In our previous article, we proposed solutions that centered around categorizing decision types and organizing quite different processes against them. And a chemicals company CEO we know found himself devoting precious time to making hiring decisions four levels down the organization. A pharma company hesitated so long over whether to pounce on an acquisition target that it lost the deal to a competitor. One healthcare executive told us he sat through the same 90-minute proposal three times on separate committees because no one knew who was authorized to approve the decision. The reasons for the dissatisfaction are manifold: decision makers complain about everything from lack of real debate, convoluted processes, and an overreliance on consensus and death by committee, to unclear organizational roles, information overload (and the resulting inability to separate signal from noise), and company cultures that lack empowerment. Managers at a typical Fortune 500 company may waste more than 500,000 days a year on ineffective decision making. Our sources for this estimate included and the US Bureau of Labor Statistics (for salary data). Assuming that at an average Fortune 500 company of 56,400 employees, 20 percent are managers who work 220 days per year: these managers spend an average of 37 percent of their time making decisions, and 58 percent of this time is used ineffectively. And 14 percent of C-suite executives report spending more than 70 percent of their time on the topic. 1 On average, 54 percent of respondents to our survey report spending more than 30 percent of their time on decision making. The opportunity costs of this are staggering: about 530,000 days of managers’ time potentially squandered each year for a typical Fortune 500 company, equivalent to some $250 million in wages annually. Fewer than half of the survey respondents say that decisions are timely, and 61 percent say that at least half the time spent making them is ineffective. A survey we conducted recently with more than 1,200 managers across a range of global companies gave strong signs of growing levels of frustration with broken decision-making processes, with the slow pace of decision-making deliberations, and with the uneven quality of decision-making outcomes. Since then, we’ve conducted research to more clearly understand this balance, and the results have been disquieting. Worst because organizational dynamics and digital decision-making dysfunctions were causing growing levels of frustration among senior leaders we knew. Best because of more data, better analytics, and clearer understanding of how to mitigate the cognitive biases that often undermine corporate decision processes. Two years ago, we wrote about how it was simultaneously the best and worst of times for decision makers in senior management.
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