Speed

Why is organisational decision-making so slow?

Invisible friction

Organisations are increasingly struggling to keep up with reality. The gap appears to be growing exponentially, and this is becoming a problem. For some organisations, the gap now represents an existential threat.

At first glance, it is not obvious what is draining the organisation’s energy. Work is happening. Meetings are taking place. Everyone acknowledges that we live in unprecedented times and so culturally the organisation is steadily embracing a more innovative approach.

On top of that the organisation has embraced agility, recognises the importance of its people and is taking a measured approach to embracing AI. Yet there is a sense of drag. What is perhaps more of a concern is that over time the organisation has reoriented itself to accept delays. Work simply expands to fill the gaps. The organisation has learnt to be slow.

The noise is not the problem

Once this organisational lethargy is recognised, the kneejerk response is to:

• Have more meetings

• Push the staff harder.

More circumspect leaders will explore initiatives, such as:

• Process reengineering

• Digital transformation

• Leadership development

• AI everywhere.

This feels more considered, more strategic and reflective of the seriousness of the problem. Yet despite the investment, the organisation remains slow.

Where the gears are grinding

On closer inspection patterns start to emerge. Decisions are revisited, sometimes repeatedly. The organisation does not fully trust itself.

Decision-making drifts upward. Leaders and managers defer, waiting to be told rather than choosing and owning the outcome.

Where decisions cut across functions, progress slows further. Misalignment, competing priorities and power politics create friction at the boundaries.

At the same time, the organisation struggles to interpret its environment. Signals are weak, fragmented or misunderstood, leading to decisions built on incomplete or distorted context.

Traditional governance, designed for a more predictable world, acts as a speed suppressant. It struggles to assess risk in unfamiliar situations, defaulting instead to caution, delay and control.

In combination, these issues create significant drag. This is why simply addressing the noise is not the solution.

At a fundamental level, the challenge, and the opportunity, is in developing an organisation optimised to sense, decide and act. Falling short in any of these creates heat and very little else.

These organisations fell short:

• Blackberry failed to sense the shift from email tool to lifestyle device. They focused on the enterprise when it was obvious that the consumer market drove all markets.

• Kodak sensed the digital camera opportunity, but they could not commit to a digital world when the film business was so profitable.

• Nokia despite recognising the need to embrace the smartphone and getting the leadership go ahead, failed to address its slow product cycles and inability to align teams around a single execution path. Microsoft’s late arrival into the cloud had similar symptoms.

It is fair to say that in each case it was a blend of sensing, deciding and acting failure.

Designing delay

Delay is an organisation design issue. Organisations of any pedigree that are still here clearly can sense, decide and act. However it is likely that whilst these traits were suitably responsive in less disruptive times, they are increasingly falling short and thus need to be addressed structurally rather than symptomatically.

And even with finely tuned sensing, cognitive capacity and the ability to move at place, the traditional focus on control will ensure that the handbrake is never quite disengaged. The perception that organisational behaviour should be predicated on risk minimisation and the avoidance of failure will similarly ensure that the accelerator and the brake become one and the same.

Poor sensing is a death sentence on the savanna. Missing the faint snap of a twig could spell death for the tribe.

Fragmented cognition leads to incoherent decision making. Environmental clarity still yields suboptimal decisions, particularly when they are made at a pace slower than that of reality.

Hesitant execution leads to longer feedback loops and thus organisational learning is impaired. Faint heart never won fair lady.

The issue of organisational friction is not new. Classics include:

• The Speed of Trust by Stephen Covey

• Team of Teams by General Stanley McCrystal

• Reinventing Organizations by Frederic Laloux

• Good Strategy Bad Strategy by Richard Rumelt.

At some level of abstraction, delay can be attributed to culture, strategy or leadership shortcomings. I believe it is more fundamental.

Speed isn’t what you think it is

You cannot just add speed. It is a consequence and not a capability. You can ‘pimp up’ your go-kart with Formula 1 technology, but it will never be a Bugatti Chiron Super Sport. Yet many leaders choose to ignore this reality. Much like the cosmetic enhancement industry, there is a parallel ecosystem selling the equivalent enterprise fantasy.

Friction burns

Organisational drag is a significant problem, particularly when markets move in real-time. Macroenvironmental disruption, which takes many forms, adds to the minute-by-minute uncertainty.

Perhaps ironically, AI does deliver speed. But when it is constrained by structural buffers, it just serves to create greater heat at the friction points.

Organisational drag leads to existential drag. This is why friction minimisation is so critical.

Where next?

If poor sensing, decision making and execution are the fundamental causes of friction, the question is no longer about superficial, quick win speed hacks and more about how to (re)design organisations that can keep pace with reality.