Risk with high probability and catastrophic damage
Risk with low probability and minimal damage can be self-insured, meaning I am willing to accept the risk and endure the consequences.
Risk with high probability and minimal damage will depend on my threshold and tolerance for pain. Even a splinter in a finger can be annoying.
Risk with low probability and catastrophic damage creates mitigation behavior. I may be willing to accept the risk, but in the event the risk occurs, I want to mitigate the damage. I may seek outside protection, an insurance product. Insurance rates depend on low probability to calculate the premium.
Risk with high probability and catastrophic damage creates prevention behavior. To protect my best prevention behavior that inevitably fails, I may seek outside protection, an insurance policy. Insurance rates consider the high probability to calculate the premium and often, actively participate in the prevention behavior.
What risks come with your business model? How do you manage that risk?
When you seek advice and counsel from others, you must reveal the whole story, not just the part that will yield advice you want to hear. Truly seeking advice and counsel from others means you have not made your decision and are interested in other perspectives and outside analysis.
If you seek only to locate opinions that support your skinny point of view, you violate the 11th commandment, “Thou shalt not kid thyself.”
The solution to a problem will not be found by the same thinking that created the problem in the first place. – Albert Einstein
Many technology initiatives fail in an attempt to preserve existing methods and processes. Adopting a piece of software supplants existing work. Technology changes the decision making and problem solving of humans. Human work changes.
You talk about work as making decisions and solving problems. You talk about discretionary judgment. When I tell a team member about their role (in a role description), it seems more like a list of tasks that have to be completed. How do I talk about discretionary judgment in a role description?
Most role descriptions are as you describe, a disorganized list of tasks and activities. But, when we hire a team member, we are not paying for their tasks and activities, we are paying for their discretionary judgment. If we were just paying for task completion, we would hire robots. And, every role has decisions to make and problems to solve. Every role requires discretionary judgment.
A typical supervisor task is to post a work schedule for the team for the following week. But that is just the outcome. Here is the discretionary judgment part.
This task requires the supervisor to look ahead on a rolling 4-6 week basis, to anticipate changes due to team member vacations or other circumstances that will affect the team member’s attendance. And to look ahead on a rolling 4-6 week basis, to anticipate changes due to production fluctuations which may require a reduction in shift personnel or overtime. The supervisor will use discretionary judgment to create the schedule based on those circumstances.
Become a manager. Don’t give me politically correct rhetoric that we shouldn’t judge. Management is all about judgement. Work is making decisions and solving problems. Making decisions is all about judgement. Elliott called it discretionary judgement.
The Time Span of Discretion is the length of time (target completion time of a task) that a person has, in which to make judgements that move the task to completion (the goal). We make judgements about –
What is the goal?
What has to be done now?
What has to be done next?
Who, on the team, would be the most effective at completing this task or that task?
How effective was the team member, completing this task or that task?
Management is about making decisions. For better or worse, good judgement, poor judgement. -Tom Foster
In your workshop today, you asked two questions –
What have been your growing pains (as an organization)?
What has to change going forward?
It occurred to me, the reason our company is stuck, is that decision making always gets pushed to the CEO. In our executive team meeting, whenever there is a decision to be made, even seemingly routine decisions, I see heads go down, deference to the CEO. We all wait, unable to make a move until she speaks.
Dependency is the collusion required to institutionalize parenting and patriarchy. It’s a two-way street. Given the opportunity for the CEO to play God, it is very difficult to resist. Allowing someone else (the CEO) to make the decision lets the executive management team off the hook of accountability. It is a perfect collusion.
Allowed to persist, the executive management team is crippled from making ANY decision, especially those they should be making. When all decision making streams through the desk of the CEO, speed slows down and accountability is concentrated.
When you understand levels of work, you are suddenly able to determine what decisions are appropriately delegated and who to delegate them to. There is appropriate decision making at every level of work.
When the decision emerges in the executive management team, ask these two questions –
What is the appropriate level of work to make this decision?
Who, at that level of work, will be accountable for the consequences of that decision?