$400 Decision

At a recent program, one of my colleagues, Chris McQueen, and I were trying to convey the concept of executive growth by measuring the dollar value of the decisions that executives allow their people to make. Chris asked the class, “How big are the decisions you let your people make? Are they forty-dollar decisions, four-hundred-dollar decisions, or four-thousand-dollar decisions?” The answers would speak volumes about each person’s perceived quality of their people and about their own leadership abilities.

With one question Chris had managed to take a handful of fairly conceptual ideas (trust, delegation, risk) and state them in a manner that was quantifiable and made sense to the average person.

Still, one of the attendees in the audience—a former Major League Baseball player—had a quizzical look on his face. Using baseball as a metaphor, I offered a story that I thought might bring the concept home.

Imagine that we’re late in a baseball game, up by one run, and our team is at bat. There are two outs and a runner on second base who’s just itching to steal third. Who do we let make the decision whether to steal the base?

The runner on second, a 21-year-old hotshot who’s full of adrenaline and testosterone and who’s trying to settle the score with the catcher who threw him out while stealing second earlier in the game?

The third base coach, a seasoned pro and former catcher whose job is to preserve the win and move the team closer to the playoffs?

As the manager of the team, you could also override both your coach and the runner. Of course, if you go this route nobody learns anything and you reinforce to the entire team your need to control every decision.

With stakes this high I would let my third base coach do his job and make the call. Regardless of the outcome, doing so will reinforce the coach’s position with the runner, support his position with the other coaches on the team, and confirm my confidence in making him a coach. Each of these benefits has a dollar value associated with it.

It’s the same in any business. The ability and willingness of the owner to delegate decision-making authority to those in the organization, and then let them actually make the decisions, is a measure of both the competence of the company’s workforce and of the leadership maturity of the owner.

Many of us talk a good game about giving people the authority to make decisions but when push comes to shove, we pull back that authority and decide ourselves.

Whenever you find yourself faced with delegating the authority to make decisions, use the $40-$400-$4000 test to determine just how much authority you’re comfortable handing off. You might find it a handy way of delegating increasingly greater decision-making authority.

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