You may not have heard of decision latency before but I can guarantee you've experienced it.
How long does it normally take between the moment a situation demanding a decision arises and the point at which a decision is finally made? A day? 3 days? A week or longer?
I'm sure you've been here before. Decision latency is the time it takes for a team to make a crucial decision in response to a business change. It represents the lag between identifying a problem, formulating a solution and actually making a decision.
Decision latency is a killer! So why is that and more importantly what can you do to help. Let's talk about it.
Now, decision latency is not just about the time it takes to reach a decision it's also about the quality of that decision. As you probably know I'm a big advocate for being data driven in decision making. But there's so much data available paradoxically it can actually slow us down making our decisions because of the sheer volume of it.
The big differentiator between those who aspire to be data driven from those who actually are comes down to how quickly decision makers can get the answers they need to make an informed decision.
Now the Standish Group have been collecting data on projects for over a decade. And their research published in a 2018 paper called ‘Chaos’ shows that decision latency is key to success.
Decision latency is simply the average amount of time it takes to make a decision. Now when a decision takes less than an hour to make, success rises to 60% but drops to 20% when it takes longer than 5 hours. Think about that for a moment.
A drop in success to only 20% when it takes longer to make a decision in just 5 hours. Think about how many decisions that block you on a daily basis, waiting for a stakeholder, or worse, a committee or working group.
Decision latency happens when people are not properly empowered to make their own decisions, so self-management is not truly embraced.
You need direct contact with the client on a daily basis. Because very often, in fact most of the time, the client doesn't know exactly what they need.
You may have heard of Humphrey's Law;
The user will never know what they want until they see the system in production and maybe not even then
Or to put it a little more eloquently by Steve Jobs
Some people say give the customers what they want, but that's not my approach, our job is to figure out what they're going to want before they do, people don't know what they want until you show it to them, our task is to read things that are not yet on the page
So you need to work closely with your client, bouncing ideas off of each other.
Introducing a middle layer or proxy for this dilutes understanding and increases decision latency.
You have to work as a team, together. Not a pseudo team where you just have the pretence of working as a team, but really all you do is divvy out work to the members of this team and then go off and work on your own in silos, AKA waterfall.
So what can you do to reduce decision latency for your team?
Take a look at your business processes. The first step to reducing decision latency is understanding where the delays are coming from for your team.
So use flow efficiency, cycle time, throughput and work item age to help you understand where these delays are happening, so that you can do something about it.
Next you need to improve the availability of your data.
Making informed decisions quickly requires the right data to be easily accessible. Now this involves ensuring that your data is organised, up-to-date and easy to navigate.
Don't let your team mess about manually prepping data for analysis, automate this data.
And don't store this information in a multitude of places for example a plethora of Excel spreadsheets and a myriad of PowerPoint slides.
Use the minimal amount of tools, preferably one.
To do this you'll likely need to create a dashboard that integrates this data. Put the time and effort into doing this as it will pay huge dividends for you enabling you to make quicker and importantly smarter decisions.
Next you need to increase the visibility of this data. Even with the right data, decision latency can occur if key changes in metrics get missed or seen too late.
So use cycle time, throughput, flow efficiency and work item age in your meetings. Make sure the dashboard you created is easily reachable and people know where to find it. For example, if you're using Scrum surface them in the Daily Scrum.
Next enhance data analysis. Improving the speed and quality of data analysis can significantly reduce decision latency so consider using something like Monte Carlo Simulation for forecasting. It can help you understand if your next project is worth doing by understanding how long it will take and therefore how much it will cost compared to the benefit of doing it.
A fast decision is no good if it's the wrong one. Only by understanding the right data points can you reduce decision latency. It's a continual process. So use your agile ways of working to help make your decision-making flexible quick and iterative.
Agility encourages quick decision making based on available information and learning from the outcomes to make better decisions in the future.
Ultimately the journey to reduce decision latency is a continuous one involving ongoing learning and adaptation. It's about creating culture that values data, understands its role in decision making and is committed to using it effectively.
In this way you can move your team towards a future where decision latency is no longer a barrier but instead a catalyst for efficient data driven decisions.
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