J.W. Marriott Jr. is Halfway There

When hotel magnate J.W. Marriott Jr. was recently interviewed by the New York Times, it struck me that, throughout his career, Marriott has been implementing a method of leadership that is very similar to the Decision Maker Approach. Marriott describes how he learned the power of asking others for advice as a young adult during an influential encounter with President Dwight Eisenhower. In Marriott’s words:

So here’s the president and the secretary of agriculture, here’s my father [J.W. Marriott, founder of the hotel chain], and here I am. They wanted to take Ike to shoot some quail, but it was cold and the wind was blowing like crazy. My dad said, “Should we go and shoot quail or should we stand by the fire?”

And Eisenhower turned around and he looked at me and he said, “What do you think we should do?”

That made me realize how he got along with de Gaulle, Churchill, Roosevelt and others–by including them in the decision and asking them what they thought. So I tried to adopt that style of management as I progressed in life, by asking my people “What do you think?”

As anybody who has read The Decision Maker can guess, these are two textbook examples of the all-important Advice Process. As the leader of the free world, President Eisenhower didn’t need anybody’s help in figuring out how to spend his free day. But, in just a couple seconds of conversation, he made a potential outsider feel like a vital part of the conversation, making an indelible impression on the young businessman. While others might not remember their conversations with us as vividly as they might remember conversations they had with the President of the United States, leaders at all levels of any size company can always make that outsider, that potentially disengaged employee, a vital part of the conversation and decision-making process. Marriott Jr. sums up this philosophy eloquently:

The four most important words in the English language are, “What do you think?” Listen to your people and learn.

Of course, as anybody who has read The Decision Maker also knows that Marriott Jr. is not following the most crucial step on the decision-maker process: allowing people at all levels of the company not just to give their advice, but allowing them to actually make the crucial decisions that will move the company forward. I’d imagine that the people who work with J.W. Marriott Jr. find him a lot more approachable than a typical business leader, who will exert a tight-fisted monopoly on every element of important decisions. But I’d bet that Marriott Jr. would find his people even more engaged, collaborative, creative, and productive if they weren’t just asked for advice but empowered to make decisions.

Limit the Decisions You Make as a Leader

My hardest job as a CEO: Not making decisions.

Yes, you read that right. My goal as an executive is to make only one significant decision a year.

But isn’t that what a leader is supposed to do? Take the heat, call the shots, and have the final say?

That’s the conventional wisdom on leadership. But it’s also the main reason that only 54 percent of workers are satisfied with their boss or immediate supervisor, according to a recent Gallup poll. Most people don’t get to make meaningful decisions at work, so they are not fully engaged.

I had my own early encounter with the dangers of top-down decision making. On a visit to a power plant during the early days of AES, a machine operator told me that he had been overseeing his equipment when it began to exhibit slight vibrations.

He knew something was wrong. Unfortunately, at the time, he was required to get clearance from his supervisor before shutting the equipment down. He simple didn’t have the authority to stop the production process on his own, even though he had the expertise to evaluate the situation. He spent nearly 20 minutes trying to locate his supervisor. By the time they returned, the machine had overheated and was severely damaged; a piece of equipment with a value of nearly $30 million. I knew then that the operators on the floor needed to be empowered to make those key in-the-moment decisions.

My message to aspiring leaders: You don’t have all the answers. You are fallible and are often out of touch with the day-to-day realities of your company.

Being a true leader at work has less to do with knowing everything and more about knowing who to trust or where to go to get results.

Before you make your next key decision at work, ask yourself: Are you closest to the issue? Do you have experience making similar decisions? Do you know the right decision to make? Not sure? Good.

Here’s what to do next:

Get advice. Seek out input from people below you and above you, inside and outside of the organization. Get comfortable asking for information, looking at a problem from all sides, and getting input from your peers or superiors.

Delegate. The higher you climb in your career, the more important your ability to recognize your own strengths—and weaknesses—and the strengths in those around you. Use that knowledge to delegate and empower others. I don’t mean just the grunt work, handing off things you don’t want to do. Rather, partner with people to help you resolve a situation faster, better, and in a new way. When decisions involve more people who are fully engaged, your team has a higher chance of a good outcome.

Be Brave. It takes courage to surrender authority. It’s not always easy to give up the rush of being in charge. Whether you are the CEO, the shift manager, or managing a project for the first time, you’ll create a strong, nimble organization of engaged, empowered people.

It’s the age-old adage: a rising tide lifts all boats. Good leaders know this. Start now.

Dennis Bakke’s article first appeared on Xconomy.com

 

A Convincing Argument For The Hands-Off Boss

Nothing tells you more about an organization than the way it makes decisions. Do leaders trust team members? Do the people closest to the action get to make the call? Do team members have real responsibility and real control? All of these questions can be answered by one other one: who gets to make the decisions? And nothing affects an organization more than the decisions the people in it make.

Great business minds know this. In fact, decision-making is at the heart of all business education. Nearly a hundred years after the case-study method was invented at Harvard, it’s still the foundation of the world’s best business programs. Why? It’s because the case-study method puts top business students in the role of decision-maker. Over the course of a Harvard MBA, students will make decisions on more than 500 cases. Decision-making is simply the best way in the world to develop people. And real-life decisions are more important–and more fun–than any case study.

But outside of business school, few business leaders tap into the value created by putting important decisions in the hands of their people. Instead, “team players” are taught to do what they’re told. This takes the fun out of work, and it robs people of the chance to contribute in a meaningful way. Or, organizations will use a participatory style of decision-making in which recommendations are given to the boss, who then makes the final decision. This approach also fails to fully realize the value of the people in the organization. What I am talking about is quite different. In a decision-maker company:

  • The leader chooses someone to make a key decision
  • The decision-maker seeks advice (including from the leader) to gather information
  • The final decision is made not by the leader, but by the chosen decision-maker.

The principles are simple. Some might even say common sense. Yet, they are seldom put into practice. But, building your business on these assumptions, using these simple but powerful techniques, can transform a business–and people’s lives.

Basic Assumptions People are unique. Fairness doesn’t mean treating everyone the same way. Some people want time off, some people want a raise. It doesn’t make sense to give everyone the same rewards and incentives, because every person is different. When we treat people as individuals, we unlock each person’s unique motivation and potential.

People are creative thinkers. People are capable of coming up with good solutions to problems. They don’t need to be told what to do at every juncture. In fact, the people closest to a situation are often in the best position to come up with a solution. When we set people free to think creatively, they come up with solutions we never could have gotten to by following rules and regulations.

People can learn. We don’t stop learning when we come on the job. People are capable of educating themselves to meet new challenges–and capable of educating others.

People are fallible. We all make mistakes. We have blind spots. And sometimes we just plain do the wrong thing. To work to our best ability, we need the input and insight of others.

People like a challenge. People aren’t machines. We weren’t built to do the same thing over and over again. We’re happiest when we get to meet a new challenge–and master it. People want to contribute. Each of us has something unique to offer, and we want to contribute it toward something that matters. We work best when we feel like we’re making a positive contribution to the world.

People are responsible for their own actions. It’s fair to hold us accountable for the consequences of the choices we make.

People can make important decisions. Leaders aren’t the only people in the company who are capable of making good decisions. People are happier, decisions are better, and companies are more productive when decision-making is distributed among all the people in a company.

Who Decides

In a decision-maker culture, the most important choice a leader makes is: who makes the decision? These are hallmarks to look for in a good decision-maker.

Proximity. Who’s close to the issue? Are they well acquainted with the context, the day-to-day details, and the big picture?

Perspective. Proximity matters, but so does perspective. Sometimes an outside perspective can be just as valuable as proximity.

Experience. Has this person had experience making similar decisions? What were the consequences of those decisions?

Wisdom. What kinds of decisions has this person made in other areas? Have they been good ones? Do you have confidence in them?

The Advice Process.  Nobody knows everything, and even an expert can benefit from advice. In a decision-maker culture, the decision-maker makes the final call but must ask for advice. Whom should a decision-maker approach for advice?

Experience. Has this person had experience with this problem? There’s no teacher like experience.

Position. People in different positions see different things. The decision-maker asks a leader, a peer, someone who works in a position below them in the hierarchy–and even, if circumstances warrant, experts from outside the company.

Responsibility. Decisions have consequences–and decision-makers should be held accountable for theirs. At the same time, nobody is right all the time. The most important part of any decision is that the decision-maker fully engages with the advice process, not just that he or she gets it “right.”

Ownership. When people are asked for advice, they start to feel ownership. Ideally, everyone who offers advice works for the success of the project as if it were their own. The advice process isn’t just about getting the right answer. It’s about building a strong team and creating a process of communication that will improve all decisions in a company.

Dennis Bakke’s article first appeared in Fast Company.

The Principles of a Decision-Maker Organization

A mission statement that challenges people to create the world’s most fun place to work is essential for organizations that want their employees to have one of the most gratifying experiences in their lives. This end requires no other justification. However, for executives who can’t get the dollar signs out of their eyes, it’s worth noting that the link between fun and superior performance is extremely strong. Research shows that when employees feel like tightly controlled robots, with no opportunity to make decisions or take action on their own, productivity and performance decline.

Even so, at AES it required constant attention to keep fun and our other shared values at the top of our list of priorities. Merely listing the key principles of an organization on a wall plaque will never make those principles a vital component of a company’s collective thinking. If values and principles are to set the tone for organizations and guide their decisions, they must become part of every task, plan, discussion, and operation.

Most employees make corporate decisions on the bases of what they believe their leaders value. How do they determine what their leaders think is important? They pay attention to criteria used for determining compensation. They read company presentations to shareholders and banks. They consider what factors their bosses use in making decisions. They track how leaders steward corporate resources. They watch how leaders live their private lives.

Three purposes or goals–service to society, economic health, and ethical values–should drive a company in equal measure. Major business decisions should be evaluated both on the basis of economic and noneconomic criteria. Strategic planning should start and end with an assessment of whether a plan serves all three elements of a company’s purpose. Compensation decisions should reflect “performance” in all three aspects of the company mission. Board members and other company leaders should stress the reasons that the organization has goals beyond economic success. In hiring and firing decisions, a person’s performance in non-economic areas should get heavy consideration. Communications with investors, banks, communities, and other stakeholders should describe the major aims of the organization and include a note of humility concerning its ability to live up to the standards it sets for itself.

I believe that private, profit-making institutions rather than governments and nonprofits can supply most of the products and services needed in society. If profit-making companies make “serving society” an important corporate purpose, organizations might even do a better job of providing services to the public than governments or nonprofit organizations. Moreover, capital is more easily obtained by profit-making companies because investors and financial institutions have the incentive of making a return. Non-profits are limited to donations or government allocations, which are often more difficult to obtain. There is no reason profit-making organizations cannot be just as effective as their nonprofit cousins in operating schools, hospitals, welfare organizations, and other public services.

Adapted from Dennis Bakke’s Joy at Work.

Praise for The Decision Maker

Since The Decision Maker was released in March, glowing reviews have come pouring in from all sorts of critics and bloggers. See for yourself what others have been saying about The Decision Maker:

-At the New York Journal of BooksEkaterina Walter writes: “As Dennis Bakke says, ‘No matter where you stand in your organization, change can start with you.’ Pick up the book, soak in the advice, and be the first to drive that change within your organization!”

-Atsuko Tamura, president and CEO of evo, says: “It’s a must-read/must-try for everyone–leaders, managers, and individual contributors in every organization. It just might be the solution that reconciles generational and attitudinal gaps in the workplace today.

-Barry Silverstein of ForeWord Reviews says that The Decision Maker “is a complete package that includes both an illustrative, realistic example and the background necessary for the reader who wants to successfully implement organizational decision-making. This is a book that is both enjoyable to read and useful for any business executive.”

-Will Lukang of the Lead Change Group writes: “For those who are interested in connecting with your employees, this is the perfect book for you to engage your employee.”

-Tim Jenkins of Point B Management Consultants says: “Companies are fond of saying their greatest asset is their people, yet few companies operate as if this is the case. In this engaging story, Bakke shows us how to unlock the latent potential that exists in any organization.”

-Publishers Weekly adds: “Knowing that the entertaining, ultimately rosy story is grounded in Bakke’s real-world experiences adds credibility to the narrative; the work’s engaging style is sure to inspire and captivate leaders and managers who wish to transform not only their business but also their employees’ lives.”

Let us know what you think about The Decision Maker on FacebookTwitter, or Amazon.

The Dennis Bakke Interview Roundup

Since the release of The Decision Maker in March, lots of people have been talking to Dennis Bakke to glean his wisdom about the transformative art of the decision-making process.

Check out some of the conversations Dennis has been having:

-Financial guru Dave Ramsey talks with Dennis Bakke on Ramsey’s EntreLeadership podcast in an episode titled “Making the Call with Dennis Bakke.” Listen to the mp3 here or get the free iTunes download here.

-Ben Lichtenwalner of Modern Servant Leader sits down for a video interview with Dennis.

-Dennis talks with the Washington Post about how new methods of decision-making could improve work in the federal government.

-Listen to Dennis’ interview with Bill Martinez on Bill Martinez Live.

-Read Dennis’ interview with Kevin Owyang at the Upstart Business Journal.

Have the methods of The Decision Maker changed the working environment in your company? You can always start a discussion at the Decision Maker Facebook page.

Level 5 Leadership and The Decision Maker Approach

Business analyst Jim Collins has written extensively about what average companies have done to transform themselves into exceptional performers and trendsetters. An essential ingredient for a good-to-great company, as Collins wrote in the Harvard Business Review, is the presence of a Level 5 leader. In Collins’ words, a Level 5 leader is:

The most powerfully transformative executives possess a paradoxical mixture of personal humility and professional will. They are timid and ferocious. Shy and fearless. They are rare–and unstoppable.

The “yin and yang” of personal humility and professional will is not just a nice accessory to the leadership style of a Level 5 leader–it’s an absolutely essential combination of traits.

Implementing Dennis Bakke’s decision-maker approach requires this exact same concoction of graciousness and boldness from leaders. They must possess the humility to voluntarily cede their grip on power–the power to make decisions–so that others at all levels of the company may be more engaged as they make better-informed decisions. They also must possess an internal tenacity that won’t let them waver from the course if a few decisions don’t work out as successfully as planned.

Collins’ research ends on a discouraging note: his study confirms the importance of a Level 5 leader, but Collins and his team find no information that illuminates how a Level 5 leader comes to be such an indomitable force. Thankfully, Dennis Bakke’s The Decision Maker teaches a new way of doing business that will stretch any leader to learn the humility and will required of a true Level 5 leader.

Why Leaders Need to Stop Making the Decisions

I believe the vast majority of people are creative, trustworthy, and capable of making meaningful decisions at work. My new book, The Decision Maker, is a clarion call for bosses to STOP making decisions. Instead of bosses making the call, I believe the best approach is to push decision-making down to the lowest levels of the organization; to those on the “front line”. It’s not always easy to trust and empower others. It’s hard to let go.

The summary slideshow of my thinking is available on slideshare.

One of the keys to empower others in your organization is what I call “the advice process.” It is a very simple, although often controversial, concept. It takes the “suggestion box” management approach of the 1970s and ’80s and turns it upside down. Instead of the boss getting advice and suggestions from people below, the decision-maker—who is almost always not an official leader—seeks advice from leaders and from peers.

Usually, the decision-maker is the person whose area is most affected, or the one who initiated an idea, discovered a problem, or saw an opportunity. If it is unclear who the decision-maker should be, the leader selects an individual to gather advice and make the final decision. Before any decision can be made on any company matter, the decision-maker must seek advice. The bigger the issue or problem, the wider the net that should be thrown to gather pertinent information from people inside and outside the company. In my opinion, all issues of importance require the decision maker to get advice. I’d go as far as to fire someone if they didn’t ask for advice on a big decision.

At AES, the global energy company I co-founded with Roger Sant, we did not always do a good job of carrying out the advice process, especially the requirement to reach beyond the team or business unit where the decision-maker worked. Sometimes, the information and analysis provided to the potential adviser was sloppy and incomplete. However, even with these weaknesses, the quality of the decisions using this approach was at least as good as those decisions made under more conventional management systems, often better. Probably more important, it made work more interesting and fun for thousands of AES people.

The advice process is my answer to the age-old organizational dilemma of how to embrace the rights and needs of the individual, while simultaneously ensuring the successful functioning of the team, community, or company. I observed that Japanese companies tended to emphasize the group and consensus, while American culture pushed rugged individualism. I believe the advice process strikes a better balance. It leaves the final decisions to individuals, but it forces them to weigh the needs and wishes of the community. Parenthetically, the Internet was made to order for our advice process. The kind of wide consultations that I advocate would not be possible in large, dispersed organizations were it not for email.

Five important things happen when the advice process is used by an individual before making a decision or taking action:

1. Asking for advice draws the people whose advice is sought into the question at hand. They learn about the issues and become knowledgeable critics or cheerleaders. The sharing of information reinforces the feeling of community. Each person whose advice is sought feels honored and needed.

2. Asking for advice is an act of humility, which is one of the most important characteristics of a fun workplace. The act alone says, “I need you.” The decision-maker and the adviser are pushed into a closer relationship. In my experience, this makes it nearly impossible for the decision-maker to simply ignore advice.

3. Making decisions is on-the-job education. Advice comes from people who have an understanding of the situation and care about the outcome. No other form of education or training can match this real-time experience.

4. The chances of reaching the best decision are greater than under conventional top-down approaches. The decision-maker has the advantage of being closer to the issue and will probably be more conversant with the pros and cons than people in more senior positions. What’s more, the decision-maker usually has to live with consequences of the decision.

5. The process is just plain fun for the decision-maker because it mirrors the joy found in playing team sports. The amount of fun in an organization is largely a function of the number of individuals allowed to make decisions. The advice process stimulates initiative and creativity, which are enhanced by wisdom from knowledgeable people elsewhere in the organization.

Dennis Bakke’s article first appeared on the Great Leadership blog.

The Decision Maker approach in action

Business leaders are recognizing the need to change their traditional leadership paradigms and re-think how and who makes decisions in their organization.  General Stanley McChrystal, who ran Joint Special Operations Command in Iraq and Afghanistan, talks about how he had to change his thinking about decision making to effectively lead.

“We grew up in the military with this [classic hierarchy]: one person at the top, with two to seven subordinates below that, and two to seven below that, and so on. That’s what organizational theory says works,” he explains. Against Al Qaeda, however, “we had to change our structure, to become a network. We were required to react quickly. Instead of decisions being made by people who were more senior–the assumption that senior meant wiser–we found that the wisest decisions were usually made by those closest to the problem.”  - General Stanley McChrystal, Secrets of Generation Flux, Fast Company

Distributed decision making isn’t just applicable in the battlefield–it’s changing business, too.  The CEO of Starbucks, Howard Schultz talks about the impact of distributed decision making in the growth of Starbucks:

“Early on I realized that I had to hire people smarter and more qualified than I was in a number of different fields, and I had to let go of a lot of decision-making. I can’t tell you how hard that is. But if you’ve imprinted your values on the people around you, you can dare to trust them to make the right moves.” ― Howard Schultz, Pour Your Heart Into It: How Starbucks Built a Company One Cup at a Time

March Launch Promotion

The Decision Maker will be available in bookstores and online on March 5, 2013. We want to reward everyone who orders the book from either Amazon or BN.com during the month of March with a one-time bonus. Here’s what you get:

- Order 2 books. get 1 copy of Dennis Bakke’s NYT bestseller, Joy at Work

- Order 10 books, get 10 copies of Joy at Work + Video Seminar on DVD ($500 value)

The fine print:

- Promotion is for U.S. addresses only

- Must purchase the hardcover edition of The Decision Maker

- E-Mail shipping confirmation from Amazon.com or BN.com to decisionmakerbook At Gmail Dot Com with your U.S. mailing address