient and effective
Delegation of responsibility should only be allocated to those who have the ability to make decisions and have the time to do so. If you as an owner don’t have time or the skill sets, hire those who do. Only with effective delegation of responsibility will you get action.
Responsibility + accountability = action
Who takes responsibility for what?
The owners of a business, or the board if referring to a listed company, need to be guardians of the business context. This is the vision of where you want the business to go. This same group should be the ones setting the goals and objectives that stem from the vision.
Decision making context = consistency
Strategies required to achieve the goals and objectives need to be set by the operations team. For most this maybe a combination of general/practice manager and key directors.
Once the strategies are set, it’s up to the team leads to monitor the team/department KPIs, both financial and non-financial, and become the key link in communication channels from operations team to individuals. This is a vital role that gets missed. How are your employees meant to understand their expectations or the businesses goals and objectives is they’re not communicated?
Finally, Individuals need to take responsibility for their own KPIs once known. They also need to understand what actions they take, and how these actions this links into businesses strategy. These actions should include the businesses core value.
Core values = behaviour
Why implement decision structures?
To create change in your firm, you must change the structure around how decisions are made, and the structure around how decisions are implemented. A culture of responsibility and accountability at every level is required for success
Decision making structures enable a business to run effectively if delegated to the right people who are empowered and have the ability to make those decisions. Decisions are likely to get made in a timeframe needed for effectiveness and in a consistent manner.
Finally, remember to focus on the good things (which are usually the majority) and manage the exceptions (which are usually the minority). You can choose where to focus your attention.