Guided to the Light

Vantage Partners guidelines for designing an effective decision-making process

1. Distinguish among different decision-making roles. Determining who has the responsibility - much less the authority - to make which decisions when managing suppliers is often difficult. Without systematic thought about how decisions will be made and by whom, it is inevitable that some decisions will take too long to make, some will be made without the benefit of important perspectives and will therefore be sub-optimal, and others will upset or alienate certain groups. Clarification of roles and authority early in the process streamlines decision making when multiple business units functions, or geographies need to be involved.

Lack of clarity around decision-making roles internally often leads companies to send mixed messages externally - leaving suppliers to figure out who has accurate information and worse, to work on parallel and conflicting tracks at their customer's expense.

2. Aim to minimize the number of formal decision makers and maximize the degree of efficient consultation. Often companies assume that there is a fundamental trade-off between a highly inclusive but inefficient decision process and one that sacrifices the benefits of inclusiveness for speed. Many corporate sourcing and procurement groups realize that when important stakeholders are left out of decision making, key viewpoints are likely to be excluded, which often results in poor decisions. Moreover, those who feel their voices are not heard are more likely to ignore or undermine the advice and recommendations of corporate sourcing and procurement.

Yet many sourcing and procurement groups fear, very reasonably, that if they attempt to address these concerns by including additional people in decision making, the process will become so unwieldy that important decisions will be delayed or not made at all.

3. Clearly define and balance decision-making rights with responsibilities. Some people assume that the role of a formal decision maker is to approve or veto a recommended course of action. We have all experienced the frustration of working through a long and arduous decision process, only to have our hard work negated by the veto of someone who has not been involved up to that point.

In an effective decision-making process, decision rights come with responsibility and accountability. Individuals who wish to have their opinion taken into account must be available and willing to make their opinions heard. Designated decision makers must put the time and effort into making a good decision, which often requires preparing for and attending meetings and consulting with others for their opinions.