Delegating Decision-Making

My dad (one of my main CEO/entrepreneur role models) and I team-teach a business school class in entrepreneurial leadership every year at USD where a friend of his is the professor.  Sometimes I go in person, usually I just do it by video.  We did this a few weeks ago, and my dad talked through a decision-making framework that I’d never heard him mention before.

I sketched it out and really like it and am already using it internally, so I thought I would share it here as well:

To walk through it, delegating decision-making to someone on your team can be as simple as understanding where a decision falls along two different spectrums.  On the vertical axis is “How familiar is the person with this type of decision?” – meaning, has the person seen and made this kind of decision before?  This could be something like firing an employee, signing a contract, negotiating a vendor agreement.  On the horizontal axis is “What are the consequences of getting the decision wrong?” – which is really self explanatory…how big a deal is this?

The primary, upper right quadrant of “The person has made this decision before, and it’s not a huge deal” is an easy one – delegate the decision-making authority.  The two middle quadrants of “big deal, but familiar with the decision” and “never seen this before, but not a big deal” are ripe for the old adage of ask forgiveness later, not permission first, meaning it’s ok to delegate decision-making authority, but hold the person accountable for letting you know about decisions like that so you can be on the lookout for potential required clean-up.

But what I love most is the way my dad framed the final quadrant (lower left here), which is “high stakes decision, never seen this situation before.”  It can be tempting for a senior manager or CEO to just take this quadrant over and remove decision-making authority from a team member.  But it’s also a perfect teaching/coaching moment.  So the rule of thumb for this quadrant is “make the decision with me, but please come to me with a proposal on it.”

And that’s why my dad is such a great business mentor!