Any business has to have intrinsic mechanisms and approaches in its processes and culture to sustain an ever increasing amount of changes caused by internal or external factors.  Of course, ideally would be to have a standard process to reach the decision for changes, segmented for the various organizational levels and functions and depending of how much of the business is affected.

A few critical aspects of the decision process for changes include buy in from all stakeholders and understanding all implications of the changes.

WESTERN DECISION MAKING
In the western world, the business culture is such that, the decision about the changes is usually coming from senior management.  The decision has to be communicated, justified, explained and planned.  Significant effort is invested in communications and getting the buy in from everybody.  Many times, while implementing the change, issues appear that were not recognised initially and the deployment process gets delayed and more expensive.  This is a significant risk in the business operations especially that, most of the time, implementation of changes is done while continuing normal operations. The issues associated with changes also affect the moral and people may not be as supportive as initially thought. The gaps in communication and collaboration that existed in the planning phase surface with greater impact in implementation phase.

The typical change management approach is:

1. Create an awareness of the need for changes.
2. Organize a project with sufficient authority guide the process.
3. Define the vision and strategies for achieving it.
4. Communicate the vision and demonstrate personal commitment to it.
5. Remove obstacles that prevent others from acting on the vision.
6. Go for early and visible wins.
7. Build on success by rewarding supporters and involving more people.
8. Institutionalize the new methods by aligning other system with them.

J. P. Kotter, Leading Change (Boston: Harvard Business School Press, 1996)

This approach is successful in a culture of strong senior management commitment and engagement, where people feel free to bring up potential risks as soon as they become apparent (hopefully in the planning phase.)

CHANGE MANAGEMENT RISK
The stronger and better managed the change process, the less risk the businesses is facing.  If the change management process is systematic and well deployed, aligned with the strategic goals and well integrated across all business systems affected, the enterprise and process risk are also well managed and mitigated.  There is also greater chance that the culture is such that it can sustain the changes and it can adjust as needed, which are indications of well managed risk.

But many times, changes in the business processes or in the organization, translate into fire-fighting situations mostly because unforeseen side effects or situations that have to be taken into account, were not part of the original plan.  It is “the discover as we go” because not all the stakeholders participated in evaluation and planning of changes. All this is increased business risk, increased operational cost and decrease moral.

RINGI – JAPANESE DECISION MAKING PROCESS
A different approach is the Japanese Decision-Making Process (Ringi) as described at: http://www.citehr.com/18654-japanese-management-philosophy-techniques.html#ixzz2Zo0U5PHQ

Harmony and peace are the pre-eminent concerns of Japanese society.  These have had a direct effect on Japanese decision-making.  The ringi system of decision-making is one of the most important features of Japanese management (Fukuda, 1988: 65). (Rin means submitting a proposal and requesting a decision, and gi denotes deliberations and actual decisions.)

The ringi system comprises two methods: nemawashi and ringi seido.  Nemawashi refers to dealing with the roots of trees.  In Japanese gardening, the transplanting of a tree requires much skill and meticulous effort.  Business decision-making involves a similar process, with careful attention being given to the preliminary stages of the process (Chen, 1995: 184).  Nemawashi is thus the practice of preliminary and informal sounding out of employees’ ideas about a proposed course of action or project.  Nemawashi also implies the activities that take place below ground level and describes the nature of the sounding out, in which contacted persons remain anonymous and feel free to talk about their ideas.

Ringi seido, as opposed to nemawashi, is a commonly used formal procedure of manage ment by group consensus.  A ringisho is a proposal that originates in a section, and is forwarded to all relevant sections on the same level, the section heads, the managers, the directors, and eventually the president of the company.  Upon receiving the ringisho, each will make comments on a sheet attached to the back of the proposal.  The decision will be made by top management based on the comments from all people involved in the pro cess. The purpose of this roundabout way of making decisions is to eliminate dissension, as many are given a chance to change a decision before it is actually made.

Thus under a ringi system, the Japanese think an issue over thoroughly, define the question, put it all down on paper, and pay immense attention to all aspects of nema washi.  And because the views of many are sought, with consensus management and group consciousness, the decision is likely to be sounder and later implementation made easier because it has already been pre-sold and employees are committed. Consequently, when the proposal reaches the president he can, in theory, pass it back and say: this is your idea, get on and implement it.

With this collective method miscalculations are rare and it suits the Japanese sense of values.  It also helps to boost morale, generate harmony, and strengthen loyalty and cohesion among staff.  Group decisions tend to be bolder than those made by individuals and better represent a long-term view (Waters, 1991: 36).  Another main advantage of the Japanese form of decision-making is that employees at lower levels can initiate proposals or work out plans, which are then transferred upward to higher levels of management. The power lies in the joint responsibility of all employees for the successful implementation of the new idea since they have all been involved in the process.  Also the infusion of many different individuals in the decision making process tends to reduce the danger of a decision being manipulated by certain individuals (Chen, 1995: 187).

SO, WHAT DECISION MAKING PROCESS IS RIGHT FOR YOU?
Some would argue, however that consensus in the Japanese decision-making system is not a virtue, but a weakness since, traditionally, Japanese are led to believe that there is always one right answer to a question and that authority should not be challenged (Nishumuro, 2000).  Another flaw with the system is that it can be a slow, cumbersome process.  Too many meetings are held, with many unnecessary questions and suggestions raised, thus delaying business decisions, which often require a swift response.  By the time a decision is reached, the deal may already have been clinched by competitors. Spontaneity, personal initiative, and entrepreneurial spirit are thus automatically eliminated from the process.

(End quotation from http://www.citehr.com/18654-japanese-management-philosophy-techniques.html#ixzz2Zo0hFdkb )

SO, WHAT’S BEST FOR YOU?
Since change and decisions about changes are part of daily operations, a thorough evaluation of the decision-making processes may be another opportunity for improvement. The result of this evaluation would provide insights into overall business risk, including operations and culture.

Bio:

Adina Suciu CSSBB, CMQ/OE, is principal consultant at Adav, LLC a Seattle based company focused on helping people and organizations to attain and sustain agility. She is also a Baldrige examiner and assessor for the European Framework for Quality Management. She can be reached at adina@adavconsulting.com and at 206.234.8014.