How your decision making approach is impacting your company's velocity
There is a near universally accepted wisdom in startup folklore, that speed is a competitive advantage. However, it doesn’t matter how quickly you’re moving if you don’t know which direction you want to travel in. What really matters most is velocity. Velocity is the speed of something in a given direction.
Credit: Farnam Street
You may not have the capital, people-power or brand reach of <insert big tech name here> that you’re competing against for market share, however, the two things that you can control is:
Which market you are going to try to deliver value in (products and value props evolve but having a semi-solidified idea of both short term and long term user value and mission enables you to set direction for your teams - avoiding wheel spinning)
How quickly you get to market (within the bandwidth of your resource constraints)
One of the quickest ways to increase velocity is to take consistent action in a particular direction, while remaining open to the potential need to iterate along the way. To increase your rate of action, you need to increase the speed of decision-making, both big and small. It sounds simple, however, it is in the act of decision-making that I’ve seen most teams slow down and become stuck. Small decisions can turn into multi-day discussions and large decisions can get held up in planning cycles or endless upward approval processes. If we assume that most startups want to be successful, and that rapid yet thoughtful decision making is a core component of what is required to increase velocity, which in turn increases the probability of being successful then, why don’t more people make more decisions more frequently?
Barriers to decision making
Most decisions are reversible or least survivable. Making decisions is a prerequisite to being able to make increasingly more informed decisions (e.g. you can only assess product-market fit, when you’ve made a series of previous decisions about which market it is you are trying to fit into in the first place). However, organisations can inadvertently develop protocols and traits that prevent rapid decision making. The below list is non-exhaustive but explores some of the most common barriers encountered.
Is the right decision making infrastructure in place?
Most decisions don’t need a complex RACI in order to be made, however, in highly collaborative companies it’s surprisingly common for teams to not know who can make the final decision. If you feel a lack of momentum across certain areas of the business as yourself:
Who should make the decision?
Do they know they are the decision-maker?
Have they been publicly empowered to do so?
This may seem like an obvious question but in situations where many people could potentially make the decision (flat hierarchy, cross-functional teams) being explicit about who should make the final decision can save a lot of time. For example, Product, Customer Success and Sales may all be working towards increasing user retention, however, deciding which team ultimately has ownership over this metric will help prevent endless discussions on potential solutions (of which there are an infinite amount) and help increase velocity by increasing the likelihood of action in a particular direction taking place through increased direct accountability.
Does the decision making culture allow for speed?
Speed is a habit. Like any habit it can be learned and improved upon over time. When developing habits, your environment impacts the likelihood of a habit taking hold. Your company culture is one of the biggest influencers to determining your company’s velocity.
Does your culture optimise for avoiding risk taking even in low stake scenarios?
Does your culture require consensus before moving forward?
Does your culture reward process, and increasing complexity of decision making?
If the answer to any of the three above is yes, you may have a culture which is inadvertently devaluing speed, therefore limiting velocity.
Is there a sense of psychological safety?
If people feel like their mistakes are going to be held against them, then they are more likely to optimise for reducing errors, rather than creating new solutions. There is a great article here on how to create psychological safety within teams. To determine if you or your team are operating in an psychological safe it environment, reflect on the following:
When outcomes aren’t as expected, are decisions reviewed with blame or curiosity?
Are poorly made decisions openly spoken about and learned from, or are they used as weapons to shame and undermine people in future?
Is the decision-maker left to sink or swim alone in their decisions, or are they supported within a group?
If the answers to these questions predominantly evoke negative feelings and behaviours, then it’s likely that a lack of psychological safety is impeding your organisations ability to increase velocity.
Conclusion
Velocity is achieved by both knowing where you want to go (direction of travel) and taking action to get there (speed). Reviewing how decisions are made and outcomes (whether good or bad) are reacted to in your organisation may provide insights as to how you can increase your company’s velocity going forward.