The Sad Truth About Small Business Decision-Making… 1

ColorsProblem: One of the things I really like about startups and small businesses is also a frequent problem with the way they make decisions. Let me explain.

I love how so many startups and most small businesses are communities that work like small groups without a lot of hierarchy and structure. It’s so often like mice gathering around a big piece of cheese. Everybody finds something to do.

And in a lot of these businesses, with a community atmosphere, decisions are made by the whole group. When the whole company is only five or 10 people, they’ll often talk about a decision, weigh pros and cons together, and come to a conclusion.

But here’s the thing: As the company grows, it breaks into jobs and responsibilities and functions, but it often keeps that atmosphere of sharing and discussion. So over time, processes get bogged down. The bookkeeper is unhappy that the package is red when she wanted it green. The sales manager doesn’t like the way an accounting clerk deals with late unpaid invoices. And the web developers don’t like the messaging on the marketing pages. And that’s the sad truth.

Unfortunately, consensus doesn’t often lead to the best decision process. Generally you want the marketing person to decide about images and messaging in ads, the web developers to decide on platforms, hosting, security and such; and the finance people to figure out cash flow and accounts payable and accounts receivable.

Somebody told me once that when colors are chosen by committee they always come out beige.

 

About the Author Tim Berry is the founder and chairman of Palo Alto Software and Bplans.com. Follow him on Twitter @Timberry. Follow Tim on Google+ Read more »

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  • Philip Foster

    When we see a break a breakdown like this – it is likely as result of lack of foresight and planning. Let me explain. Start-ups need to develop First Principles and a Governance that is scaleable. All too often small organization lose their “flatness appeal” and “openness” because they do not scale their growth. I’ve seen organizations with hundreds and thousands who use a flat, agile, or otherwise open structure with great success. The demise of shared decision making does not have to happen.

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    Dr. Philip A Foster is considered a Thought Leader in Business Operations, Organization and Strategic Leadership. He is a prolific writer, published author and lectures internationally. His most recent e-book “Organization 3.0 – The Evolution of Leadership and Organizational Theories Toward an Open System for the 21st Century” is available exclusively on Amazon. Philip is certified in both Leadership and coaching and serves as Adjunct professor at Middle Tennessee State University, Murfreesboro, TN. He is the Founder and CEO of Maximum Change Leadership and Business Consulting, serving clients from around the world. He is a Doctor of Strategic Leadership with emphasis in Strategic Foresight and holds a Master of Art in Organizational Leadership, both from Regent University, Virginia.