Boardroom

How Everybody Wins With Clearly Defined Decision Making

When we first started Credera back in 1998 there were two equal partners. While I was president and CEO, my partner (who is no longer with the firm) had equal footing and we weren’t always on the same page. Say hello to conflict. The lack of clearly defined roles and responsibilities nearly killed our company.

Your company needs to have a clearly defined decision-making process. It needs to be clear to everyone what role has what responsibility. Who is ultimately in charge?

That wasn’t so clear for Credera in the beginning. Before starting the firm we didn’t think through how to make decisions when we disagreed. Big mistake. My partner was and continues to be a terrific guy. I think highly of him. We just saw things differently. A lot. Something needed to change and to his credit, he realized it before I did.

In 2004 we brought in my current primary partner, Rob Borrego, and made some changes. We bought out my previous partner and decided that Rob would make decisions as the new president and CEO. While we were equal partners we agreed that one of us had to make the final decisions. Someone had to be the boss.

But we learned the hard way that it’s never so simple.

Rob is the president and CEO, but I’m on the board of directors. Rob ultimately reports to the board. So who’s in charge? Where does the buck stop?

We’ve had to sort these issues out and it hasn’t always been easy. But it’s so important.

How to Decide the Decisions

Over the years we’ve had plenty of experience with getting responsibilities wrong and we’ve learned a few things about how to do it right. Here are three tips that have helped:

1.  Clearly Establish Roles.
Decide who makes the which decisions – the CEO or the board of directors. Those roles and responsibilities have to be clearly defined so everyone knows what to do.

2.  But That Doesn’t Fix Everything.
Recognize that even when the roles are clear, you’re still going to have problems. We had issues come up and we stepped on one another’s toes. So we had to get good at resolving conflict. Learn how to deal with the conflicts and don’t be afraid to address them.

3.  Be Humble.
Both Rob and I are passionate and confident—even when we’re wrong. It’s not always easy to admit that. But one of the keys to a happy and successful company is to step back from your pride and let humility take over. Two prideful people with differing views will just beat their heads together. But two humble people with differing views are willing to step back and consider which option will work best.

The Benefits of Clearly Defined Decision Making

So why does all of this matter? If you’re constantly crashing into conflict over every single decision your company isn’t going to get anywhere. Your work is going to grind to a halt and your employees will be stressed out. They’ll bolt.

But when you figure out how to make decisions and have clear roles and responsibilities, everybody can do their job. Here’s how it can benefit your employees:

    • They can do their work without hindrance, distraction or stress
    • Clear boundaries give them freedom to be creative and effective
    • Having everyone on the same page gives clarity and focus
    • Your company can become a cohesive unit, working better, stronger and faster

All of this means happier, more efficient employees. That’s healthier for them and it means your company can grow and make more money, which supports employee career paths and raises. Everybody wins.

Avoid conflict and embrace success by making sure your decision-making process is clearly defined.

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