I believe it is increasingly important, no matter what the size and complexity of your organization is, to have a defined decision-making process. Having been a leader of extensive global and regional underwriting and marketing business units that require many fast and accurate decisions, my teams had no choice but to establish formal decision-making roles and responsibilities. In retrospect, while these written authorities provided some clarity, they were fairly one dimensional, written “lines of authority”. To support these basic decision-making rules required constant interaction and an enormous amount of communication.
Executing a strategic plan successfully depends upon the success or failure of the actual people executing the plan to make good decisions. It stands to reason that if you can improve your team’s decision-making abilities then plan execution and results should also improve along the way. The RAPID[1] Decision Making Model goes a few steps further than what I call “written lines of authority” and is an easy but effective way to instill professional decision making within an organization.
According to a Bain and Company Study[2], the average organization has the potential to more than double its ability to make and execute key decisions. On a decision-effectiveness scale of 0 to 100, the best companies score an average of 71, while most companies score only a 28, according to Marcia W. Blenko, Michael C. Mankins, and Paul Rogers, authors of Decide & Deliver: 5 Steps to Breakthrough Performance in Your Organization.
Quick Summary of RAPID
- RAPID was developed by Paul Rogers and Marcia Blenko – two Bain & Company Consultants. Their article: “Who has the D? How clear decision roles enhance organizational performance” which appeared in the January 2006 Harvard Business Review and has since become one of HBRs “10 must reads”.
- The Acronym RAPID describes the various roles and responsibilities for clear decision making within an organization. With respect to critical decisions, it ultimately shows how power flows through an organization and/or business unit.
- The objective with this approach is to create a more formalized, participatory approach towards decision-making process within an organization. It is also useful as a “post mortem” tool to diagnose failed decisions – to see what element or elements in the RAPID process was/were lacking or missing so the next time a critical decision has to be made so you are not repeating the same mistakes over and over again.
- Implementing RAPID can be messy; it can reveal a convoluted and faulty decision-making process so there must be a full commitment to “check egos at the door” and accept the need for adopting RAPID as part of an organizational improvement initiative. If your organization is in flux, it may not be the appropriate time to implement RAPID.
- The web site http://www.decide-deliver.com designed by Rogers and Blenko can help you assess your decision making prowess and also, do the same type of assessment of your organization. Like the “5 Step Organizational Improvement program” simulator at www.simulator-orgeffectiveness.com that I featured in my blog post on organizational effectiveness, this tool is based upon thousands of quizzes taken and stored in their database over a 10 year period.
- One of the pitfalls of this approach can be that it actually slows decision-making down. Therefore, at the outset of a project it is recommended that you decide which projects will follow RAPID and which ones will not.
Here is What R.A.P.I.D. Stands For:
Recommend:
- Making a proposal on a key decision, gathering input, and providing data and analysis to make a sensible choice, in a timely fashion.
- Consulting with input providers – hearing and incorporating their views, and winning their buy-in.
Agree:
- Negotiating a modified proposal with the one who recommends if they have changes or concerns to the original proposal.
- Escalating unresolved differences and issues to the decider if A and R cannot resolve their differences.
- If necessary, exercising veto power over the recommendation.
Perform:
- Executing a decision once it’s made.
- Seeing that the decision is implemented properly and effectively.
Input:
- Providing relevant facts to the one who recommends that shed light on the proposal’s feasibility and practical implications.
Decide:
- Serving as the single point of accountability.
- Bringing the decision to closure by resolving any impasse in the decision-making process.
- Committing the organization to implementing the decision.
Characteristics of High Performance Companies That Use RAPID
High-Performing organizations make good decisions quickly. Some of the characteristics they exhibit are:
- For complex issues that require rapid decision making, achieving the right mix of control and creative freedom is critical for sustainable success. [3]
- A list of critical decisions in priority order must be part of the Strategic planning process. Determining which ones will follow the RAPID process is also required.
- Decisions that build value are most important and thus, have the highest priority on such a list.
- Action is the Goal.
- Ambiguity is the enemy.
- Speed and adaptability are key.
- Decision roles trump the organizational chart.
- A well-aligned organization reinforces roles and responsibilities.
- Practicing beats preaching. That being said, a communication plan needs to dovetail with the RAPID process.
- Remember the Rule of 7: Once you’ve got 7 people in a decision-making group, each additional member reduces decision effectiveness by 10%, according to Marcia W. Blenko, Michael C. Mankins, and Paul Rogers, authors of Decide & Deliver: 5 Steps to Breakthrough Performance in Your Organization. Thus, a group of 17 or more rarely makes any decisions.[4]
- Managers spend 50% or more of their time in meetings, but Bain & Company research shows that two-thirds of meetings end before participants can make important decisions. Not surprisingly, 85% of executives are dissatisfied with the efficiency and effectiveness of their companies’ meetings, according to Marcia W. Blenko, Michael C. Mankins, and Paul Rogers, authors of Decide & Deliver: 5 Steps to Breakthrough Performance in Your Organization. [5]
For More information on This Topic:
See the January 2006 Harvard Business Review article, “Who has the D?” by Paul Rogers and Marcia Blenko. Reprint #R0601D. You can download this article from the Bain.com Website at http://www.bain.com.
Also, download the article: “Decision Insights: What are Your Critical Decisions?”
The web site http://www.decide-deliver.com designed by Rogers and Blenko can help you assess your decision making prowess and also, the same of your organization and is based upon thousands of quizzes taken and stored in their database over a 10 year period.
See Deepak Chopra’s article: http://www.linkedin.com/today/post/article/20130913234937-75054000-the-secret-to-making-good-decisions?trk=mp-details-rr-rmpost
Decide & Deliver – The Book That Covers The Subject Matter in Detail
You can purchase the book by Marcia W. Blenko, Michael C. Mankins, and Paul Rogers, authors of Decide & Deliver: 5 Steps to Breakthrough Performance in Your Organization. at Amazon.com and other quality book stores.
See also this Harvard Business Review article entitled: The Big Idea: Before You Make That Big Decision…
Reprint #: R1106B
by Daniel Kahneman , Dan Lovallo , and Olivier Sibony
http://hbr.org/2011/06/the-big-idea-before-you-make-that-big-decision/ar/1
[1] RAPID is a registered service mark of Bain & Company, Inc.
[2] Harvard Business Publishing: The Daily Stat 10/12/2010 Bain and Company by Bain’s Global Organization practice. See their website at http://www.bain.com
[3] Institute For The Future: Rapid Decision Making for Complex Issues, August 2005, by Andrea Saveri and Howard Rheingold. See their web site at http://www.iftf.org.
[4] Harvard Business Publishing: The Daily Stat 9/28/2010 by Bain’s Global Organization practice
[5] Harvard Business Publishing: The Daily Stat 10/5/2010 by Bain’s Global Organization practice
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- Business agility, fighter pilot style (gigaom.com)
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- Right or Wrong Decision?….. (stephenetlim.wordpress.com)
The Savvy Strategist (tm) 
Bill, terrific content. Thanks for organizing and sharing. My professional experience affirms the concepts as well. I like to characterize it as ‘nimbility’ or the ability of an enterprise to be nimble.
Curious..
With your deep experience in the insurance sector, as well as other readers, what might be the Top 2-3 things that would hinder the adoption of RAPID within insurance companies and agencies?
And is it necessary to overcome these top barriers?
What’s at stake?
IMHO:
1. Too many layers, too much middle mgmt.
2. Inability to “check ego at the door” and change.
3. Too many regulators and lawyers looking to either make a name for themselves or make money off errors – or both.
What to do?
1. Thin out the layers. Outsource. Crowdsource.
2. Compensate Decision Makers in such a way as to incent them to leave ego’s at the door.
3. Tort reform and dramatically roll back government oversight and DOI staffing.
If the insurance organization doesn’t increase its nimbility score, it will eventually become paralyzed by the velocity of change and will be taken over for its block of business.
My take. But I’m often an idiot!
Barriers exist in most corporate settings with every complex decision you have to make. So, the key is to be able to anticipate what these may be and make this part of the RAPID process.
Interesting concept, but implies a non-pathological process that may even resemble democracy. Never saw that in US corporate life.
I still think the structure is basically non-democratic in nature. The biggest obstacle I still see is the ability of senior management to ‘check the egos at the door’. The decision making tree is still too closely aligned to the org chart, and a tough sell to move it off that basis. There is still too much emphasis on ‘protecting one’s silo’ and not working for the best decision for the company, not your unit.
I agree, RAPID is a democratic process. From a practical standpoint, many companies still have silo warlords and dictators running the business units where RAPID will end up in the proverbial dustbin as “another failed flavor of the month”.
I believe that Autocratic mode of management is sometimes needed in the organization where the RAPID model is applicable, because some of the decisions needs urgency where the democracy methodology i.e. calling a meeting and taking suggestions for the issue is not possible. Model is very much common to see in IndoPak Organizations.