Problem Solving in a Complex Organization Requires Two-Way Communication
Many of us work in organizations that require multiple points of communication
Successful relationships in complex organizations must begin with:
- Common understanding of goals
- Clear understanding of individual roles
- Commitment to accomplishment of objectives
The key to a successful relationship is effective two-way communication. One-way communication takes considerably less time; however, two-way communication is considerably more accurate.
As a speaker in the communication process, make your message as clear as possible. Avoid overgeneralizations or excessively firm statements – this might force a defensive response from your listener. Don’t threaten your listener(s) by using unknown jargon or fifty dollar words. Check for understanding from your listeners. Our words are always subject to misinterpretation, watch for indicators (verbal and nonverbal) of misinterpretation and respond to them. Ask for feedback on clarity. Restate and summarize when needed.
As the receiver of a message listen carefully to the person speaking. That sounds simple, but it takes a lot of effort to listen well. Demonstrate that you value others’ opinions by not interrupting or responding prematurely. Never jump to conclusions before you have all the facts. Listen and ask questions! As you are listening, be careful to distinguish facts from opinions. Paraphrase the message back to the speaker to check for clarity when necessary.
The effectiveness of an organization is in large part dependent on the effectiveness of communication within the organization; lateral communication and vertical communication increase the need for accurate and open communication. Good communication skills require attention and practice. We need to continually work on and hone these skills.
The characteristic elements of relationships in complex organizations are:
- Multiple points of input and direction
- Shared responsibilities / ownership
- Increased participation
- Decision making by peers
- Organizational lateral information flow
- Minimal hierarchy congestion
- Coordination of people with relevant, timely knowledge
- Vertical and lateral processes and decision making input
Of these characteristics, probably the two most critical are: two or more bosses (dual reporting) and decision making by peers.
Two or More Bosses
Although business organizations have traditionally evolved as one-boss hierarchies, we are all familiar with dual reporting relationships. The most common example of dual reporting is the family structure: we all had a mother and a father. As children we were responsible to both of them, and they both had authority over us. Conflicts a child may encounter are rarely due to the existence of a second parent. In fact, one parent often helps ease the difficulties a child might encounter with the other parent.
Decision Making in Matrices
The second critical characteristic of complex organizations is decision making by peers. Decisions are made every day. They may range from fairly simple decisions, such as what to eat for lunch to as complex a decision as where to put the next manufacturing plant.
In traditional hierarchies, a clearly defined chain of command dictates that a certain kind of decision can be made by a person occupying a certain position in the organization chart. In a complex organization, however, this is no longer true. Decision making is moved down to where information is generated and authority to make decisions exists. Moving decision making down in the organization allows for decisions to be made by a mix of people with knowledge power (power derived from intimate familiarity with the technology of the day) and people with position power (power attained from years of experience with the organization). In an information industry where success depends on what we know, the inclusion of knowledge-power people in the decision-making process is crucial.
The increase in the number of decisions made at lower levels in an organization increases the organization’s dependence on the quality of decisions made. The decision-making process we use, therefore, is critical. Understanding of the process is essential to making timely, effective decisions.
Here is an example of a 7-step methodology to help the team decision-making process work effectively in complex organization.
1. Build the team to define the problem and set the objectives.
Generally, the decision-making process starts with some information or data that a problem exists. The first step is to put together a team to examine the problem indicators in order to get a clear definition of the issues. This problem-definition team should include a mix of the people who are closest to the situations, who know the most about it and the “owners” of the problem. This team will not necessarily include the “solvers” of the problem during this step.
It is imperative that the real problem(s) be clearly defined. Too often we find ourselves working on solutions to the symptoms of problems, not the real problem. In defining the problem, ask a lot of “who, what and when” type of questions. For example: What are the symptoms? Where does the problem occur? What departments are involved? What shifts? What influence, if any, does time of day, day of the week, etc., have on the problem?
Now is not the time to ask “why.” Why implies cause and solution issues. Remember, this is the problem definition step. Never jump to solutions until the problem(s) are clearly identified. Once the problem is clear, the team must establish commonly agreed-on objectives. In other words, what are you trying to get done? Well thought-out objectives will not only help you define the problem, but will help you decide whether it is a problem worth solving. It is important to start with objectives, so you know where you are going and have some basis with which to measure the decision. Your objectives will become the focus of all discussions, data gathering and related considerations from this point on.
Objectives should be written in terms of the specific goal(s) to be reached. (E.g., the purpose of this decision is….). Supplement objectives with realistic milestones. That is, the things that must be completed to accomplish the objective(s). Often a decision is not reached because clear milestones and deadlines have not been set.
2. Build the team to solve the problem.
Once the problem has been clearly defined and the objectives and milestones set, the emphasis of the team players shift to making the decisions which will solve the problem.
The problem-solving team may or may not be the same team that worked on problem definition. Clarity of the problem may indicate that different team members with different expertise and authority are needed for solving the problem. Decisions should be made at the lowest competent level. This means that the team should include a mix of technical expertise (knowledge-power people) and members capable of implementing the decision (position-power people).
This team should be kept small but it is essential that all pertinent areas are represented. For example, the team for a decision about a product shipment should include representation from manufacturing, engineering and marketing. The team for a feature decision on a processor should include chip designers, architects and marketing personnel.
3. Define the causes and alternative solutions to the problem.
The goal of this step is to identify the true cause(s) of the problem. Causes of a problem, unlike symptoms, are seldom readily apparent. Start this step by hypothesizing possible causes of the problem. To do this you need to analyze all the tangible evidence that is available. Occasionally it will be necessary to collect additional data during this step.
Now is the time to start asking “why”. For example, why has the reject rate risen to 30 percent? Or, why is the current hardware no longer able to process information that the development group is generating.
Once the causes of the problem are identified, the team should generate alternative solutions. Alternatives need to be stated as clearly as possible. Each alternative should be accurately described so there can be no misunderstanding as to the possibilities from which you are making your selection. As a team, discuss the alternatives looking at the advantages, disadvantages, costs and expected results of each. Narrow the list of alternatives down to the two or three most viable solutions.
It is has not been done already, the team should also establish the criterion (or criteria) that must be met by the solution. You can’t recognize the best solution without some “ideal” to compare it against. Establishing criteria is a natural extension of the objective(s) set in Step 1. For example, if money is an objective, specify the monetary cost target. If quality control is an objective, specify the acceptable error rate target.
Generally, some criteria are more important than others. And, some will be absolute in their importance. Look at your list of criteria and identify any which are “musts” – the ones that cannot be compromised in any way. Once you have identified all the musts, prioritize any remaining criteria in order of their relative importance.
At all times in the decision-making process, open discussion should be encouraged. All facts, opinions and points of view should be heard in an atmosphere of openness and candor. All team members need to participate in proposing and evaluating suggestions. Each member serves as a sounding board for others’ ideas.
4. Gain commitment to the decision process.
Before the decision is actually made be sure all team members are committed to the decision-making process. This is critical. Each member of the team must agree to support whatever decision is reached. Agree to disagree and commit - agreement with the decision is not necessary, but commitment to back the decision is a must! Avoid “lipotage” – the act of giving lip service to an agreement and then sabotaging it later. It is what happens when people say they commit and only keep that commitment until they are out of the door.
Why people don’t commit or renege after seeming to commit:
- Perception of dishonorable intent
- Perception of unfairness
- Perception of a sham
- Perception of stupidity
- Perception of being powerless
Some suggestions to make sure you never commit lipotage again:
- Set ground rules for disagreement
- Create a signal
- Get in the habit of disagreeing – have courage!
- Practice positive cantankerousness
- Take a risk a day
- Express your feelings off-line
5. Make decision and obtain ratification when required.
Now is the time to make the decision. By now you have developed some viable alternative solutions and a detailed list of criteria. You have also identified which criteria are musts and which allow some flexibility. Now you need to combine all of these elements to determine how good the alternatives are. They must be evaluated against the criteria and against one another.
Apply the criteria established in Step 3 to each alternative solution. Look first at your “must” criteria. Any solutions which don’t meet these can be eliminated immediately. Look at both the positive and negative consequences of each solution in terms of the team objective. Also consider the future consequence each solution might have. Ask: What trouble might it create? Who else would it affect? What effect will it have on other activities? What opportunities might it open up?
Once the pros and cons of each viable solution have been analyzed, choose the alternative which best fits the need. Remember, consensus (agreement on an alternative whether or not all parties to the decision prefer it) must be reached on all decisions made. Ratification of the decision must be obtained when the team doesn’t have the power of implementation of the decision.
6. Prepare, communicate and execute implementation plan.
Prepare an implementation plan. List the action steps that need to be taken to implement the solution and identify responsibilities and completion dates for each. Be sure that everyone involved or affected by the decision has not only been informed of the decision, but has had an opportunity to discuss the decision and its implementation with you. Clear communication is vital.
The implementation plan should also specify how to evaluate the success of the solution. Go back to the objectives generated in Step 1 and the criteria established in Step 3. These will point to the appropriate evaluation mechanisms. If you have established criteria such as a monetary goal or a reject rate percentage goal, be sure you have a way to collect the data necessary to determine if you have met those goals.
Don’t reopen debate or overturn a decision without good reason. However, don’t be inflexible. If a decision is failing to gain the support necessary for implementation, maybe it was the wrong decision. Don’t be afraid to revisit, but be sure there is significant new data which indicates the need.
7. Review progress and abolish team when the objective(s) is accomplished.
The importance of this follow-up step cannot be stressed enough. Always check the results of the evaluation set up in Step 6 to determine if the problem has already been solved. If the results show the problem still exists, you probably need to go back to Step 1 and redefine the problem. If, however, the implemented solution is achieving the desired results, check to see if the team needs to continue. If you have accomplished the objectives, abolish the team.
Identify your path to CFO success by taking our CFO Readiness Assessmentᵀᴹ.
For the most up to date and relevant accounting, finance, treasury and leadership headlines all in one place subscribe to The Balanced Digest.
Follow us on Linkedin!