Organizations face a big challenge today as they want to include all the right stakeholders and at the same time achieve more agility in their decision making processes. They are constantly striving to provide clients with more agility, while trying to give partners and employees the empowerment they expect. It is very hard to deliver both things.
When you include more people in the decision making process, you tend to increase response times and coordination costs. But at the same time, to increase organizational agility you need more responsiveness and coordination. You need the right people and to be faster. Are these two things contradictory and impossible to achieve together?
The Current Trend
We see that the trend is that more people want to make faster decisions more often. This tends to create tension between stakeholders. Two different departments may be trying to solve the same issue and may need to work together to achieve it. But their interactions can easily become overlaps and can create conflicts between them. This is very common in organizations.
Today’s data driven world allows more people within an organization to instantly access and share data. This enhanced visibility allows users to be aware of situations in real-time. But manager and operational teams don’t always have the ability to act on that data.
Michael Jensen created an approach called decision rights, that clarifies who has the authority and empowerment to make decisions. It is basically a governance model for organizations to make more agile decisions while allowing the most important stakeholders to take part in the decision making process. It is necessary to define the right to make decisions in order to achieve efficiency in an organization. Just as managers need to define roles and tasks, they also need to allocate decision rights. When a team has more decision rights, it becomes more empowered.
There is a responsibility assigning matrix called RACI that answers four basic questions:
Responsible. Who is completing the task?
Accountable. Who is making decisions and taking actions on the task?
Consulted. Who will be communicated with regarding decisions and tasks?
Informed. Who will be updated on decisions and actions during the project/process?
Organizations need to map the fields in their RACI. This can be done quite easily. RACI helps organizations achieve decisions in a more agile way. It also allows both stakeholders and management to have more visibility.
Nowadays, the biggest trend is that decision rights are being applied to data and analytics. Most questions revolve around who has the right to access, process, store and share data. There is a structural shift happening: Smart Data changes the application of decision rights.
A new relationship has formed: decisions rights are essential to governed data management and analysis. And data is required in order to create ah-hoc decision rights. Thanks to the rise of Smart Data, organizations can access and process more and more data. Different departments can access the data and need to collaborate with each other in order to get more value from the data. For example, decision rights need to be defined to determine how the marketing department will collaborate with the IT department.
The rise of Smart Data makes companies rethink their decision rights and RACI. As new data can be accessed for analytics and new insights are discovered, decision rights need to be redefined. New collaborations need to be formed within teams and departments. As the decision making process becomes increasingly data-driven, decision rights need to be data-driven as well. This emphasizes the importance of data governance and collaboration.
Enterprises need to consider them as a priority when choosing a BI and data analytics tool. Tools like Panorama Necto 16 offer fully governed self-service data analysis and allow users to collaborate between each other even on a specific cell level. This ensures that one version of the truth is maintained when decision rights shift to adjust to the newly gained insights. Organizations today need to redefine their decision rights and they need to use a solution that supports that quest for both agility and governance.