Monday Mentor Week 27-The Levels of Decision Making

It is important to note that not all decisions are created equally nor do they require the same type of thought and analysis.



To improve the ability to make decisions, effective leaders must first analyze and determine the decision level in which they are dealing. There are basically five levels of decision making and each have a different set of consequences and impacts.


Rudimentary decisions are those base levels of decisions that you process on a reactionary and almost automatic mode. Should I go to the bathroom? Should I eat now or later? Should I use this word or another, more colorful word? These are processed in very quick terms with little thought and usually very little impact. The sphere of impact is limited usually to you and you alone.


Operational level decisions are those decisions that are usually produced in the day-to-day flow of business operations and many times dictated by a formalized authority matrix. Approving checks, signing requests for time off, authorizing refunds, providing credit and allowing overtime are common examples of operational level decisions.


A significant issue in many businesses is that too many operational level decisions require far too high of a level of approval. The most healthy organizations press down decision making authorities to the most appropriate level and require line level team members to make the bulk of operational decisions, especially those that affect customers or end users. When decisions are consistently pressed upward, organizational efficiency is dramatically reduced and the ability of a company to respond to customer needs and changing environments is impaired.


Ninety percent of all operational level decisions should be made at the team member level. If more than ten percent of operational decisions are coming up to a leadership level, there is wasted time and efficiency could be improved. Some leaders, not the effective ones, are very comfortable in making more than ten percent of the operational level decisions because it insures their importance and reinforces their need to the team.


Tactical decisions are those that affect how business is done. This is more related to the mission than to the vision of an organization. Common tactical level decisions include staffing levels, scheduling, budget submissions, procedural elements and processes. Tactical decisions should be left to the leadership level that is most closely connected to the front line team members. This level of leadership is most expert in the tactics needed to deliver products and services and should be charged with the lion’s share of tactical decision making.


Like with operational decisions, some more senior level leaders like to insert themselves into tactical level decision making. Even with one-up approvals on tactical issues, this will hamper effectiveness and neuter lower level leadership innovation, decision making and ownership.


The next level of decision making is strategic. Strategic decisions define overall direction of an organization or unit within an organization. These are the very important decisions with major impact such as strategic planning, growth or contraction, product lines, pricing, locations and overall corporate strategy. This type of thinking is not limited only to senior and c level leaders but it is most commonly associated with that level in an organization.


With each of the four levels of decision making identified above, there is an increasing bar of impact for each level. Impact increases as the decision level increases and with that, the amount of time, thought and analysis must increase as well. It should not take weeks to make an operational level decision and strategic decisions should not be made in thirty seconds.


Another dynamic of the decision making levels is the longevity of the outcome. Operational level decisions have short life spans while strategic decisions will have lasting and sometimes legacy levels of life. Also with these levels is the ability to unwind the decision. Operational and tactical decisions are relatively easy to reverse while strategic decisions are much harder, more complicated and have a greater cost to change.


As a strategy to reduce rash and arbitrary decision making, triage decisions into the categories above before moving into other decision making steps. This will assist the effective leader in determining the amount of input from others and time required to effect a great decision.