I’ve spent a lot of time making and thinking about decisions within organizations. One thing I’ve noticed is that the best decisions are those that are the best informed (obviously). However, collecting and analyzing enough data to make the “best” decision can be a significant investment. This typically results in leaders collecting some data and making the best decision they can. In even worse cases a leader makes a decision independent of anyone else’s ideas. A very typical autocratic technique. In today’s day and age I believe most leaders wish they could collect the wisdom within their organizations (or even market) to make every decision.
There are many approaches to trying to achieve decision making that takes advantage of organizational knowledge. Surveys, Town Halls, Wiki-like platforms and even whole operational frameworks like Holocracy seek to help with this. There is much to be done and learned about the flow of information from the “edges” of the organizations back to leadership and vice versa. Hedge fund manager Ray Dalio describes some interesting techniques for building an “idea meritocracy” in his TED talk below.
I believe that ideas like these are the building blocks of the next generation of corporations. There are a handful of things we still need to figure out.
1) How do we deal with the “emotional load” this type of environment creates? As Ray mentions in his video, some 30% of the workforce can work with this level of radical honesty.
2) What are the heuristics for building effective teams? We have things like MBTi, DiSC, Strengths Finder, Hogan, etc. but these tools classify people based on research, not necessarily empiricism. Further, little has been done to understand how to use these tools to effectively build teams.
3) If decisions are being made on the “edge” of an organization, how is that information propagated back to leadership? That is, for leadership to continually be strategic they need to have an accurate understanding of the decision happening “in the field.” Some have argued that traditional ideas of leadership are outdated and organizations citing business models like Valve and Zappos. Given the track record of these models, there is still kinks here.
4) What is the correct balance of leadership and a self-discovering organism?
5) Are there standard “interfaces” for teams, and teams of teams to communicate effectively with one another?
6) If hiring and firing decisions are made by the self-discovering and self-managing organism, can over and under production be properly controlled?
These are just a few of the problems I’ve seen and thought of. I’d love to hear your thoughts!