Why does decision making in large corporate tend to be so bloated?

[yet-another-guy]

I've worked in large corporate for nearly a decade. Decision making has always a funny dual mode.

BAU decisions (ops, outstanding items) always go through a hierarchy of periodical decision forums / assemblies with representatives from a plethora of different BAs, especially compliance and oversight functions. These representatives never report to the chair, so their opinion is ensured to be independent and their hand can't be forced. Sounds very good in theory, but this comes at the cost of nothing ever getting decided apart from slam-dunk decisions that shouldn't even be submitted there. The most likely outcome of any decision making process is "we don't have enough information to decide" with the decision being pushed over onto the next round, with an ask to clarify, give more inputs, context etc. Very understandable since these decision makers are always hands-off managers with little understanding on what's presented to them unless they familiarize with the topic for months.

The-house-is-burning do-or-die type of decisions are always sorted out in shadow meetings where a handful of execs sit in and deliberate, based on gut feeling or some back-of-the-napkin calculation, in less than an hour, and the above fora hierarchy basically only ratifies because everyone is suddenly magically aligned on what to do.

Every org is aware that this is suboptimal. Every org constantly asks their employee if they are empowered enough to take decisions when they need. Answer: no, they don't if everything needs to go through forums bloated with compliance people who can say no to everything because the cost of their no is never factored in.

Yet, nothing ever changes. Can't it really be done any other way?

I'm thinking job security is very much related to this. If there's never a single head on the block, then when the shit hits the fan everyone's responsible (meaning nobody is responsible, and nobody can be fired). If you want to expedite decision making, then you need these fora to just act as counselors/advisors, but then execs have to shotcall. If they fuck it up, well... there's a resignation letter to write.

Related discussion: https://news.ycombinator.com/item?id=20155636

[bell-cot]

Unless the situation is IC-level, or routine, or the manager's hand is forced - what does the the upside/downside payoff matrix look like, for a manager who actually makes a decision? Does the org even keep track of decisions (except maybe disastrous ones)? Let alone promote on the basis of reliably making good ones?

[yet-another-guy]

Let's make a concrete example: the business dev org wants to automate some manual process to cut some cost. This will come at a controlled risk, with a business case looking like "X $ saved at Y% decrease in output quality". The problem would be much easier if Y could be easily translated to money, but for compliance-heavy domains where things like reputational damage or regulatory fines are at stake it isn't. You could model this, but then you have the same problem, just one level down: who signs off that the model is good enough?

The decision is essentially a negotiation of what X and Y are acceptable. This negotiation is always stonewalled by some compliance function who want Y to be zero. They never own the costs (nor the X benefit), so why care right? The payoff matrix then looks like this:

We do what Dev says, Dev is right (Y% decrease in quality isn't significant): we saved $X, Dev gets promotions, good job. We do what Dev says, Dev is wrong: regulatory fines, reputational damage, big panic, some head gets cut We do what Compliance says, compliance is right (hard to actually verify since well, you just don't do anything): saved the day from incompetence and greedy risk appetite We do what Compliance says, compliance is wrong: cost benefit not realized, a bunch of man hours wasted down the drain, not Dev's fault though (they tried). Compliance is ok because well, better be safe than sorry right?

All of these decisions are tracked in meeting minutes, but even in retrospect: how to verify when a decision is good? You've simply never taken it and maintained the status quo.

This is a rather simplified version, but the core still holds: people who own the costs and who own the risks are put in a cage fight to negotiate with the only escalation path being to higher level decision forums that at some point can't be bothered because the Xs and Ys are too small/irrelevant for them.

The only out I've seen to this is falling back to Big4/MBB consultants, where suddenly a double standard becomes super evident. Now compliance suddenly presents a much lower bar to jump: who cares if they fuck it up: it will be their fault. The idea is that potential regulatory/reputational damage can and will be deflected onto them. After all it's part of their job and they have large enough shoulders (political connections) to see it coming, mitigate, etc.

[AnimalMuppet]

It's often easier to not make a stupid decision than to make a good one. I think this approach is geared toward stopping stupid decisions, rather than actually making decisions. But there is some genuine value in that...

[yet-another-guy]

There is of course value in stopping stupid decisions, and every org should have some form of control for avoiding a director going completely crazy. But when you implement such independent compliance functions then how do you get anything done other than maintaining the status quo?

Think about developing a new automation project/feature that reduces some cost while increasing some risk in a controlled way. If you have a decision body with people who only own costs vs. people who only own risks you'll be in deadlocked forever.