The best business decisions.

Who decides how your people decide?

In their wonderfully satirical book of 1969, Laurence Peter and Raymond Hull described and named a phenomenon to which I suspect anyone who has worked in a large organisation for long enough will probably relate.

They called it the Peter Principle, through which every employee tends to rise to their level of incompetence. But what began as satire became science when, in 2018, a study of sales teams in over 200 businesses found evidence that showed that exact same principle in practice.

It really does happen.

It happens because we look at the best performers in a team, and through a combination of wanting to reward and recognise their performance, and wanting their magic to spread among the others, we make them a manager. Two purposes for doing it, and two reasons we come unstuck.

Not everyone has the vision or interpersonal skills required to lead a team. And not everyone who is good at something can objectively explain why they are good, let alone teach it to someone else. Most of us are competent car drivers – indeed, most of us are well above average apparently – but few of us would make good driving instructors.

We need instructors and we need leaders. They rarely come in the same package. Our star performers may not be suited to either. And giving someone a job at which they will fail is not a great reward.

This is a classic example of blurred decision making, where we blur multiple aims into a single solution instead of making clear, discrete decisions on how to best achieve each one. And because of that, we fail on them all.

One of the techniques I sometimes use to help clients improve their decision-making is a live simulation exercise. The team works through a future scenario in accelerated time, during which events unfold, some minor, some major, and in response, decisions need to be made.

I introduce the session by offering them a decision-framework. Essentially for each decision they should ask themselves: what is the primary purpose we should aim to achieve in these new circumstances, what is the decision we need to make, what options can we create, on what basis should we decide, and when do we need to decide by.

To begin with, the teams invariably ignore the framework until we get to the first break when we review the previous hour of chaos and draw their attention back to it. Now they can see the value, they start trying to use it. Clumsily at first, but more quickly and intuitively as time goes on, to the point where, like driving a car, they can shift through the gears with barely a conscious thought for the process.

It’s not just the quality of decision that improves, but the style of their discussions, the creativity of their thinking, the level of debate, they’re all elevated enormously simply because they have a framework for making clear, purposeful decisions.

So, the question is, whether it’s about promotion of people or of product, navigation of an obstacle or opportunity, how purposefully are your people making their big decisions? Are they clear, or are they blurred, and how would you know?

Who teaches them how to make the best decisions?

Who decides how they decide?