Views on the process of enterprise decision making

Abstract: According to foreign media reports, foreign well-known media, "Forbes" long-term writer Drew Hansen, a recent author of the enterprise decision making process of the enduring topic gave their views. In his view, start-ups should be charged with making decisions

According to foreign media reports, the well-known foreign media "Forbes" long-term writer Drew Hansen has written on the "business decision making process" of this enduring topic gave their views. In his opinion, the start-up enterprise should draw lessons from the "rapid theory" established by Bain (Bain & Company) in the decision making, and try to make clear its decision-making frame by this method. At the same time, he also believes that Google (Weibo) "Three-person" success is only a case, it is not worth the vast number of start-up companies to follow suit.

The following are the main contents of the article:

For a start-up, the founders tend to make every big choice for the company, and hope to improve the efficiency and execution of the company. With the growing size of start-ups, the company tends to focus on the development of a particular area, and develop related derivative functions and services around this focus area. One of the big advantages of this change in corporate architecture is that executives can appoint a functional manager for each service and function to make decisions within their capabilities and to improve the efficiency of the company.

However, the company's architecture also has its own flaws, that is, when a decision involves a number of functional departments of the company, this organizational structure is likely to face the risk of collapse.

As a result, any management team that is a start-up in a fast-growing state must find a way to manage the business that keeps the company growing. A tempting option for cross-functional decision-making is to create a so-called "decision-making process" that, while effectively addressing cross-sectoral decision-making issues within a company, can also reduce the efficiency of the Organization's organizational operations.

In this context, we combine Amazon's sub below to enumerate three recommendations to help start-ups get through this transition.

First, fully understand the "leaders control the overall situation" the truth.

Bain, a well-known consultancy, advises start-ups to adopt the so-called "rapid theory" when making important strategic decisions that can help companies identify the specific responsibilities of each executive.

The specific rules of "rapid theory" are as follows:

Provide reference data (Input): the person responsible for providing the reference data needs to provide sufficient data support for the formulation of a decision, which is the basis of any correct decision. Those responsible for providing reference data also need to make their own judgments about a possible decision, and can use the data to support the decision, but they cannot raise objections.

Recommendation (recommend): the person responsible for providing the advice usually needs to make an integrated decision-making process and be responsible for evaluating the related affairs or providing other feasible solutions.

Approval (Agree): The person responsible for ratification often needs to first endorse a certain action plan, and then use the rights in their hands to allow a given programme to pass.

Decision (decide): No matter how many choices there are, there must be a final decision in the business. At the same time, such decision-making mechanisms also define the scope of accountability for everyone.

Execution (perform): The person or team responsible for the execution level is usually responsible for implementing specific corporate decisions and needs to ensure that the company's decisions are completed quickly and efficiently.

From my own experience, I have witnessed the mistakes made by many companies in making decisions. For example, the lack of reference data may result in a company's internal debate about a problem and ultimately will not help solve the problem.

Second, the Division of decision-making power.

Splitting decision-making power means giving the company decision-making power to the hands of two or more people. In this regard, though, I can also think of some exceptions, such as the "three-person rule" between Larry Page, Sergei-Brin (Sergey Brin) and Eric Schmidt, who successfully led Google through 10 years of history.

But in general, the disagreement at this level may even put a start-up at risk of paralysis unless the company has a clear decision-making framework.

Third, establish a communication platform.

Qualtrics, a business data analysis software firm headquartered in Utah State Provo, is known for its excellent execution, which convenes a weekly meeting of executives to discuss strategic decisions. Also, employees may be invited to attend the meeting, and can express their opinions and even participate in the decision-making process. Due to time constraints, the discussion at this meeting is usually rigorously screened.

To be fair, the establishment of a suitable communication platform really helps to ease the difficulty of making complex decisions. Jeff Bezos, Amazon's CEO, said in an interview with Fortune magazine last year that he and his senior executives would hold a regular secret meeting called "S-team". In the meeting, company executives will discuss a 6-page "narrative company Memo", usually drawn up by people who provide reference data and advice in a similar "rapid theory", while corporate executives are primarily responsible for "approvals" and "decisions".

"A complete sentence is more difficult to write than a descriptive sentence because it contains verbs and each paragraph has its own theme sentence." But a 6-page narrative structure corporate memo can often provide clearer ideas. Bezos explained.

We hope that these suggestions will help start-ups build their own clear decision-making processes, which is one of the essential elements of their sustained development.