Boosting Organisational Agility and Resilience Through Decentralised Decision-Making
In this rapidly evolving corporate landscape, it’s perhaps unsurprising that organisational agility has emerged as a key indicator of success – those businesses prepared to adopt a mindset that allows them to pivot towards new opportunities while nimbly negotiating obstacles, are the ones most likely to weather the storm.
Capitalising on different perspectives
A recent survey by McKinsey showed that by focusing on improving operational agility – by, for example, instituting flatter hierarchies, creating collaborative, cross-functional teams and facilitating a culture of psychological safety – organisations are positioning themselves to acquire a valuable competitive advantage.
It’s this same quest for greater agility that’s also fuelling the growing trend for decentralised decision-making.
Businesses are already embracing greater diversity within their teams as a route to improved creativity. But, while increasing the diversity of perspective might help drive innovation and bolster resilience, its success will largely depend on leaders’ willingness to cascade the decision-making process as far as possible.
Amrit Sandhar is the founder and CEO of &Evolve.
‘It’s important that organisations can quickly respond to their rapidly changing environment. Even in workplaces where diversity is championed, traditional hierarchies – where the senior leaders review, decide, and initiate the implementation of the best course of action – will struggle to keep up.
‘Not only are these decision makers more likely to hold entrenched views, they’re also the furthest removed from employees on the front line who are better placed to drive greater creativity and innovation.’
Unlocking workforce potential
Decentralising decision-making isn’t just about distributing authority, however. It’s also important to build a foundation of trust that taps into the potential of every team member, cultivating a supportive and collaborative environment, reinforcing mutual respect and understanding, and driving organisational success.
Keith Keating is a Chief Learning & Talent Officer and author of L&D guide The Trusted Learning Advisor.
‘When individuals are empowered to make decisions, it generates a sense of ownership and responsibility, making colleagues feel valued and respected for their insights and expertise. Trust is further solidified as teams witness the tangible impacts of their contributions on organisational outcomes, reinforcing a collective commitment to shared goals and values.
‘This not only strengthens interpersonal relationships but also fuels a culture of innovation and resilience, as teams feel more confident to explore novel solutions and navigate challenges collaboratively.’
If handled confidently, it’s an approach that can deliver results, even among geographically distributed teams.
Jessica Zwaan is a startup and technology executive, and is the author of HR guide Built for People.
‘Decentralising decision-making has always been an instrumental strategy for creating resilient and innovative teams.
‘However, with the rise of remote working and the dispersal of teams across various locations and time zones, it has become even more critical as it allows companies to respond more quickly to changes and unforeseen challenges, while empowering team members and accelerating innovation.
‘Centralised structures often slow down the innovation process. However, when empowered to make decisions, all teams can test, iterate, and implement new ideas without the bottlenecks of bureaucracy.’
Taking a healthy approach to managing conflict
With more ideas on the table, conflicting decisions are inevitable.
Dr Anita Starzyk is an assistant professor in Organisational Behavior at NEOMA Business School.
‘The goal should be to make the best possible decision given the circumstances and available expertise, while acknowledging that these decisions might look different when the conditions change and additional knowledge becomes available.
‘Employees will buy into this process, so long as they perceive that the decision-making procedures are transparent and reasonable – where it’s clear how diverse perspectives were considered and, how they have informed the final decision, and why some perspectives weigh more in a decision than others.’
However, engaging in these conversations not only requires high levels of trust and psychological safety but also the willingness to ‘disagree well’ without spiralling into destructive conflict.
Alison Grieve and Jenni Miller are L&D experts, team development coaches and authors of Leading Edge: Strategies for Developing & Sustaining High Performing Teams.
‘When a team has a shared common purpose, it is more likely they can disagree well. This can be hugely motivating and actually promotes individual accountability as people are more likely to engage in conversations, debates and brainstorming sessions with the energy necessary to achieve the desired higher purpose.’
Effective implementation is key
Drawing on a diverse range of people, ideas and opinions can unlock rewarding new approaches or solutions. That said, considering multiple perspectives at once can sometimes hinder the implementation process.
Dr Alison Watson is Head of School of Leadership and Management at Arden University.
‘Although bringing in employees to create a more distributed decision-making approach is effective, how the leadership team carry out these changes is important and will also require strategic thinking.
‘While a trademark of modern leaders is being able to make in-the-moment decisions, leadership will become more focused on aligning short-term business objectives with longer-term plans; this will allow for agile responsiveness while still connecting it to wider business goals. As such, it is no longer about autocratic leadership – instead, empowerment and development are now becoming the norm.’
Establishing a robust decision-making framework is also crucial, according to Liz Stewart, Global Head of Leadership Assessment & Development, Odgers Berndtson.
‘Responsibilities can be distributed, dispersed or delegated, but accountability cannot. Leaders must agree collective charters which align required outcomes and prescribed behaviours and values within a defined, decision-making framework designed to bring teams together in pursuit of a common goal.
‘These frameworks also allow teams to quickly revisit phases to accommodate new thinking, findings or intel – reviewing original assumptions and criteria, re-examining the implications, and holding or changing course at pace, if required.’
Shifting the balance of power
Decentralising the decision-making process marks a shift away from traditional command-and-control leadership styles and towards a more modern approach that aims to forge a deeper connection between employees, their colleagues and the organisation. Importantly, it emphasises why their commitment matters and how their hard work makes a difference.
Robert Ordever is European MD of workplace culture specialist, O.C. Tanner.
‘Significantly, modern leaders don’t try to manage, they provide direction and then step out of the way. They encourage collaboration, shared leadership and innovative thinking, and then provide their teams with the ongoing support and encouragement they need.
‘Our 2023 Global Culture Report shows that when modern leaders empower their people to take ownership, make decisions, lead and innovate, there’s a 78 percent increase in engagement, a 255 percent increase in the incidence of great work, and a 184 percent improvement in how leaders are perceived by their employees.’
To ensure the best chance of success, however, it’s critical that everyone – not just a chosen few – should be given the opportunity to collaborate, to innovate and to take risks.
Anita Starzyk: ‘The shorter the decision-making chain of command, the quicker employees can make decisions about key actions.
‘Taking this approach means that not only will employees at lower ranks be empowered, but that managers will also unleash time and energy to focus on more strategic aspects of their roles, responding proactively to the ongoing changes and challenges we all face.’