How to Define Decision Making Roles for Your Team

By Matthew G.,
business.com writer
|
Apr 05, 2020
Image Credit: Creative Credit/Getty Images

Figuring out who on your team should be put in decision making roles is an important growth step.

Decision making is a crucial tool for all business owners and entrepreneurs. It's what drives a business forward and having an ability to make decisions is the key to taking a vision and executing on it. Small businesses rely heavily on decision making as any one move can have a substantial impact.

Small businesses are constantly trying to avoid pitfalls and other challenges that come with growing and maintaining a business. All business owners have the desire to have the best tools available to make better decisions. It's become common for businesses to invest in data and analytics as the proper tool to make smarter decisions.

There's been a ton of written material on how decision-makers can improve their craft. An aspect of decision making that doesn't usually make the top of google searches nor is it a flashy term like "big data" is the definition of decision making roles. What does it mean to have decisions making roles? Are we talking about managers and how many your business should have? Not necessarily, as all businesses are not the same and in some cases, the decision making roles may not apply when you're a two-person startup. But what happens when you add a third or 20th staff member?

The ability to make all decisions as the CEO or the business owner becomes more challenging with each new growth step a company goes through. Assigning responsibility and decision making to key cogs of your team an inevitable part of scaling and growing. The vision a business owner has will require execution from the management team built around the business.

Any team that doesn’t have a certain amount of self-governing and autonomy to help build an organization, is a team that’s been built to fail. As a small business, it is extremely important to understand who in your organization or team should have a say in certain decision-making tasks. Knowing the strengths of your staff on an individual and group basis will allow you to determine who should play what decision roles in your business. There are many places where to start but ideally, you should focus first on the top. Every business needs the ultimate driver of decisions. That will most likely fall on the CEO or business owner.

Define

This first assignment, of the ultimate decision-maker, may sound like a very obvious first step. The reason we highlight this is because it is 100% the most important role. A company without a key and final decision maker will leave a company much like a rudderless boat lost out at sea.

There are many situations where a business, especially startups, may have multiple founders working to build something. In the process of starting up, roles get defined on the operational and sales portions of the business. All these fancy titles get thrown out and a five man team ends up with two or three people that could theoretically be considered the final decision-maker.

There are many benefits of groupthink and having multiple views on how to run a business. Having a group make all final decisions is arduous and can take up more time than is necessary, as everyone in the decision-making group needs to be heard. For startups and small businesses, the ability to be nimble and move quickly is one of its biggest strengths. The ability to act and move quickly is directly tied to the time it takes to make decisions.

Delegate 

Some of you reading this may say, "Well I'm the business owner and I’m really the only one making decisions in my business." Part of you defining your role at the top is to also find decision making roles you shouldn't be focused on.

As your business grows, there will be (as with any business), tasks and decisions that will take up more and more of your time. Frankly, some of these responsibilities may not be best served to have a CEO or business owner work on.

Making decisions has been scientifically proved to drain us emotionally, mentally and physically. It is why often you'll hear people made great decisions early in the day when it came to their diet, but had fast food for dinner. Our ability to make great decisions drops as the day goes on.

Defining decision making roles for items and parts of your business that someone should be handling will allow you (the final decision maker) to make better overall decisions, have more time for impactful decisions, and declutter your everyday.

Trust

Assigning roles is something that at SMB Compass we went through as our company began to scale. Our small business financing group was experiencing a bottleneck as decisions on how to work with our clients needed to be determined up top. Once we became aware of this bottleneck, we decided to split up our group into three main groups that had their own autonomy.

Our Invoice Financing, Invoice Factoring, and Inventory Financing groups were created to allow decision making to occur within each group and not at the top. The trust we put on our team to know how to handle their specific groups led to better ownership of leads and a process that in turn lead to a better overall customer experience. We were able to fully remove the bottleneck we were experiencing.

In a business, there are multiple opportunities to turn the above example of a bottleneck, or friction into an opportunity to turn your business into a more productive and efficient machine. Imagine an example of how not having properly define decision making roles can impact a business. In this example, you've got your head of sales working a potential client and there's a large sale pending. Because of how you're business is structured, you're responsible for signing off on sales larger than $100,000 because you want to make sure you can complete the order.

Your head of sales, le'’s call him Charlie, is waiting for your response while you're at a conference talking to important supply partners. In the time window where he’s waiting on your signoff, which could be a few minutes or an hour, many inopportune things can happen to that pending sale.

During this time frame in response, your company loses on the sale as Charlie's competitor at another company signed off and is already working on paperwork. Losing this sale could have been avoided with a simple tweak in your decision making roles. Had Charlie been trusted and given the tools to make this decision, this business could have made a $100,000 sale.

So how do you identify and in some cases foresee where you will have the need for new or redefined decision-making rules? That will depend on many factors including the size of your business, the type of business and how strong of a team you have around you.

Since there are a ton of different sizes and types of businesses, let's focus on the team aspect. The team you'll be trusting with making key decisions needs to clearly be solid and reliable. If you currently do not have a team you feel you can rely on, no matter how hard you work, and how much you put into the business, it will never scale as efficiently and exponentially as possible.

This is why if you need to make sure you're building the right group of people for your business. The number of team members may vary but in general, we're talking about more than three members. These key roles should be set up to take on decisions on their own depending on, what their roles/responsibilities are within the business.

In our case when we split up decision making between our invoice financing and our other financing groups, we specifically chose team members that had the most experience with each financing product as the decision-makers.

In other aspects of business, the roles of making decisions can be based on who’s in charge of ordering the office's snacks and coffee. Some have better taste than others, make sure the person making this decision has the talent for it.

I am trusted business financing consultant with $150 Million+ in direct lending experience across SBA, asset-based keeping my clients away from the noise and in front of exclusive business financing options catered to you. While i'm not in the office I enjoy spending most of my time with family and close friends. Whether it be on the beach surfing, or in the mountains skiing, my favorite thing to do is to just be outdoors.
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