What I Wish I Knew as a CEO That I Learned Later in HR
Why My “5 Around” Group is Important to Me and Why You Should Start One

Guest Post by Dennis Bakke

“The meanest company in America,” Businessweek called Dish Network in a scathing feature last month. What struck me most after reading the article was the description of co-founder Charlie Ergen’s management style as “pounding people into submission.” Former president Michael Neuman resigned after eight months, and Dish lost yet another strong leader. “The hours were long, yes,” the article says, “but it was Ergen’s habit of unilaterally making decisions that most irked Neuman.”

Nothing tells you more about an organization than the way it makes decisions. Do leaders trust team members? Do team members have real responsibility and real control? These questions can be answered by one other one: Who gets to make the decisions?

And nothing affects an organization more than the decisions the people in it make. Great business minds know this. In fact, decision-making is at the heart of all business education. Nearly a hundred years after the case-study method was invented at Harvard, it’s still the foundation of the world’s best business programs. Why? It’s because the case-study method puts top business students in the role of decision-maker. Over the course of a Harvard MBA, students will make decisions on more than 500 cases. Decision-making is simply the best way in the world to develop people. Many years ago, as a student at Harvard Business School, I realized two things: decision-making is the best way to develop people; and that shouldn’t stop at business school.

But outside of business school, few business leaders tap into the value created by putting important decisions in the hands of their people. Instead, “team players” are taught to do what they’re told. This takes the fun out of work, and it robs people of the chance to contribute in a meaningful way. Or, organizations will use a participatory style of decision-making in which recommendations are given to the boss, who then makes the final decision. This approach also fails to fully realize the value of the people in the organization.

This happens in all types of organizations. I see it as a major failure in the Sept. 11 attack against the American diplomatic compound in Benghazi, Libya, for example. It is clear that somewhere the process broke down, allowing for the “grossly inadequate” security that led to the deaths of four Americans.

My question is this: Were the wrong people given the power to make the critical decisions necessary to prevent this attack? Should those closest to the situation—those who were on the ground experiencing the turmoil firsthand—have been empowered to make the ultimate decisions, when they need to make them? I believe so.

Gen. Stanley McChrystal, former commander of U.S. Forces Afghanistan, might agree. He spoke about decision-making in a recent Fast Company feature about what drives the success of some of today’s top organizations. “We had to change our structure, to become a network,” he said. “We were required to react quickly. Instead of decisions being made by people who were more senior—the assumption that senior meant wiser—we found that the wisest decisions were usually made by those closest to the problem.”

Most of us do not face life-and-death decisions each day in our organizations. But, as leaders, we all likely have removed decision-making power from people below us in the hierarchy, people better suited than we are to act in an appropriate and timely manner. We can’t possibly be privy to all the details necessary to make every key decision our organization will face. But we can choose the decision-makers in our organizations.

I believe—based on decades of leading companies—that everyone can make good decisions. And organizations (from Dish Network to the military to my own Fortune 200 Company) are much better for it. You don’t have to be a business owner to start the process; managers at any level can unlock the full potential of the people around them. No matter where you stand in your organization, change can start with you.

In a decision-maker organization:

  • The leader chooses someone to make a key decision.
  • The decision-maker seeks advice (including from the leader) to gather information.
  • The final decision is made not by the leader, but by the chosen decision-maker.

These ideas can affect the bottom line: cutting-edge research indicates that a decision-maker culture improves financial performance. But it’s not just about the numbers. It’s about people: what makes them tick, and what they can achieve when they’re given real responsibility and real freedom. When leaders put real control into the hands of their people, they tap incalculable potential.

 


The Decision MakerDennis Bakke is currently the President and co-founder of Imagine Schools, the US’s largest charter school management company with over 70 schools. He is the author of The Decision Maker: Unlock the Potential of Everyone in Your Organization, One Decision at a Time and the New York Times bestseller Joy at Work: A Revolutionary Approach to Fun on the Job. Bakke previously co-founded and served as the president and CEO of AES, a Fortune 200 global power company. He lives with his wife in Arlington, VA.

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What I Wish I Knew as a CEO That I Learned Later in HR
Why My “5 Around” Group is Important to Me and Why You Should Start One

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