Organization Design

Decision Rights and Who Owns Which Call

Learn to name, for any recurring call in your business, the single person whose answer binds the company, and to see why an unowned decision costs more than a badly made one.

  • Advanced
  • 13 min total
  • 14 chapters

What decision this helps you make: Which decisions you keep, which you hand over, which you convert into a standing rule, and how to tell the three apart before the next planning cycle rather than after it.

What this topic is

A decision right is the authority to make a particular call and have it bind the organization. Not the right to be consulted, not the right to object afterwards, and not responsibility for the outcome. It is the right to say yes and have work start. Most companies have an org chart, which shows who reports to whom, and no equivalent map of who decides what. The two are not the same document and the second one is the one that governs behaviour.

Why it matters

Almost every complaint that presents as a culture problem is a decision-rights problem in costume. "Nothing gets decided here" usually means several people believe they hold the same call and none of them will act alone. "We move too slowly" usually means the call sits three levels above the only people who can see the facts it depends on. Both are fixable in an afternoon by writing something down; neither is fixable by a workshop about collaboration.

Who should learn it

Founders crossing the point where they can no longer be in every conversation, managers who have inherited a team with no clear boundaries, and operators trying to work out why a plan everybody agreed to has still not started.

What you will understand

  • The four-part anatomy of a decision (initiate, ratify, implement, monitor) and why the same person should rarely hold all four
  • The knowledge-location rule: move the decision to the facts, or move the facts to the decision, and price both
  • How to compute what an unowned decision costs you per month, in cash
  • When to convert a decision into a standing rule instead of assigning it to anybody at all

Prerequisites

Common misconception

"If we get the org chart right, the decisions will follow." The org chart allocates reporting lines and pay bands. It says nothing about who may approve a discount, kill a feature, sign a supplier, or overrule a specialist, and in practice those questions are answered by habit, seniority and whoever happens to be in the room. The second misconception is that clarity means centralization. Writing down who decides usually reveals how many calls a senior person is holding for no reason other than that nobody ever took them off the list, and the honest map is almost always a map of things to give away.