Hanno Nevanlinna provides a case study of a new decision-making model that is transforming his organisation’s agility and employee wellbeing
Leaders in the modern world have seen changes to the old ‘command and control’ models of leadership of the past and are embracing new methods of connecting with their communities, organisations and employees. Today’s leaders are more aware of their role in helping people find meaning in their everyday work, of lowering and removing the barriers to success and overall building systems that make everyone in their organisation feel welcome and valuable. This new type of leadership has shown to produce results.
However, the world around us is changing at unprecedented speed. Organisations and individuals are under stress and are forced to innovate, iterate, and adapt in an agile way to survive in a highly competitive environment. To do that, decisions need to be made at a rapid pace without compromising on the organisation’s viability. But decision-making is hard – both on at the individual and organisational level.
Decisions have previously been seen as a top-down process, where even the smallest decisions with a relatively small impact have needed approval from supervisors with different levels of seniority and from different departments. Individuals’ capability to make decisions, and the feeling of trust needed to execute their vision based on their professional expertise, has been widely neglected in traditional models of decision-making.
Decisions need to be made at a rapid pace without compromising on the organisation’s viability. But decision-making is hard
To move away from this mindset, all business unit leaders must stop micromanaging decisions for their units and move towards being leaders who show their teams the strategic direction for the business and let the team make the operational decisions on how to get there.
The problem in individual decision-making is to make sure that all decisions are holistic and don’t drive benefits only from one perspective. Decision-making can quickly turn into anarchy, where decisions are based on short-term, individual benefits. This doesn’t mean your employees are not trustworthy. It just means that short-term, individualistic decisions are easier to make.
To build a low-hierarchy organisation that stays relevant and fast, leaders need to tackle this issue with a transparent and equal model. The 4×2 decision-making model was developed, with years of iteration and repeated messaging, the organisation of several hundred globally dispersed, capable individuals use this model to make decisions faster and more comprehensively. This is how it works.
When an employee is planning, they are asked to look at the decision from the point of view of:
1. How it affects people, like themselves and their colleagues
2. How it affects customers and other stakeholders
3. How it affects the organisation’s business
4. How it impacts on the world and the environment
In addition to these questions, impact needs to be viewed with short- and long-term effects.
For example, you need to decide on whether to fly to another country to meet with a client. With the 4×2 model, you might want to think about the cost of flying to your clients and your team. Will that cost be saved somewhere else if you meet with the client team in person because the project is more likely to be successful? Is flying the only option to achieve this, as it is not good for the environment to fly for a meeting lasting just two hours? If the project is solving a massive ESG problem and meeting in person will help get better results in the longer run, flying might be the best option.
By analysing the decision-making with the 4×2 dimensions, employees can feel more confident and secure. When every decision can be justified with a proven model, it creates psychological safety and assurance that, even if the decision might be the wrong one, it was justified at the time with the knowledge available.
Not every dimension is equally important for every decision. What matters is that employees seek insights, data and secondary opinions to understand the full impact of their decision from the dimensions mostly affected.
Keys to success in the 4×2 model
1. The model must work for all levels of the organisation. The usage of the 4×2 model needs to be transparent and cohesive for the whole company. Every decision, starting from the management board level, needs to be able to be openly explained through the 4×2 framework. Everyone from CEO to intern uses the same model.
2. Use your communications team to brand the model. Repeating the message in a fully branded and packaged way helps the whole organisation to buy into the model. Use your comms team to help you with that.
3. Change decision-making gradually. If your organisation’s decision-making model has been heavily reliant on top-down management, the freedom to make decisions needs to be given gradually. Opening up all opportunities simultaneously and suddenly can cause chaos and insecurities.
4. Accept that wrong decisions will be made. As a manager, you need to acknowledge and embrace the fact that wrong decisions will be made. Without the freedom to also make a wrong decision, there is no real trust in the team. Almost always, when wrong decisions are made, it’s caused by a lack of knowledge or awareness – not a lack of understanding or malicious intent – as you have hired intelligent adults. And without failures, has anything ever been achieved?
By granting the freedom for employees to have an impact on their own work by deciding what is the best way to do things, they’ll most likely be happier with their work by having the sense of ownership and the ability to affect it – proving a win-win situation for organisation, team and individual.
Hanno Nevanlinna is co-founder and head of culture at Futurice