At a first glance, it might look like a conflicting statement considering that a successful organization must be decisive and - according to Agile principle - “fail fast and safe”! In fact, it is not conflicting at all, but it is rather a complementary strategic capability, which significantly contributes in an organization’s success.
The idea of this principle – which is different from the “fail fast” Agile principle - is to wait until as late as possible before deciding. This allows you to gather information during the process, by getting feedback, to make the most informed decision. The Poppendiecks states that, delaying decisions are valuable because better decisions are made based on fact and not speculation, and a key strategy for delaying decisions is to build the capacity for change into the system.
Delay of decisions shall never be confused with deferred commitment or decision-making procrastination. It is about not locking your product or business strategy into decisions that are costly to undo later and critically asking the question whether you truly need to make the decision now. Therefore, it is just a strategic tactic, applied in all levels of decision-making, to wait until the last “responsible moment”, which in turn significantly depends on the way and effectiveness an organization executes. Additionally, delaying a decision or not, a working scenario to act upon is always required. Therefore, even when a final decision is delayed, partial or temporary decisions are made, so that to always have a “safe” working scenario until the final call.
The aspects below are considered as key differentiators and the foundation in organizations’ ability to take the best possible decisions in a continuous changing and dynamic business environment:
Effective execution adopting lean & Agile principles
Recognition of situation and adjustment of decision-making strategy accordingly
Understanding of the “last responsible moment” for decision taking
Let’s deep dive a bit.
Execution is the crucial aspect: If you can’t execute, it doesn’t matter what decisions you make. As importantly, if you can execute well, that frees up time to make better decisions. Successful organizations are going to devote a lot of time and thought in improving their execution. The way of execution and system setup is equally important. Adoption of lean & Agile principles significantly reduces cycle times and cost of change.
Thus, organizations shall build a realistic level of confidence in their ability to execute and react effectively with minimum or even no cost in case of change. This way, they won’t panic when they are under pressure and will not be forced to decide rapidly in a such a dynamic business environment.
Clearly, this definition eliminates the waterfall development methodology in running software development projects/products, since with waterfall approach big design is done up front, with all technology and functional decisions being locked into the scope in the beginning of the project.
On the contrary, in Scrum development methodology, the product owner and team are making decisions for short periods of time! Due to the shorter iterations, the team gets feedback regularly, allowing change of direction based in stakeholders’ inputs. When an organization is built based on Agile principles and dynamic portfolio structures, this flexibility aspect in operational level is elevated in higher decision-making layers (portfolio, corporate, etc.), giving them the opportunity to act with wider uncertainty cone, while taking the final decisions when they are ready to do so. By that, substantial competitive advantage is gained, since informed and educated decisions are made in the strategy layers, whereas execution is not left behind or put on hold.
Recognition of situation and adjustment. We generally make decisions that can be divided into 3 broad situation categories: routine operations, novel situations, and crises.
In routine operations, we understand how things work, so we can analyze the situation and choose the best option for action. In these cases, performing that analysis and delaying decisions until the last “responsible moment” makes a lot of sense.
In novel situations on the other hand, we don’t know enough to fully analyze what’s going on. We still need to learn how things work. Such learning requires action, to test the environment and understand the way it responds. So again, it makes sense to delay our final decisions until we know more. But the delay involves active learning rather than analysis.
In crises we’re under immediate threat from something that’s happening around us. We need to act rapidly in order to stabilize the situation, buying time for further analysis and decision-making later. So, action must precede considered decision-making.
Successful organizations are going to be able to recognize these different circumstances and adjust their decision-making strategies accordingly.
Understand the “last responsible moment”. There comes a point when it’s too late to act. The exact point is determined by our ability to execute and by the decision context. Beyond that point our actions are guaranteed to fail. And even before that “last possible moment”, the cost of inaction may start to grow rapidly, as options become more expensive and eventually get closed off.
Successful organizations will develop an understanding regarding the impact of timing on their decisions. When does the value of gathering additional information outweigh the loss of options that comes through delay? When does this balance shift? They’ll manage this timing actively, not solely with a view to accelerating the decision, but also in order to find the right time to decide and begin acting. Not too fast. Not too slow. Decision-makers shall sometimes imitate the stand-up comedians where the timing is crucial!
And now the paradox enters; when a company is built in a way to be able to take decisions late when required, then it is also able to take immediate decisions as well, since there is high confidence that working scenarios or partial decisions can be easily changed in execution effectively!
Author: Kostas Svoukas.