Project Decision-Making

Making good decisions is a critical project management skill. The challenge is to create a fair, efficient, effective, and transparent process for our teams and stakeholders. In a McKinsey survey [1], only 20% of respondents stated their companies excelled in decision-making. The path to the answer is often as important as the solution. Making better decisions requires understanding the organization and establishing context-sensitive processes.

Understand the Culture

Culture drives behavior. Organizations have a culture that influences the project team’s sub-culture. What are these cultures and their attitudes? How do they feel about risk, empowerment, accountability, hierarchy, and control? These attitudes create constraints that are hard to change.

Risk tolerance describes comfort in taking risks. Start-ups generally have a greater risk tolerance than well-established organizations. “Move fast and break things” was Facebook’s motto until 2014. It would be hard to imagine a financial services company or aircraft manufacturer adopting the same view.

Empowerment describes the degree to which people feel they have the authority or power to make decisions. How are decisions generally made? By managers? Teams? Committees?

Psychological safety is the nexus of risk tolerance and empowerment. Are bad decisions punished or treated as learning opportunities? Is it better to play it safe or be bold?

Hierarchy and control can be formally documented through the organization’s policies, or unstated rules and practices. Spending decisions, authorization to deploy, or sign-offs may be defined by corporate policy. Deferring or waiting for “management” to decide is an example of informal control.

Understand the Project Context

Projects support the organization’s mission and goals. Understanding the project’s relative importance informs its decision-making process. Strategic initiatives have higher visibility and require greater leadership engagement than a small maintenance project. Projects with multiple interdependencies will require broad participation and coordination.

Integrate with Stakeholder & Communications Management

Connect the dots between stakeholders, communications, and decisions. Stakeholders are those impacted (or perceived to be impacted) by a project activity, decision, or outcome. Stakeholder management is the ongoing process of identifying, assessing, engaging, and monitoring stakeholders. This includes understanding their concerns, power, interest, influence and desired engagement levels.

Stakeholders are engaged through communications. The communications management plan formalizes the who, what, when, where, and how. The decision-making process will be informed by the following:

Who are the stakeholders that need to be included?
What are their primary concerns? What are they interested in knowing?
When and how should they be included in the process? What is the best way to engage them? What role should they have?
Should they or do they have formal decision-making authority? Do they have informal powers that need to be addressed?

Have a Process

A straightforward, documented process creates transparency and promotes confidence that decisions are made fairly. Stakeholders know what to expect—how and when they will be engaged. An efficient and effective process reduces friction, frustration, and delays.

Decision-making processes need to be tailored and define the steps, participants, roles, and timing. An end-to-end flow may include:

Identification and intake. What is the process for identifying and documenting issues to be resolved and decisions to be made? What tools will be used? Who can submit items?

Analysis and review. Who is responsible for analyzing issues and providing input into decisions? How do we ensure that the “right” people are involved in the process? How is the information documented and communicated to the decision-makers?

Decision-making. How are decisions made? Who is responsible? What are their roles? What are the voting rules?

Escalation. What is the process for escalating or appealing a decision to the next level? What are the appeals criteria?

Documentation and communication. How are decisions and their outcomes documented and communicated? What tools are used to store and reference prior decisions?

Validation. How do we validate that the decision has been implemented? Who is responsible? What are the enforcement mechanisms?

Consistency. How do we review and ensure consistency in our project decisions? Is there consistency with the past? Is there consistency across the program, portfolio, or organization? If a new precedent is being established, how is that communicated?

Cadence. What is the timing of the process? How often does the decision-making body and appellate body meet? What is the expected timeline for a decision to be made?

Decide How to Decide

Decide how decisions will be made. There are many options. The models describe the trade-offs between efficiency and fairness:

Dictatorship is when one person decides. A “dictatorship” has negative connotations but is efficient and commonly used—the team lead, manager, or project manager makes the decision. A delegate authorization model may also be employed where decisions are escalated to higher levels based on the size, impact, complexity, or risk.

Unanimity is fair but inefficient. It may result in no or a sub-optimal solution.

Majority rule is efficient for binary decisions but may lead to the tyranny of the majority [2].

Plurality (selecting the option with the most votes) is efficient when multiple options are presented, but it can also lead to the least preferred option being selected.

Consensus is where most people agree, and no one strongly disagrees. It is generally fair but may not be efficient.

A committee or a tiered committee model may be used for projects with multiple, diverse stakeholders. The voting rules should be formalized in the committee’s charter. Understand how the rules and voting outcome will be perceived. Perverse incentives and unintended consequences can derail the best-laid plans. The tyranny of the majority/minority, lowest common denominator solutions, ramrodding, or blocking strategies may prevail.

Decision support tools can be employed to frame and evaluate options [3]. The weighted selection factors model [4] makes decisions more objective by defining and weighing relevant considerations. Buy-a-Feature [5]allows stakeholders to reveal the strength of their preferences. Weighted-shortest-job-first (WSJF [6]) uses the economics of the cost of delay to prioritize work.

Define the Roles

Defining the roles and the role assignments creates clarity and sets expectations. Stakeholders understand the scope and limitations of their role, their power, and when to engage in the decision-making process.

The required roles may be tailored to fit the effort's scope, scale, and complexity. A Harvard Business Review article [7] described the RAPID model [7], which can provide a sound starting point:

Recommend. People who are responsible for making proposals and have veto power.

Agree. Individuals or organizations that have veto power and must agree.

Perform. Those responsible for implementing or executing the decision.

Input. People who are consulted and provide input.

Decide. The person or group that has the decision-making authority.

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