13.4. Designing and Executing Interventions

Armed with hard data and a commitment from executives to support much-needed change, Cedarwood's team, with help from top leaders in the company, designed a series of interventions aimed at speeding decision execution and removing inefficiencies from decision-making processes.

13.4.1. 1. Codify Decision Protocols and Rights

To reduce people's over-reliance on the legal department for routine decisions, the team had that department develop written guidelines for such decisions as joint marketing campaigns, summer hours for the R&D lab, and dress codes. Legal set out to formalize routine decision-making protocols in as simple a format as possible. It began by documenting the different stages in the drug-development process, such as discovery, clinical trial, manufacturing, and distribution. This made the stages more visible throughout the organization. Then it clarified decision rights for each stage, such as who had final approval on decisions in that stage and who had spending authority.

This codification process served two purposes: documentation and education. To make the guidelines easy to use, legal incorporated the decision-making protocols and rights into Cedarwood's intranet. The company had computerized many processes (such as early-stage FDA applications), with the goal of eventually becoming "paperless." Now, when employees generated a form online for, say, creating a request for proposal from vendors, a selection of drop-down menus, rollover screens, and highlighted words helped them find such information as the criteria for making a particular decision or who had the authority to approve it.

13.4.2. 2. Assign Ownership for Important Decisions

When Cedarwood was small, most decisions—big and small—had been made informally, by whoever was available. As the company grew, no one had codified who was supposed to make which kinds of decisions. Thus they escalated to the higher-ups. Even minor operational questions—such as whether employees could work flexible schedules during the summer—often ended up on top executives' desks.

To remove the temptation for high-level executives to take on any and all decisions that were dropped in their laps, the CEO and his direct reports established a steering committee comprising representative executives from the next level down in the organization (the operational level). Top leaders asked committee members which types of decisions they should own and which should be owned by the operational leaders. Members agreed that higher-level executives should own decisions related to strategy and policy, while lower-level ones should take responsibility for decisions related to operations.

Steering-committee members also discussed matters such as how much time executives should be spending on certain types of decisions. For instance, they determined that a senior executive should spend roughly 50 percent of his or her time on strategy-related decisions, and 50 percent on exceptions and unusual circumstances. But many were spending the majority of their time putting out operational fires. This was restricting the time available for them to focus on the strategy and policy decisions that they had agreed to own.

Drawing from these discussions, the multidivisional team developed decision-flow models showing which types of decisions were to be owned by executives and managers at each level in the organization. The newly published models and the formalized distinction between executive-owned and manager-owned decisions helped leaders at all levels in the organization immediately determine whether to take on a particular decision. And it reduced the number of people who felt compelled to "touch" each decision.

13.4.3. 3. Decrease the Density of the Decision-Making Network

To further simplify decision making as well as delegate and communicate decision roles and rights, the team decreased the density of Cedarwood's decision-making network by combining committees that had become redundant, such as the pricing and distribution committees.

Previously, there had been some overlap in membership across the two committees. Thus, decisions about pricing or distribution would often be sent to people in both groups—creating over-involvement and slowing down the decision process. By integrating the committees and streamlining membership to only those people who had to be involved in pricing- and distribution-related decisions (according to the recently published protocols), the team reduced the number of people touching each decision and the number of steps it had to travel before being approved.

The CEO explicitly mandated newly integrated and streamlined committees to accelerate their decision processes. As a result, some individuals' decision-making authority was taken away, but team members explained that the change would create needed speed and efficiency and thus save money for the organization. Thanks to their ability to specify the benefits of the change, they encountered little resistance from these individuals.

13.4.4. 4. Improve Meeting-Management Practices

The steering committee established by the top executive team also instituted new practices for ensuring that meetings ran more smoothly and efficiently. Some of these practices reflected simple common sense, but executives hadn't yet taken the time to adopt them.

For instance, the committee codified the format for meeting agendas, which now had to contain information such as what type of meeting was planned (information-sharing? decision-making?), who "owned" the meeting topic, and who had to attend. Also, the committee instituted a rule that anyone invited to a meeting had to attend personally. No longer could invitees send someone in their stead who might not have decision authority regarding the issue under discussion. (This often-used tactic had become notorious for causing delays.)

13.4.5. 5. Strengthen Conflict-Resolution Skills

Some of Cedarwood's decision-process woes stemmed from the culture of "niceness" that had developed at the company. People were hesitant to disagree with one another and sought to avoid confrontation.

During decision-making meetings, if several participants disagreed with what someone else in the room had proposed, they'd decline to voice their concerns. The meeting leader would naturally assume that consensus had been achieved. After the meeting, however, dissenters would try to reverse the decision through back channels. Consequently, decisions often ended up reappearing on meeting agendas, even though leaders thought the decisions had been finalized. Not surprisingly, these behaviors wasted enormous amounts of time.

To correct the situation, the CEO required all managers at the director level and above to attend conflict-resolution training sessions, during which participants mastered skills for communicating differences of opinion. In particular, they learned how to clearly express what they wanted and to clarify one another's commitment; for example, "I want this clinical trial conducted. Will you commit to doing this? When will you have it done?"

When people began communicating in this way, meeting participants found it easier to determine whether they had in fact arrived at a decision. People began making decisions during the meeting, rather than using back channels to try to influence decisions afterward.

13.4.6. 6. Reinforce Decision-Making Proficiency Through Performance Management

To reinforce the message that decision-making proficiency mattered, Cedarwood evaluated executives and managers on this skill in their annual performance evaluations. Leaders were assessed on how well they adhered to their assigned decision-making roles and authority. They were also evaluated on the extent to which they helped minimize the time consumed by routine decisions and the number of interactions involved. To determine their performance on these criteria, a director reporting to the chief operations officer continued tracking decisions through the organization and tabulating the number of people who "touched" them.