Decisions By Consensus Can Kill Your Growth
I recently met with the CEO of a multi-divisional business to discuss an issue that was critical to the firm’s future. The company’s number one strategic goal is to drive its growth rate to a never-before-achieved level over the next 3 years. I presented a solution that would almost ensure that he would achieve that goal. CEOs of smaller companies would have asked me where to sign on the spot. He decided that he wanted to get consensus from his division heads before making the commitment. This is exactly the type of “decision-making” that has been killing growth potential in his company all along.
To add a little more background to this, the company’s human resource department conducted an extensive search that took almost 9 months before selecting our firm. We did some pilot work to determine whether our assessments would help improve the talent they bring to the company. While going through the process they learned that it could also be use to analyze the existing talent so they asked us to analyze a small sample of their sales force. Based on this analysis we learned there appears to be a number of hidden weaknesses among their sales managers and sales representatives. These weaknesses were probably costing them a lot of growth because of lost opportunities and slower sales cycles. However, since the sample was not representative of the whole organization it was our recommendation that they do a complete analysis before drawing a final conclusion. Common sense would say, “Let’s take a closer look at this, and quickly, to know for sure.” The price tag to do it was insignificant to the company, and we had over 20 years of research to validate the success rate of our process. Yet here we were, not moving ahead.
The real issue here is when and how to use consensus decision-making. An effective leader knows when and how to engage the others on the leadership team in making a decision. You engage other leaders when they are the appropriate people to give you input to make a proper decision. However, there are times when a leader has to decide alone and rally the troops around the decision after it has been made. Let’s take the situation I’ve described. This is not an appropriate matter for a consensus decision. The company has already decided it needs to grow in a way that it has never done before. It knows it will require tools, strategies and methods that are new if it wants new outcomes.
Furthermore, the division heads have not been engaged throughout the discovery process. The CEO might be able to use 15 minutes at the management meeting to present the proposal. He himself needed 2 hours with me for us to discuss and go over it, and we probably needed more time than that to talk about it. Prior to our meeting, there was a year of research that yielded insight already proven to be useful and profound. However, without the rest of the data they will never know if there is truly a gaping hole in their sales organization. Why would one allow one’s subordinates to say no?
Imagine you are a division president and someone presents this new idea for which they want you to spend your money. You already have vendors and assessments you prefer. You are a strong leader and think you know how to achieve your sales plan without spending that money. Worse, what is being suggested might require significant change in “your” company! It would require you to agree to having your people assessed by someone not of your choosing. You might learn some things about those people that were hidden blind spots. It could mean that you might be encouraged to fire some people that have not been performing but are well-liked and have been trying hard. Some of these people have been with the company for a long time.
The new proposal means that management will have to change the way in which they manage people because they really have not been doing their jobs as well as they should. It means that culture will have to be more accountable; that is not comfortable. It means that employees will have to do things differently, and they will complain. That is not comfortable. It also means that the company will have to invest money on assessments, recruiting, processes, systems, and training and will have to wait a while to see results.
Or, you could just say no and keep doing what you’ve been doing. What do you think most division presidents would choose?
I said at the beginning of this article that the consensus decision process in this company is killing growth. My firm was selected after extensive research to help this company achieve its goal. We have been working with them for over a year. So far, everything I have brought to the table has had a decision process that looks like the above. We have lost a year of implementation to trying to gain consensus.
For example, we established that their bar for hiring salespeople should be higher. They were going to use our assessments to help hire top-performing salespeople. So far, in filling 5 positions, our assessments have recommended against 4 of the people they hired anyways. Just think of the growth opportunities that lurk in this company if they moved away from consensus.
Howard Shore is a business growth expert that works with companies and people that want to maximize their growth potential by improving strategy, enhancing their knowledge, and improving motivation. To learn more about him or his firm please contact Howard Shore at (305) 722-7213 or [email protected].