A635.2.3.RB_CliffordMarc

How Companies Can Make Better Decisions

Greenfield (2004) indicated that “moving some decision making closer to employees could easily become the most financially valuable initiative most companies could undertake.”  In addition, “most studies found a statistically significant positive relationship between strong corporate culture and financial performance.” Blenko (as cited in Harvard Business Review, 2010) stated that “Companies that are better at making and executing decisions really do seem to operate at a much faster metabolism and have better financial results.”  Organizations that empower their employees to make decisions demonstrate improved performance for a couple of reasons. First, recruiting and training expenses are reduced. Employees that are engaged and empowered are more loyal to their employers, and are less likely to seek alternative employment options. Companies that generate loyalty and engagement in their employees have lower turnover, and therefore have lower training and indoctrination costs.  Second, engaged and empowered employees that have been given the authority to make decisions that affect their work are generally more productive than unengaged employees. Forrester (as cited in Greenfield, 2004) indicated that “Twenty-four percent of employees like their jobs and are engaged. Fifty-five percent of employees dislike their jobs and are disengaged. Nineteen percent of employees are actively disengaged (making their discontent widely known and very clear).”  These statistics imply that many companies and organizations waste a great amount of time and energy due to lack of employee engagement. In fact, Greenfield (2004) states that “as much as two-thirds of their total available time and energy” is wasted by lack of engagement. The majority of of the employees that become disengaged from work lose interest because of “dissatisfaction with and conflicts with management” (Greenfield, 2004). As organizations improve their decision making processes and empower their employees to make decisions affecting their work they reengage and are reenergized.  Engaged employees are more productive and therefore help to increase the productivity of their organizations. Blenko (as cited in Harvard Business Review, 2010) indicated that there is “a very high correlation between decision effectiveness and employee engagement. . . .companies where it’s easier to make decisions and get things done are more stimulating places for employees to work.”

Despite the statistics that clearly indicate that empowered and engaged employees are more productive, many organizations still fail to distribute decision making authority among the workforce for multiple reasons.  Organizational complexity can foster environments in which management finds it challenging to empower their employees and stimulate high levels of engagement. Complexity makes it challenging to clearly identify who in the organization has power to make decisions.  Management behavior and techniques can affect the level of employee engagement; authoritarian leaders tend to create an environment in which employees do not feel empowered. Management that lacks leadership skills and use a command-and-control leadership technique cause employees to become disengaged and feel less empowered.

Blenko (as cited in Harvard Business Review, 2010) suggested that decision effectiveness has four components: quality, speed, yield, and effort.  Quality decisions are based on evidence and facts as opposed to opinion, and take into account viable alternatives. Good decisions are not made too hastily, but excessive time is not taken either.  An organization’s ability to execute it’s decisions is known as yield. Effort includes the “time, trouble, expense, and sheer emotional energy” (Blenko, 2010) that is required to make and implement decisions.

Greenfield (2004) indicated that “Two keys to creating or re-creating employee engagement are creating a sense of belonging to a group and developing a sense of confidence and control over parts, at least, of the work experience.”  I can create an environment in which the pilots that I oversee are fully engaged by fostering group belonging and by empowering them to make decisions about the work that affects them.

During this exercise I have discovered the benefits of value-based operations as opposed to command-and-control operations.  Greenfield (2004) stated that “The primary requirement for a value-based operations program is, of course, a common set of values.”  In values-based operations a framework of values is established within an organization that guides decision making. Organizations that utilize value-based operations flatten the hierarchy and spread the decision making authority by empowering employees.  Aviation is typically a command-and-control industry managed by an abundance of regulations and policies and procedures. If aviation companies were to establish safety as a core value, embed it throughout the organization, and then empower their employees to make decisions, they would likely be able eliminate numerous policies.  Value-based operations creates an environment in which employees become actively engaged, and organizational performance increases.

References

Blenko, M. W. (2010). Decide & deliver: 5 steps to breakthrough performance in your organization. Boston, MA: Harvard Business Review Press.

Greenfield, W. M. (2004). Decision making and employee engagement. Employment Relations Today, 31(2), 13-24. doi:10.1002/ert.20013

Harvard Business Review. (2010, October 13). How companies can make better decisions, faster [Video File]. Retrieved from https://youtu.be/pbxpg6D4Hk8