For a while now, we’ve had a feeling that decision-making in business has changed – that it has become more complex. This is partly down to Raconteur’s own experiences with the growing complexity of decision-making. Functions that didn’t even exist in our organisation a few years ago have become central to the choices we make, from the data and operations departments to the creative and people teams.

But it’s also because our clients, totalling more than 500 B2B brands a year, have been reporting a similar situation in their own businesses. They’re finding it harder to understand and predict how their customers make purchasing decisions. This makes it much more difficult for them to execute effective marketing campaigns aimed at those customers.

When you think about it, this makes sense. While technology has unquestionably advanced the business world, it’s also fundamentally changed the power dynamic. Fifteen years ago, few of us saw data as a strategic asset, so data teams weren’t central to decision-making. Cybersecurity was less of a concern, so security teams, if they even existed, were more peripheral. And there were fewer regulations to keep on top of, so legal and compliance teams were less involved. 

There is also the problem that fewer leaders want to be held accountable – if a decision goes wrong, the impact is more keenly felt. In such a connected world, where bad news spreads like wildfire and every choice can be scrutinised by millions, people are understandably wary of putting their neck on the line.

The result? Decision-making chaos. At least, that was our hypothesis.

It is no longer a few senior individuals making the decisions; it’s a complex buying matrix comprising cross-functional executives at varying levels of seniority

But our hunch was that it wasn’t only the increasing size of decision-making groups that was creating complexity. To us, it seemed that interdepartmental influence was also growing, with functions getting involved in areas beyond what might be considered their direct scope. And that it was no longer the most senior person in the room playing the main role in decision-making. People at all levels were playing an important part in the process.

So we set out to discover what is really happening in companies across the UK. To do that, we surveyed 1,100 senior business people across key functions including finance, operations, marketing, sales and HR. We then spoke with analysts, academics and those involved in the B2B buying process to learn about their experiences and understand how decisions are being made.

The results are fascinating and have significant implications for business leaders themselves, as well as the B2B brands trying to reach and influence them. It is no longer a few senior individuals making the decisions; it’s a complex buying matrix comprising cross-functional executives at varying levels of seniority. Decision-making is more egalitarian but also more prone to being impeded by undefined lines of accountability and competing needs.

What does all this mean? The idea that targeting the most senior person and expecting this to result in a sale is outdated. The data shows that businesses need to influence a wide array of functions, not just those that might contain the obvious user. For us, it also poses the question as to whether traditional business media that serves only one department or seniority level is outdated.

While there may be increased complexity, there is also an opportunity for brands that understand the interconnected nature of business to plan their marketing and sales campaigns accordingly – and so steal a march on the competition.

“It has long been recognised that industrial buying is a complex process.” So long, in fact, that that is the first line of an article published in 1978.

That complexity, however, has snowballed in recent years. We used to talk about the buying centre: a small, dedicated team of senior people who would review potential purchases and make a choice. Today, that term no longer captures the levels of collaboration involved in buying in B2B organisations. Deciding what technology and services to purchase now involves a web of stakeholders across multiple roles and functions – what we might call a buying matrix.

New research by Raconteur shows that the average number of stakeholders contributing to a purchase decision is 11.4. That’s up significantly from 2016, when research by US consultancy CEB found that an average of 6.8 people were involved, itself an increase from 5.4 in 2014. 

In Raconteur’s survey of 1,100 senior decision-makers in UK businesses with more than 250 employees, 41% say between six and 10 people are involved in the average purchase. Almost a third (32%) say it is 11 to 15, while a fifth (21%) think more than 16 people join in. Just 6% of those surveyed say it is five or fewer. 

Those figures remain consistent across all seniorities, suggesting that complexity is increasing for decisions of all sizes. In the C-suite, 16% of those surveyed say that more than 16 people are involved, compared with 24% of directors, 17% of department heads and 26% of managers.

The research has also found that a wider range of functions are getting involved in decisions. Most departments have decision-making power over four or more products and services. Finance, IT, operations, marketing and sales wield influence over decisions far beyond what would be deemed their core areas of expertise. 

For instance, 55% of all respondents say the sales team is regularly involved in the decision-making process, while 78% of marketing leaders say they are involved in decisions concerning business intelligence software. Almost half (49%) of respondents in IT significantly contribute to decisions on outsourced services, and 76% of those in operations are at least consulted on marketing and communications services.

More complex businesses

David Clemente, research director in C-suite technology buying at IDC, isn’t surprised that the net is widening. “Some of the questions that are asked in the technology investment process tend to expand across the organisation and bring more people in. They rarely contract,” he notes.

In particular, digital transformation means technology platforms touch far more of the average business than ever before. Whereas a specific product might have been used by only one function a decade ago, today's business tech forms an enterprise-wide web of interconnected tools. 

The cost of getting a decision wrong can be career-ending, so there’s an incentive to disperse the decision-making

Buying a new product might mean training people right across the business or integrating multiple existing systems. Clemente says: “Whether it’s enterprise resource management or a cloud migration, if it’s something that a lot of the different functions are going to use, or it will impact them in some way, usually they’ll have something to say about it.”

Riccardo Drentin, partner at McKinsey & Company, thinks the trend has been underway for decades, with buying complexity following a “hockey-stick” curve.

“In the 1980s, procurement was just about sending out an order and getting the products that you wanted,” he says. “By the 1990s, there was an evolution under way and procurement started to be a function, with more process and more alignment with internal stakeholders. Then in the early 2000s, digitisation started to take place, leading to more complexity. That saw a stable [increase] year on year until the Covid-19 pandemic.”

Managing growing risks

That increased interconnectivity means the risk of adding any new technology is magnified. “If something doesn’t go as planned, it ripples across the business, both more broadly but also faster,” says Clemente. “For a large organisation that’s bought into one or two public cloud services, if there’s a disruption you’ll know about it within minutes because it propagates so fast.”

He thinks that is a major factor in why leaders are collaborating more on purchase decisions. “The cost of getting it wrong can be career-ending. So there’s an incentive to disperse the decision-making so that no one person can be held responsible.”

The changing business landscape is also fanning the flames. Following the 2008 financial crisis, many sectors have seen their compliance load increase, particularly when it comes to data protection and anti-money-laundering regulations. That increases the importance of input from legal and IT teams, for example.

More recently, inflation and soaring energy prices are piling pressure on departmental budgets. The British economy is now in recession, according to the Bank of England, and is forecast to remain in decline until 2024. Fewer than a fifth of European CEOs expect the outlook to improve in the short term.

In this climate, having a tight grip on procurement is becoming a “matter of survival” for leaders, says Drentin. Many companies have already saved what they can by passing on costs to customers, but in some fields they have now hit that ceiling and inflation will start to eat into profits.

“At the moment, your risk is that your budget will skyrocket,” he adds. “Functions like sales and marketing that have never been historically very deeply involved in sourcing strategies are now asking questions and looking for transparency.”

The pros and cons of complexity

Is this growing complexity a good or bad thing for leaders? “I think it’s human curiosity to step into a territory that is not their own,” says Drentin, who cautions that it could be going too far. “Rather than being constructive, it is sometimes creating even more work and making everything more complicated. Some procurement leaders have told me they spend five times longer in internal meetings than they used to.”

Dr Yetunde Anibaba, a decision-making expert at Lagos Business School, says involving more people in a purchase decision can provide a vital diversity of perspectives. But she warns: “If the team is not properly constituted, it’s not going to make a difference. More people should get involved only to the extent that they add value to the process.”

But the leaders Raconteur surveyed have a more rosy outlook. More than eight in 10 (85%) agree that they valued regular communication, insights and updates from the different functions in their organisation when they make a decision. And 83% say they would benefit from even more visibility and understanding across the business.

That’s a good thing, because none of the experts thinks the trend will reverse any time soon. Collaborative, cross-functional decision-making, it appears, is here to stay.

There is an art to decision-making, but few organisations can claim to be masters of it. A recent survey of corporate decision-makers by McKinsey has found that only 20% feel that their companies excel in this respect. Why do so many find it so difficult?

Giorgia Prestento has helped several multinational businesses to improve their procurement decision-making. The founder and director of advisory firm Optimal Decisions believes that a lack of structure is typically the main source of their problems.

“I’ve worked with companies in the process of purchasing big IT systems. They were slow to make decisions, no one was sure who could make the ultimate call and the group dynamics weren’t good,” she says. “If you have a proper structure in place – and if you really understand what you want to buy, what it means for the business and what the user experience will be like – you’ll be in a much better position to make a confident decision that should lead to better outcomes.”

Prestento, who has an MSc in behavioural science from the London School of Economics, suggests a five-point structure: clearly define what you want to buy and who should be involved; collect data; come up with a range of options; agree on a shortlist; and select the best option from these.

Voting has a tendency to polarise. You want a solution that makes everyone feel invested

Further complicating the process is the number of people who typically get involved. According to a survey of 1,100 business leaders by Raconteur, an average of 11 people in a company will have some say in a decision concerning a key purchase such as a new customer relationship management system.

Having several people in the room can be useful, according to Randall Peterson, professor of organisational behaviour and academic director of London Business School’s Leadership Institute.

“Listening to the views of as many people as possible is important,” he says. “Once people have had a chance to voice an opinion, they’ll typically commit to the outcome even if it goes against their preferences.”

Structuring the decision-making group

But Peterson, who has studied the effects of groupthink, adds that the ideal number of people around the decision-making table is between four and six. Each person should also have a clearly defined role. 

Erika Eliasson-Norris, a leadership adviser and founder-CEO of the Beyond Governance consultancy, suggests that there are three essential roles. These are: the budget-holder, who understands the buying department’s requirements and sets the maximum it can spend; the purchaser, who will go out and find the best deals; and the due-diligence specialist (usually someone from the accounts payable team) who can run checks on the shortlisted suppliers.

“That person should be responsible for ensuring the quality of the provider you’re procuring from, because reputations are always intertwined with such deals,” she says.

Having this basic committee structure in place should make it easier to bring in more people, which is often appropriate when the decision concerns a particularly significant change – an acquisition, for instance.

Peterson stresses that “role clarity becomes really important at this point. It should ensure that those involved don’t get lazy or even withdraw from the process.”

He adds that, even when several people are involved, it’s important not to simply go with majority rule, however tempting that might be. The argument is that this creates the risk that someone who loses the vote and fails to get their way “will have everything invested in seeing the decision fail”.

The role of effective leadership

Although this approach may seem anti-democratic, Peterson adds: “Voting has a tendency to polarise. You want to find a solution that makes those people whose opinions weren’t followed still feel invested.”

Effective leadership is therefore crucial in such situations. Raconteur’s research shows that senior leaders – defined as directors and CXOs – are involved in buying decisions across all areas, not simply signing off purchases in their own departments. Their leadership can help to direct the discussions and ensure that everyone involved is heeded.

“There is a risk that the most dominant person with the loudest voice in the room has an oversized influence on decisions,” Peterson says. “Managing that factor effectively comes down to good leadership.”

By following Prestento’s recommended steps, assigning each member of the buying committee a well-defined role and keeping a close watch on the political aspects of decision-making, an organisation will always give itself a fighting chance of making the right calls most of the time.

All too often, the responsibility for approving a purchase travels upwards through an organisation and doesn’t stop until it reaches a CXO. But, if a company is to be run at optimum efficiency, not all such decisions need to go that far to get the green light.

Determining which decisions require C-suite sign-off and which can be made further down the chain of command isn’t always clear. Companies seem divided on who should be making the final call.

For instance, Raconteur’s new survey of 1,100 business leaders has found that chief information officers signed off purchasing decisions concerning enterprise resource planning systems in 40% of cases. In the remaining companies, that responsibility was evenly split between IT managers and IT directors.

Deciding who makes the final call

One of the first tasks in any decision-making process is to determine the person who will make the final call. Randall Peterson, professor of organisational behaviour at London Business School, says: “You have to declare who that is. Otherwise, people don’t know who to try to influence and persuade, making the process totally inefficient.”

In many businesses, this responsibility falls to the most senior person in the room. Raconteur’s research shows that CXOs make the ultimate buying decision on eight out of the 14 products and services covered by the survey, while directors do so in six of the categories. 

Although this seems a natural and logical way of determining who gets the final say, it’s not always necessary. Peterson suggests that, rather than looking at seniority alone, organisations should pick the person with the most appropriate attributes. That’s likely to be someone with the best interests of the business at heart, who’s considered fair by all involved and who’s happy to consider different ideas and listen to the arguments for and against them.

It stands to reason that any good CEO should have these qualities, but that’s not to say that others further down the hierarchy can’t also possess them.

“Someone junior can absolutely be making some very senior decisions,” says Erika Eliasson-Norris, a leadership adviser and founder-CEO of the Beyond Governance consultancy. “But it depends on the organisation and the personalities of the people involved.”

When to give more junior people responsibility

There are obvious contexts in which giving someone more junior such responsibility would be inappropriate. Take construction and pharmaceuticals, for example. These are two industries in which the ramifications of a poor decision can be particularly severe.

“Making the wrong call in areas concerning health and safety could land someone in prison, so you probably wouldn’t want to be delegating that responsibility,” Eliasson-Norris notes.

Understanding the possible consequences of making a poor choice can therefore be the easiest way of determining who should be signing off a given purchase. But, equally, expecting a senior manager to approve every such transaction is unrealistic, especially in larger organisations. 

“You cannot be the sole budget-holder for procurement when you have a team of 250 and a £10m budget,” Eliasson-Norris says. “Even if you’re the founder and don’t trust other people, it would be impossible for you to sign off everything. You have to learn to delegate. Otherwise, your business will grind to a halt.”

Even if you’re the founder and don’t trust other people, it is impossible to sign off everything. You have to learn to delegate

If an organisation is incapable of effective delegation, it risks bestowing too much power to one person. Without proper governance, this can reduce accountability. Eliasson-Norris believes that there should be some form of documentation giving senior members of the organisation powers of veto over certain decisions and, in certain scenarios, the ability to dismiss the person responsible for a particularly bad decision.

This aspect of governance is “the key to ensuring that money is not misused”, she says. “We often hear from MDs who say a hiring manager has brought someone in on a six-figure salary but when they try to hold the individual accountable, there is no documentation saying they shouldn’t have done it.

“Without those rules in place, no one knows what they should or shouldn’t be doing and, no matter how misguided the decision might seem, they will have thought they were acting in the best interests of the business.”

Strategies to democratise decision-making

One company that has found a novel way around this challenge is office management platform Kitt. As the business grew, co-founder Steve Coulson decided to adopt a mini-CEO structure, which gave people decision-making powers further down the hierarchy.

He recalls a “painful transition moment” when the startup grew from 10 to 50 people and the old ways of working were no longer effective.

“As a co-founder, it’s possible to run your business in the early stages as a benevolent dictatorship, making decisions and executing against a single clear vision,” Coulson says. “But, once you hit a certain size, you can’t work that way because you no longer have all the answers and there will be many people in the business who are much better than you at certain tasks.”

Coulson created a system that allowed people to take ownership of their own decisions and their outcomes. Under the mini-CEO structure, high performers are given the chance to run their area of the company as if it were a separate business. 

Although this shifts all decision-making powers on to the mini-CEOs, each one has to reconvene with the co-founders once a quarter to bring forward a document of all the changes they want to make in the short term. This enables Coulson to assess the impact it would have on the bottom line and the necessary budgets.

One of the difficult elements of this format is allowing people to make their own mistakes. Coulson says. “The hardest thing is standing back and watching the car crash happen. But that’s the only way a mini-CEO develops. The more bad decisions you make and learn from, the better you eventually become.”

It may be easier to look at a bad decision as a learning opportunity when the financials involved are smaller. But there is still something for leaders to learn from Coulson’s willingness to delegate. Balancing the distribution of power and accountability is the key to ensuring that decisions cross the finishing line.

Raconteur’s recent research has found that, 94% of the time, a decision in a business will involve at least six people. A fifth of the time, more than 16 people will have an input. Do those numbers surprise you?

No. What you find in a lot of businesses is a lack of distributed accountability. If you take the RACI model [a responsibility assignment matrix used in project management], there are people who are responsible, accountable, consulted and informed. But firms often leave out the ‘accountable’ element. They create several management layers, meaning that someone else somewhere up the chain becomes accountable for what you’re responsible for delivering. That’s where decision-making breaks down, because each person ends up covering their own back.

An unbelievable amount of decision paralysis happens in business because no one wants accountability. The problem is that, if someone is three positions removed from a decision but is accountable for its outcome, they will want to know all the details. Even if they do know them all, they probably don’t understand them. So it becomes a massive job to make them feel comfortable enough to sign off on the decision.

Jellyfish has dumped the ‘responsible’ aspect of RACI. In effect, this means that if you’re responsible for delivering something, you are also accountable for it. The only decision that must be made by committee is to determine who the responsible and accountable person should be. That individual is then empowered to make the relevant decisions.

How should businesses decide who is accountable?

When we make someone accountable, it’s based not on seniority but on the person having the relevant experience and/or granular understanding.

The only accountability the others have is that they were part of the collective decision to make that person accountable. If that doesn’t work out, you still have the rationale for the choice you made. And it also means that everyone, when they’re making their decisions, can’t fall back on someone else or try to cover their back.

Does that place excessive pressure on the person who is deemed accountable?

Most corporations work based on one person being accountable for everything. That would be like me, as CEO, being accountable for every single thing done by the 2,200 people who work for Jellyfish. I will get either the blame or the credit. But I don’t want to take the blame or the credit. I want people to make the best decisions.

An unbelievable amount of decision paralysis happens in business because no one wants accountability

It doesn’t matter what level someone is working at if they’re unequivocally the best at something. How can it be too much responsibility for the most qualified person in the organisation to own a particular initiative? It means that you get the best-equipped people making the decisions, owning them, taking accountability, learning from them and optimising their approach. By distributing decision-making and accountability this way right across the organisation, you make the business more agile and productive.

Why has decision-making become so complex at most companies?

A way of working has crept in whereby there’s a common situation in which people in highly paid roles are reliant on the system. [There are many executives in many companies], far removed from the actual execution, who are there to manage people and sign things off. It’s crippling for a business when the smallest things have to be approved at C-level.

If you have the right system, people can take accountability for their decisions, which don’t have to be big calls to start with. When they see the results of their choices, they will learn and make better ones about bigger matters in the future. That’s what empowers them. It’s how they evolve and become more competent decision-makers.

What problems are caused by a lack of accountability?

The big one is that decisions aren’t made. I live by the philosophy that more is lost from indecision than a wrong decision. Companies that procrastinate miss opportunities. People are happy to use the clichés ‘learn fast, fail fast’ and ‘learn from your mistakes’, but you can’t do that if a decision wasn’t taken in the first place. (That doesn’t mean being reckless, of course. You can mitigate risk by consulting the right people and establishing checks and balances.)

If you make a decision, you can often make adjustments later. But you can’t bring back an opportunity you’ve lost. If a company gets in the habit of blaming decision-makers for constantly changing their minds, that will create paralysis or the feeling that you must stick to a course of action, even if it turns out to be suboptimal.

It’s a hard balance to find, but at Jellyfish we try to be agile and develop our decision-making. We encourage the business not to hold someone to account for a call they made three weeks ago [if it’s overtaken by unexpected developments] – an economic crash, for example. Decision-makers have to be able to work with the best information available to them at the time.

In many ways, the job of making a business decision is just the beginning of the process. Those affected by the change need to buy into it. Otherwise, it is likely to fail in the longer term.

This is partly why HR is becoming more involved in decisions that sit outside its department. A survey of 1,100 senior business leaders by Raconteur reveals that HR has significant influence over purchasing and is classed as one of the top five decision-making functions by almost half (49%) of executives. This puts HR ahead of marketing, tech, legal and procurement for decision-making.

Finance especially values the input from HR, with 68% of financial specialists describing it as one of the top five decision-making functions, while more than half (54%) of marketing executives think the same. Some 64% of finance executives say that they regularly (every week) work with HR, while 57% of sales and 49% of operations executives say the same. 

HR professionals themselves say they have decision-making influence of some form (ranging from being involved in the decision to signing it off) across a range of business functions. This includes ERP, where 73% say they are involved, to sales technologies (81%), martech (81%), data storage and processing (97%), business intelligence (79%) and legal services (72%).

But why has HR come to play such a critical role in business decision-making? The data suggests that the people-first mindset can help companies to make important investment decisions about software and technology because they look beyond cost. They understand how decisions need to work for employees and this is how HR can help create employee buy-in for business decisions.

HR’s intrinsic role

A roundtable report published by Ricoh at the end of 2021 argues that the pandemic has increased the voice and credibility of HR departments. A mixture of new working styles and the task of managing different employee and business needs has increased the importance of the function and its responsibilities.

“HR’s remit has grown since the pandemic struck. HR teams across sectors and industries are responsible for much more, including employee productivity, health and happiness,” says Rebekah Wallis, director of people and corporate responsibility at Ricoh UK.

HR’s remit has grown since the pandemic struck. HR teams are responsible for much more, including employee productivity, health and happiness

“The fact that HR teams are intrinsically linked to each individual and department across an organisation means other teams – from procurement to IT, and finance to operations – rely heavily on them before investing in tools and services.”

It’s for this reason that HR departments need to be looped into purchasing decisions that affect the roles and responsibilities of staff. Christian Kaberg agrees that “HR must be involved in the decision-making process if it directly, or indirectly, involves people”. Kaberg is the managing director of the St Pancras Hotels Group, which owns several boutique brands in London.

“HR departments will have a more people-based view on roll-out and communication processes,” he adds.

Creating buy-in

There needs to be clear communication of the goals and objectives, from the top down, to create successful buy-in. Communication between the C-suite and employees at any company will generally be dictated by the HR department.

Post-lockdowns, though, many people work from different locations, which can make it difficult to get messages across to employees. While the HR function may be “intrinsically linked” to other departments, as Wallis puts it, a common theme in the Ricoh roundtable discussions is a considerable lack of reliable and accurate metrics to support cross-departmental collaboration. Essentially, HR teams often don’t have the data to make more informed decisions for employees.

“HR departments struggle to get the insights needed to make these choices and recommendations. CEOs and business leaders need to give HR managers and directors the tools to make better considerations,” argues Wallis.

By involving HR in these purchasing decisions, companies can ensure that they are investing in technology that enables constant communication – which HR can use to capture the insight they need to provide the right support to employees across all departments. The ideal system should “allow HR departments to better understand every employee,” says Chelsea Coates. She is chief people officer at GWI, an audience research company that has offices in London, New York, Athens, Prague and Singapore.

“HR can get ahead of issues, recognise where there are opportunities and provide the right tools to get the best out of people. We can also ensure that employees have a positive experience, from onboarding through to leaving the business,” she says. “When HR managers have the data they need, they have a much clearer idea of individual levels of engagement, performance and tenure – and all of that encourages bespoke conversations on personal development.”

Transforming through training

A key part of any major decision journey is reskilling and upskilling employees so that they can adapt to new, more complex processes and procedures. Not doing so can cause employees to become frustrated and disengaged. With the right software and technologies, HR teams can improve the training and development they deliver.

Just as important as engaging employees is encouraging the C-suite and business leaders to develop the skills they require to lead the company through changes with confidence. HR can use software and other technology for this. GWI uses an artificial intelligence (AI) platform to deliver its leadership coaching programme.

Coates explains that the benefits of using AI and analytics include the ability to “spot trends and themes, get a view of the challenges and give each leader an experience which is customised to their needs”.

If business leaders are well prepared, it filters through to employees, who will probably be more willing to accept decisions if they understand why they were taken and exactly how they will affect them. On the other hand, not involving HR departments in purchasing decisions can lead to outcomes that fail to put people first and do not create buy-in from all employees.

While he was flying over New York City in a helicopter one winter’s day in 1987, Jack Welch had a lightbulb moment. The charismatic chairman and CEO of the General Electric Company (GE) was frustrated with his organisation’s silo mentality and its detrimental effect on decision-making. As he sped past the skyscrapers of Manhattan, he came up with a solution that would become known as the GE work-out programme.

This took the form of large meetings designed to optimise communication and accelerate change. The sessions had to involve cross-functional groups of between 45 and 100 people from different levels of the organisation to ensure a broad range of perspectives. Each session would be led by one member of the executive leadership team, who had the power to approve or veto any idea arising.

Whenever significant problems presented themselves at GE and rapid adjustments were needed, the company would convene work-out sessions. In each case, the teams that were closest to the problem at hand worked intensively alongside representatives of customers, suppliers and/or other relevant business partners to analyse critical issues and come up with their recommended solutions, which were then implemented at speed.

Many other big companies, including IBM and Philips, have since adopted a similar approach, yet some of the world’s largest brands still find effective cross-functional collaboration problematic. A silo culture, in which departments work independently and rarely share information, can stall the decision-making process, reduce productivity, hide serious problems and hold back innovation.

A new Raconteur survey has found that 85% of senior business leaders value regular communications from their organisations’ various functions to keep them updated and aid their decision-making. Three-quarters rarely make significant choices without consulting other departments. Despite this, 83% of respondents say that they would benefit from a greater understanding of different functions when making big strategic calls for their businesses. So how can companies up their game in this respect?

Building greater cross-departmental understanding

Joanna Swash is group CEO of Moneypenny, a firm that looks after phone calls and live chats for businesses in the UK and US. She stresses that improvements have to start at the top. 

“Leaders need to create an environment in which people feel confident enough to talk about where they’ve gone wrong and what their needs are,” Swash says. “Different departments can then help to meet those needs. The important thing is that everyone understands what the challenges are.”

Swash suggests a straightforward approach to adopt at the start of a big project to stimulate a virtuous circle of healthy communication and collaboration: “go slow to go fast”.

She explains: “Stay in the planning phase until you’ve got everyone who’s working on the project on board with its end goal. Get all the resources you need in place and establish processes to fix any issues that could occur during the project.”

Swash and her team will also conduct what they call a pre-mortem during the planning stage in which they imagine that the project has failed. They work backwards from that theoretical outcome to determine what could lead to the failure and who should be responsible for resolving the causes.

But could such a painstaking initial phase serve as an unnecessary drag on decision-making? 

You need diversity of thought. If each member understands what they bring to the table, you’ll have a dynamic team

“The most successful projects I’ve worked on have stayed in the planning phase for a frustratingly long time,” she says. “Every business wants to move fast, but taking time at the beginning to engage the entire organisation will ultimately allow the project to advance at speed.”

Moneypenny has also created a central business change department. This is specifically responsible for key choices such as selecting which new customer relationship management system to buy.

“This has really helped us to make the right purchasing decisions,” Swash says. “Our business change department has no vested interest in choosing one system over another and its members are very knowledgeable about the entire business.”

Why businesses must show change

Les Gregory, a strategic adviser and former director at BAE Systems, believes that images are just as important as words in ensuring effective interdepartmental communication.

Looking back on his 40-plus years with the aerospace and armaments company, he explains: “If we were making big organisational changes, we’d get a graphic designer in to draw the big picture. This is a visual representation of all the things that are wrong with the business or a particular process. The image shows what employees, customers, suppliers and the local community think of you, but also how the proposed changes are going to transform the situation and improve the business. It’s a brilliant way to ensure that everyone is on the same page.”

Alison Edgar is another advocate of using visual representations. She helps some of the world’s biggest brands, including Sky and Amazon, to improve their interdepartmental communication. Juggling balls are her preferred metaphor, offering everyone in an organisation a common language that enables them to quickly convey what their priorities are. The idea is that this serves to expedite the decision-making process.

The method uses balls of different sizes to symbolise tasks of varying importance and urgency: basketballs (important and urgent) tennis balls (urgent, but less important) and ping-pong balls (important, but less urgent). There are also what Edgar calls “neithers”: relatively trivial, non-pressing tasks that don’t warrant a ball.

“You have to develop strong relationships to build communication,” she says. “But what happens when someone working in a different department is very different from you? Your gut feeling might be that you don’t like that person. But, if you have a common language in which you’re both fluent, you can still communicate well.”

The importance of diverse teams

Building diverse teams, with members who have complementary skills and personalities, is another way to optimise communication and decision-making. Personality profiling is a key tool in Moneypenny’s recruitment process. The company uses the predictive index test to evaluate candidates’ cognitive abilities, personality traits and behavioural tendencies.

“It helps to build a really diverse team,” Swash says. “You need diversity of thought and different ways of approaching a problem. If each member understands why they’re different and what they bring to the table, you’ll have a dynamic team.”

Well over three decades on from Welch’s inspirational flight over New York, many businesses are still facing similar communication problems to the ones he tackled so decisively at GE.

They don’t necessarily need to adopt a work-out programme, but their leaders would be well advised to engage more often with all areas of the enterprise. In doing so, they will gain valuable intelligence to inform key decisions.

If a firm can set up an independent department that’s dedicated to business change, that should provide an insightful helicopter view of key projects. Moreover, adopting visual forms of communication can create a common language that should help different departments – preferably containing employees with a wide range of skills and experiences – to understand each other’s priorities. The result will be a more coordinated organisation with a collective voice, which will ultimately make better decisions.