Lean Six Sigma / Leadership Skills / Change Management / Operational Excellence

Secret sauce for improving processes

Collaboration among all stakeholders is critical for better decision-making.

By Brandon Hamilton, DBA, MBA, MISM, president, Hamilton’s Solutions

When I was in graduate school, I studied how decision-making processes change as companies grow. In those five years, I learned that most of the research on making decisions was related to general management decisions.

Later, when I started consulting in various industries around the world, I came to appreciate how much these executive-level general management decisions affect how asset management professionals, operations managers, purchasing managers, maintenance managers, maintenance supervisors, materials managers, and plant engineers do their work. Regrettably, I have not seen many instances where the process of making executive-level decisions involved these lower-level employees.

Charles Barnard wrote in his famous 1966 paper “Functions of The Executive” that an organization “comes into being when there are persons able to communicate with others who are willing to contribute to actions that accomplish a common purpose.” The important elements of an organization are, therefore (1) communication; (2) willingness to serve; and (3) common purpose.

Following this line of reasoning, decision-making can be viewed as a collection of information-processing activities. Furthermore, when you analyze process decisions, you find patterns. Management teams, therefore, are planning maintenance services and manufacturing strategies based on the processes that model products and services that support market segments.

So, corporate strategy should be developed from collaboration among persons responsible for market analysis, business process design, workflow modeling and teamwork support as well as those involved in process decisions that support operations strategies. The goal would be to create common information structures across these major business functions.

If each manager responsible for a service or maintenance process collaborates with the next stakeholder in the hierarchy, an interconnected network of transactional, operational, decision-making, and executive information systems will emerge and can be constructed into an agile system. This analysis and resulting enterprise system informs executive conversations that govern the design of processes, systems, and procedures that support plant operations.

The president of Alidade MER, Tom Moriarty, wrote a column for Plant Services’ December 2016 issue about measuring and boosting motivation. He referenced the expectancy theory of Victor Vroom of the Yale School of Management. He also referenced Edward Lawler’s bottom-up approach to improving leadership performance. Lawler was one of my professors when I attended the Marshall School of Management at the University of Southern California. His insight was very influential in my approach to management.

I’d like to dig deeper into Moriarty’s column by referencing a situational leadership study conducted by Vroom, Arthur Jago of the University of Missouri, and Richard Yetton, one of Vroom’s graduate students. They studied intercultural behaviors of managers in Austria and the Czech Republic.

They developed a decision-making model based somewhat on a contingency-theory model of management in which decisions are categorized based on levels of participation. Their model is often referred to as the Vroom-Yetton-Jago Decision-Making Model. The decision-making model categorizes participation levels as autocratic, consultative, or group.

The autocratic level is further subdivided based on whether an executive makes decisions using only available information or whether the executive obtains information from subordinates but then comes up with a solution without further subordinate intervention. This decision, made with minimal participation, is clearly biased. The executive may not even tell the subordinates the purpose of their questions. The subordinates do not play a role in defining the problem or generating solutions. 

The consultative level can also be divided between those decisions where the executive shares the problem with subordinates individually and those where the executive shares the problems with subordinates in a group meeting. In both situations, the final decision may or may not reflect subordinates’ influences.

Shortly after this model was developed in 1973, Yetton suggested another group scenario in which the executive shares the problem with the subordinates as a group and together they reach consensus on a solution (Vroom, Yetton, 1973; Reber, Auer-Rizzi, 2004).

In my consulting practice, I have seen where lessons learned from collaborative decision analysis can be codified in enterprise database systems. These systems and other decision support systems specialized for marketing, materials management, production management, financial management, and engineering can be mined for real-time access to transactional data for tactical and strategic planning.

In Edward Lawler tradition, this bottom-up approach evolves from data gathered from transactional processes to information about operations and knowledge supporting better decision-making processes. The resulting learning infrastructure built on collaborative situational decision analysis creates strategically appropriate organizational structures.

Even if management must frequently resort to autocratic decision-making, a clarity of perspectives can be framed such that the executives can be confident that a performances-based organizational culture and the executive information system used to support executive-level decisions are constantly evolving as organizational architectures built on stakeholder behaviors.