Lower level managers do not make decisions which impact a companys success.

The focus of a manager or a business owner is often primarily on doing well (making a profit). Sometimes, though, organizational leaders choose to pursue two big goals at once: doing well, and simultaneously doing good (benefiting society in some way). Why? Generally because they think it’s an important thing to do. The business provides an opportunity to pursue another goal that the founders, owners, or managers are also passionate about. In the case of New Belgium Brewing, the company’s cofounders, Jeff Lebesch and Kim Jordan, were passionate about two things: making great beer and environmental stewardship. So it should come as no surprise that their brewery is dedicated to reducing its environmental footprint. The brewery has created a culture that fosters sustainability in a wide range of ways, such as by giving employees a bicycle on their one-year anniversary as a way to encourage them to ride bicycles to work. The organization is also active in advocacy efforts, such as the “Save the Colorado” (river) campaign, and it works hard to promote responsible decision-making when it comes to environmental issues. In fact, in 1999, following an employee vote, the brewery began to purchase all of its electricity from wind power, even though it was more expensive than electricity from coal-burning power plants (which meant reduced profitability and less money for employee bonuses).

While the brewery still relies primarily on wind power, it also now generates a portion of its electricity onsite—some from rooftop solar panels, and even more from biogas, the methane gas byproduct that is created by microbes in the brewery’s water treatment plant. The company cleans the wastewater generated from beer production, and in doing so it generates the biogas, which is captured and used for energy to help run the brewery.

Brewing is water intensive, so New Belgium works hard to reduce water consumption and to recycle the water that it does use. The company also reduces other types of waste by selling used grain, hops, and yeast to local ranchers for cattle feed. The company, which has been employee owned since 2013, also works with the local utility through a Smart Meter program to reduce their energy consumption at peak times.

All of these efforts at doing good must come at a cost, right? Actually, research shows that companies that are committed to sustainability have superior financial performance, on average, relative to those that are not. In coming up with creative ways to reduce, reuse, and recycle, employees often also find ways to save money (like using biogas). In addition, organizations that strive to do good are often considered attractive and desirable places to work (especially by people who have similar values) and are also valued by the surrounding communities. As a result, employees in those organizations tend to be extremely committed to them, with high levels of engagement, motivation, and productivity. Indeed, it seems clear that the employees at the New Belgium Brewery are passionate about where they work and what they do. This passion generates value for the organization and proves that it is, in fact, possible to do well while having also made the decision to do good. And in the case of New Belgium Brewery, that means working to protect the environment while also making delicious beer.

1. What challenges does New Belgium Brewery face in pursuing environmental goals?
2. Can you think of any other examples of companies that try to “do good” while also doing well?
3. Would you like to work for an organization that is committed to something more than just profitability, even if it meant your salary or bonus would be smaller?

Sources: Karen Crofton, “How New Belgium Brewery leads Colorado’s craft brewers in energy,” GreenBiz, August 1, 2014, https://www.greenbiz.com/. Darren Dahl, “How New Belgium Brewing Has Found Sustainable Success,” Forbes, February 8, 2016, https://www.forbes.com/. Jenny Foust, “New Belgium Brewing Once Again Named Platinum-Level Bicycle Friendly Business by the League of American Bicyclists,” Craft Beer.com, February 18, 2016. Robert G. Eccles, Ioannis Ioannou, & George Serafeim, “The Impact of Corporate Sustainability on Organizational Processes and Performance,” Management Science, 60, 2014, https://doi.org/10.1287/mnsc.2014.1984. New Belgium Brewery Sustainability web page, http://www.newbelgium.com/sustainability, accessed September 18, 2017.

Managers at all levels must make decisions on behalf of a company. The difference between decisions at various levels lies in the scope of the choices made. Long-term decisions affecting the company as a whole belong to the highest management levels, while decisions affecting day-to-day operations fall to bottom management. All decisions relate directly or indirectly to broader management functions: planning, organizing, leading, staffing and controlling. Different management levels spend more time on certain functions than on others.

All business and management activity follows from a company’s mission – its reason for being in business. A company’s board or owners create the mission and write a mission statement for the internal and external audiences. Success in accomplishing the mission could take many forms. The form chosen gives a company its vision, an ideal the business seeks to actualize.

A caterer, for instance, might envision becoming the first choice for jet-set soirees. Besides defining a lofty ambition and the existential question of mission, a company’s board or owners also articulate a company’s core values, those standards the business will never compromise.

Upper management must translate the vast scope of mission and vision into concrete achievements over time. In other words, upper management needs a strategic plan. Decisions related to strategy involve company-wide matters enacted over the long term. The goals are what the company hopes to accomplish at least a year – more often five years – into the future.

Management then chooses a grand strategy, such as growth or diversification, to reach strategic goals. Of all management levels, upper managers spend the most time making decisions involving plans. They also have decision power over middle management.

Once upper management decides the overall direction of the company, it’s up to middle management to choose smaller tactical objectives that, put together, accomplish strategic goals. Middle managers create tactical plans, which have more detail than strategic plans. The tactics often are geared toward some function or department such as production, where a possible objective could involve some measurable efficiency or quality improvement.

Middle management’s choices and plans see fruition in a year or less. Managers in this tier oversee other middle managers or operational managers.

Also called first-line management, operational management is the level directly responsible for employees. By choosing their own goals on a daily, weekly or monthly basis, first-line management accomplishes the objectives of middle management. The scope of operational management covers departments, sections or teams.

Inventory, scheduling and budgeting are examples of plans and decisions that operational managers adopt. Goals might include a certain number of sales for the day.

Decision-making is a critical component of every manager’s day-to-day. Whether reshuffling the department’s budget, delegating tasks, or implementing a new strategy, the daily choices managers make have a direct impact on their organization’s success.

But that decision-making process isn’t always easy. In a survey by management consulting firm McKinsey, only 28 percent of executives touted the quality of their company’s strategic decisions, while 60 percent reported that bad decisions are about as frequent as good ones.

The Role of a Team in Decision-Making

One way to increase your likelihood of success is to include your team in the process. Research shows that diversity leads to better decision-making. By bringing people into the conversation with different disciplinary and cultural backgrounds, you can enhance creativity and gain a fresh perspective on the task or problem at hand.

“Map out the technical, political, and cultural underpinnings of the decision that needs to be made and then build your group accordingly,” says Harvard Business School Professor Len Schlesinger, who’s featured in the online course Management Essentials. “You’re looking for a broad array of experience. You want some newcomers who are going to provide a different point of view, as well as people who have profound knowledge and deep experience with the problem.”

Some managers might shy away from integrating their team into the process to avoid additional complexity or a potential clash of opinions. Yet the ideas that could come out of that dialogue are often far more valuable and critical to business success. Here’s a closer look at how successful team decision-making can benefit your organization.

Benefits of Team Decision-Making

1. Overcoming Consensus

Managers often defer to consensus, or the majority of opinion, to avoid conflict and foster group harmony. But Schlesinger argues that it’s not always the right choice.

“Consensus is likely to lead to a lower evaluation of the problem and a less creative solution,” Schlesinger says. “You need to be willing to engineer in conflict, which is often perceived as uncomfortable, but is essential to uncovering some of the hidden assumptions and data that leads people to make less-informed decisions.”

Schlesinger suggests one approach of establishing a process of devil’s advocacy and encouraging individuals to poke holes in arguments and problem framing. As a result, your team will likely conduct a more in-depth critical evaluation, which could lead to a greater number of alternative solutions.

“Managers often get to convergence too quickly, which is one of the most negative byproducts of the consensus-oriented model and why it’s only appropriate for the most simplistic decisions,” Schlesinger says. “Unless you’re intentional about trying to overcome consensus, you’re going to be stuck with it and then get a group together who’s going to manifest a decision-making process that’s essentially no better than what you would come up with by yourself.”

As a team leader, it’s critical to encourage diverse thoughts and opinions around the table to discover more innovative solutions.

2. Increasing Employee Engagement

By involving your team members in the decision-making process, you show that you trust and value their opinion, which is a key element of building employee engagement.

According to analytics and advisory firm Gallup, highly engaged employees produce substantially better outcomes, are more likely to stay at their organization, and experience less burn-out. They can’t reach that level, though, unless they feel invested in their work, are given opportunities to develop their strengths, and understand how their role contributes to the company’s overall success.

Every decision you’re asked to make is a moment for you to empower others on your team by leveraging their strengths, experiences, and expertise.

3. Enabling Collaboration and Communication

According to a Queens University of Charlotte study, nearly 75 percent of employers rate teamwork and collaboration as “very important,” yet 39 percent of employees say their organization doesn't collaborate enough. In a separate study, 86 percent of respondents attributed workplace failures to a lack of collaboration or ineffective communication.

By involving others in the decision-making process, you create an opportunity for colleagues to share ideas, learn from each other, and work toward a common goal. In turn, you foster collaboration and help break down organizational silos. You might even surface overlapping initiatives within the company, which could save the organization resources and employees from duplicating work.

Related: 7 Skills You Need to Effectively Manage Teams

4. Surfacing Your Own Blind Spots

Self-awareness is a vital management skill, and has proven to be what sets high performers apart in the workplace. It’s a core tenet of emotional intelligence and describes your ability to understand your strengths, weaknesses, and managerial tendencies.

While you might think you know your blind spots, research suggests otherwise. According to organizational psychologist Tasha Eurich, 95 percent of people think they’re self-aware, but only 10 to 15 percent actually are. Meaning, if you’re making every decision by yourself, there’s likely cultural, informational, or technical data you’re missing.

Involving your team in the decision-making process can help surface your blind spots and enable you to cultivate self-awareness in the process.

5. Getting Buy-In from the People Who Need to Implement

The people you include in the decision-making process should be those who need to implement the agreed-upon solution.

“Getting to the ‘right answer’ without anybody who is supporting it or having to execute it is just a recipe for failure,” Schlesinger says.

If, upfront, you assembled a team with an array of skills, experience levels, and backgrounds, established clear goals, and explored all viable solutions, you should reach a stage where you’re ready to not only make a decision but execute.

“In the general manager’s job, the quality of the decision is only one part of the equation,” Schlesinger says. “All of this is oriented toward trying to make sure that once a decision is made, you have the right groupings and support to implement.”

Related: 5 Tips to Becoming a Better Manager

Should You Always Involve Your Team in Decision-Making?

Managers might fear they’ll slow work down if they involve their team in every decision. When faced with the choice of involving your colleagues or going solo, you must determine whether there’s absolute clarity and enough widespread, shared data that the decision is on the cusp of obvious. Yet, even then, Schlesinger recommends bringing the issue to a group in a short meeting or touch base since these decisions likely affect every aspect of the organization.

“Even the most obvious of decisions analytically still have enormous consequences from an implementation perspective,” Schlesinger says. “I encourage people, for decisions that have reasonably significant organizational consequences, to recognize that the decision-making group has both analytical and executional responsibilities. Even if the analysis is obvious, the execution generally is not.”

What Are the Different Types of Decision-Making?

There are several important decisions leaders must make on a daily basis to maintain their organization’s success. As a manager, it’s important to find ways to involve your team in this critical decision-making process in some capacity, whether strategic, tactical, or operational.

• Strategic decision-making: Decisions that have a significant or long-term impact on the organization, such as department restructuring or acquiring a new client. Being transparent about bigger-picture decisions and long-term organizational goals is one way to show your team they have a say in the company’s future.
• Tactical decision-making: Topics of discussion that focus on the immediate steps your organization needs to take to achieve long-term goals, like hiring a new team member or intern. Since these are smaller actions that likely affect the team’s daily routine, their input is invaluable.
• Operational decision-making: Decisions that involve the team's high-volume, daily operational tasks. Team involvement is crucial because it encourages valuable ideas and possible solutions to make systems or processes run smoothly. Teams are likely to perform well when they’re involved in the day-to-day efficiency of the organization.

Improving the Decision-Making Process

Involving your team in the decision-making process can benefit your entire organization. The quality of the decisions made will improve because you’ll have the right mix of skills and expertise at the table, but you’ll also have the people in place who are prepared, and in sync on what, to implement.

Are you interested in further developing your managerial skills? Explore our eight-week online Management Essentials course, and discover how you can gain the tools and strategies to excel in decision-making, implementation, organizational learning, and change management.

This post was updated on June 6, 2022. It was originally published on March 5, 2020.