Getting Clarity on Delegating Decisions
Building an organization that accelerates decision making is a combination of art and science. Part of it is identifying the kinds of decisions that get made and applying the right tools to them. Another critical element is understanding how the decision maker is vested with authority.
If you are the CEO of an organization, this might be a framework worth adopting for your team. Different people have said it was created by Peter Thiel, Jeff Bezos, or Keith Rabois — I’m not sure who gets the credit, but it’s a very powerful way to create clarity around how you are delegating decisions.
Every decision gets labeled with a “level.”
- Level 1 — I’ll Decide. For decisions that are highly critical or within my core area of expertise, I’ll make the call myself. While I’m always open to feedback, this decision is pretty set and I’m very unlikely to reopen it or want to spend a lot of time discussing it.
- Level 2 — I’ll Decide with Your Input. I want to hear your analysis, recommendations, and thinking. After gathering perspectives from you and others, I’ll make the call.
- Level 3 — You Decide, I’ll Approve. I’m largely delegating this decision to you, but I’d like to ratify it before you move forward.
- Level 4 — You Decide and Keep Me Informed. I trust you to make the decision on your own. Please keep me informed on what was decided, the rationale behind it, and the outcome.
- Level 5 — You Decide. I trust you to make the decision on your own. I don’t need to know the process, rationale, or details unless something unexpected comes up.
CEOs can continually evaluate their team by quantifying how many decisions are being made at each level.
- If almost every decision in your organization is Level 1, you definitely have the wrong people on board. Time to think about reshaping your team.
- The most critical directional decisions for a business should probably be Level 3, and then the ratification process might also extend to your Board of Directors.
- The fastest organizations push the highest quantities of decisions down to Levels 4 and 5. If you can’t do that, you probably have too much ammo and not enough barrels in your organization. (Quick analogy explanation: people are either barrels or ammo — you can hire unlimited amounts of ammo, and it doesn’t allow your organization to shoot any faster.)
The really powerful part of this approach is creating simple language that can align your team around how this particular decision is going to get made. Everything Level 2 and below is going to require work on the part of your team, but now they can instantly understand what level of work you are expecting.
