Tag Archives: Operating Models

Decision Shock… and how you can eliminate it from your business

Decisions made and disregarded or overturned… Decision paralysis… Over-escalation of decision making to management… Disagreement and conflict over impacts… Reducing engagement levels.

Sound familiar? We call this ‘decision shock’ and it is all too common a phenomenon.  And considering that most businesses are now operating in markets and environments that punish indecision, rework and inertia, it is a phenomenon that necessitates a re-think about how decisions are guided, made and communicated within organisations.

Broadly speaking, there are three main types of decisions encountered in most businesses…
Strategic decisions – These decisions are reasonably infrequent, but significantly impact the direction of the organisation, have major and long-term implications to how the business operates every day, and once made, are not easily undone.
Operational decisions – These decisions require leaders and staff to interpret a scenario or inputs, contextualise and take a position in order to maintain operational momentum… often in response to unforeseen scenarios, or changes in the environment. Decisions around product design, pricing, purchasing, marketing, project planning, campaigns and promotions or risk management are all examples of operational decisions. These decisions are far more frequent and are critical in ensuring the organisation stays true to its strategic intent.
Cumulative BAU decisions – These decisions are most often based upon pre-determined policies, procedures and delegations. In theory, the sum total of every one of these smaller scale decisions should reflect a broader policy direction or strategic position.

Whilst Strategic decisions invariably receive the greatest amount of consideration and thought, a lack of relatable context and linkage of these decisions to the operational layers of the business often contribute to decision shock that stalls the understanding and adoption of change, delays progress and halts momentum.

When viewed in isolation, the impact of each smaller Cumulative BAU decision can seem less significant, but given the high volumes, the cumulative effect of these decisions can dramatically alter the outcomes for the organisation. In theory, these decisions should be simple… follow the policy and the end result should line up as you planned, right?.  However, often businesses find themselves way off course due to minor deviations from policy and discretionary exceptions that seem perfectly legitimate in isolation, but when combined with every other exception made, drive the operation miles away from the intended destination. The results of this phenomenon often only become apparent when reviewing quarterly or annual results long after the damage is done.  A death by a thousand painless cuts.

“…In many cases, the right decision will be plainly obvious as the operating model principles paint a clear picture of what success looks like for the decision maker…”

Arguably the most difficult decisions however, are the Operational decisions.  More often than not, your operational staff and their leaders are expected to take responsibility for these decisions.  The reality is however that most leaders and staff are simply not equipped with adequate strategic context and therefore lack the confidence to make the critical decisions expected of them, leading to the types of issues I mentioned at the top of this post.  Worse still, many experience damaging blowback when their decisions are perceived to be incorrect or ill-conceived.  The negative impacts to self-confidence, performance appraisal and engagement can be long lasting, and sadly the real cause of the issue is seldom recognised.

Getting any of these decisions right, relies on those making the decisions to:

  • have a clear understanding of how to interpret and operationalise the business strategy and vision,
  • be in perfect alignment with all other linked or impacted areas of the business, and
  • formulate the decision based on the insights and information available.

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Without operating model principles, your strategy and vision are just words on a page…

“To be the provider of choice for…” “To offer a superior service to our chosen markets…” “To be the market leader in…” The vision sounds fantastic. But what now? What does it really mean to the way your business operates, and how do your people align what they are doing every minute of every day to deliver on that vision?

There’s no question in our minds, vision statements are critical. They set the direction and tone for an organisation, focus attention, and make great mouse pads. But underneath that is an even more critical level of information – your operating model principles. When defined well, a clear operating model makes everyday decision making simple for every team member, provides unambiguous clarity of purpose, and gives every stakeholder a tangible understanding of exactly how the vision and strategy will come to life through every interaction and every process. Even with the clearest of visions, organisations that fail to define their operating model principles can experience misinterpretation of their strategy, inconsistent decision making, failed deliverables, confused customers and even more confused staff.

Whether you’ve defined your strategy and vision for your company, your system transformation program, or for the next five years of growth, to truly bring your people along with you and help them create a tangible identity with what they are employed to achieve, your staff also need a tangible, clear and unambiguous set of principles with which they can make predictable and consistent decisions, think and create safely, work autonomously, and act with confidence. A well defined operating model will enable all of that.

In return, you will receive greater empowerment and ownership from your people; the volume of everyday decisions required to be made by your managers and leaders will reduce; and your business will work more harmoniously and efficiently and with less conflict and friction.

“…Even with the clearest of visions, organisations that fail to define their operating model principles experience misinterpretation of their strategy, inconsistent decision making, failed deliverables, confused customers and even more confused staff…”


The operating models we develop address the following seven key principle categories. The examples below are of course, not exhaustive, but illustrate the type of thinking we use to bring your strategy and vision to life. Not only do these principles articulate what your business will be, but also, where applicable, what it will not be.

Customers and People – these principles describe exactly what customers and industry segments you want to do business with; how your customers will/should/must experience their journey or interaction with your business; how your staff will treat them; and what the customer can expect from you if things don’t go to plan. These principles also describe how it will feel for your staff to work within your organisation.

Products and Services – what are the products and/or services you will offer (and avoid offering); how should they be designed to behave; how should your customers experience them; how should they compliment each other; how will they compete with your competitors; how will you achieve growth; and how will you win?

Channels of delivery – how will your customers interact with you; what options will be available to them; how will you keep up with emerging trends and technology; and how will your multiple channels integrate with each other?

Processes – how will your people execute their functions; what will be their role in decision making; how much automation do you require/desire; how will you ensure efficiency; how should processes be designed; how should your staff and customers experience those processes; and what is your approach to continuous improvement?

Information and Data – what information do you need to deliver your strategy and vision; how will you store and use the information and data you have gathered; what role will it play in delivering superior products and services; and can your customer benefit from the information and insights you have collected?

Technology – what system capabilities do you need to meet your goals; what is your appetite for emerging technology; what is your tolerance for multiple systems and interfaces; how will your systems and platforms integrate together; how do you protect your customers and your business; and how will you maintain and upgrade your technology?

Capabilities & Culture – How does your business need to be structured to succeed; what are the management and leadership capabilities required; what are the key skills required by your people in order to deliver your strategy and vision; what capabilities do you expect your customers to possess in order for them to succeed with your products/services; what mix of human talent and diversity do you aspire to; how will your staff experience being employed; what is the culture you require/expect within the business?

These operating model principles then become the foundation that supports the design or transformation of the organisation, layer by layer, and shape decision making across your entire business. Your managers, leaders and team members can all validate their thinking and everyday decisioning against an unambiguous set of principles that all drive action that compliments your intended vision and your strategy. Furthermore, these same principles can be used and adapted to the design of a project or program of work, a specific value chain or even a single operational process, ensuring that at both the macro and micro levels of your business, there is an agreed, understood and integrated operating model defining the way you do business every day, and elevating the strategy and vision from your page to your reality.

Do you really need to make that decision? The path to empowerment and discretionary time.

As a leader or a manager, it’s your job to make decisions, right? Some, absolutely, but consider this… a large proportion of the decisions you are making may be holding your customers up, costing you valuable time, and ultimately contributing to staff disengagement.

Reflect for a moment on all the decisions you’ve made today, this week, this year. First, reflect on how many decisions you made around assessing, setting and validating your strategic direction, or your operating model in response to market changes, or where your growth will come from next year? These are certainly the decisions you should and must be engaged in – you should be living and breathing these. Now reflect on the rest… Were they related to interpreting policy, resolving a basic customer complaint, a price discount, positioning stock, designing a new product feature? If you’re a sole trader, you’re excused. For everyone else, ask yourself, how much time am I spending in this space? And if I am making these decisions, how are my staff feeling?… Is my intervention dis-empowering them from performing their roles end to end.

“…People who are empowered to make the decisions related to executing their roles, have higher job satisfaction, are more likely to stay with your organisation, are more fulfilled in their work, and more likely to deliver better outcomes for customers and your business…”

Chances are these operational decisions are not hard to determine, and most likely your staff know instinctively what the decision should be… if given the opportunity to think it through. Moreover, the vast majority of decisions referred to leaders and managers can easily be converted into a standard policy, discussed and trained with your staff, and utilised on demand by your people, on the spot with the customer.

There is overwhelming evidence suggesting that people who are empowered to make the decisions related to executing their roles, have higher job satisfaction, are more likely to stay with your organisation, are more fulfilled in their work, and more likely to deliver better outcomes for customers and your business.

The challenge for managers and leaders is to let go of the control, and trust that your people can, and will, make the decision you would make. This is where your policies are critical, not your processes or procedures. The time investment in developing and embedding coherent, end-to-end policies that capture the true intent and the boundaries around each customer interaction, process and decision point, will set your operation up to be a far more efficient, empowered and engaged work environment.

The payoff for leaders willing to implement this culture and capability, is reduced stress and precious time that can be reinvested into the forward thinking and critical directional and strategic decisions that keep the business competitive and ready for the next wave of change. You’ll also create time for the investment in development of your staff… so often overlooked or de-prioritised, but equally critical for your long-term viability.

It’s been said many times that “decisions are made by those who show up”. Just remember, you’re not the only one who showed up for work… your staff are already in position, and you’ve got other important things to do.