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ArticleDecision rights: the hidden cost of slow approvals
Many organisations are slow not because people work slowly but because it is unclear who may decide. How to map decisions, remove layers and set clear limits.
Ask managers why things take so long and you will hear about workload, systems and resourcing. Look closely at where the time actually goes and a different picture often emerges. Work is finished, but it waits: for a signature, for a committee, for a manager who is travelling, for someone to confirm who is allowed to say yes.
Many organisations are slow not because people work slowly but because it is unclear who may decide. The cost rarely appears in any report. It shows up as missed opportunities, frustrated customers, capable staff who leave, and senior leaders whose diaries are full of approvals that should never have reached them.
Where the time goes
Consider a typical request to hire a replacement for a departing team member in a mid-sized business. The line manager writes a request. Their manager approves it. Finance checks the budget. Human resources checks the grade. A divisional director signs off. In some organisations, a central headcount committee reviews it monthly. Each step may take only minutes of actual work, but the request can spend weeks waiting between steps.
The same pattern appears in pricing exceptions, supplier onboarding, small capital purchases, customer refunds, contract changes and marketing spend. The work itself is quick. The waiting is slow.
Unclear decision rights add a further layer of delay. When people do not know whether they are allowed to decide, they escalate to be safe. Managers who receive the escalation may not know either, so they escalate again. Decisions drift upwards until they reach someone senior enough to feel comfortable, often far more senior than the decision warrants.
Map the real decisions
List the ten decisions that happen most often or cost most when delayed. Record who decides and who must approve.
Do not start with an organisation-wide authority matrix. Those documents tend to be long, out of date and widely ignored. Start instead with the handful of decisions that matter most to speed, and map how they really work today, not how the policy says they should.
- Ask managers and front-line staff which decisions they wait for most often, and which delays cause the most harm to customers or costs.
- Choose the ten that come up most frequently or carry the highest cost of delay.
- For each, trace a few recent real examples: who proposed, who reviewed, who approved, and how long each step took.
- Record the formal rule alongside what actually happened. The gap is often revealing.
- Note where nobody was sure who had authority, and where approvals were sought out of caution rather than requirement.
This exercise usually takes a few weeks and produces a short, practical map. It also builds the case for change, because it puts real elapsed times next to the actual work involved.
Remove layers
Each approval layer adds days. Keep layers only where they reduce real risk.
Approval layers accumulate over time, usually for understandable reasons. A costly mistake leads to a new sign-off. A new leader wants visibility, so is added to the chain. A compliance concern adds a check. Rarely is a layer removed when the original reason has passed.
For each layer in each mapped decision, ask a simple question: what risk does this step reduce, and how often does it change the outcome? If an approver almost always agrees, and the decision is low risk, the layer is costing time without adding protection. Removing it, or replacing it with after-the-fact reporting, speeds the decision without increasing risk.
- Keep layers where errors are costly, hard to reverse or carry legal or safety consequences.
- Replace prior approval with reporting where errors are small and easily corrected.
- Combine sequential reviews into a single review where several functions need to check the same thing.
- Set a time limit for approvals, after which the request is treated as approved unless the approver objects.
The rubber-stamp test
If an approver has signed off on more than nineteen out of twenty requests of a given type in the past year without change, the approval is probably not managing risk. It is managing comfort. Consider replacing it with clear limits and periodic review.
Set limits
Give people clear financial and risk limits so they can decide without asking.
Clear limits are the most effective way to speed decisions while keeping control. A sales manager who knows they can approve discounts of up to a set percentage on orders below a set value will decide on the spot. One who is unsure will ask, and the customer will wait.
Good limits are specific, written down and easy to find. They cover money, but also other forms of risk: contract terms, customer commitments, hiring and supplier choice. They are set at the level where the person has the information and judgement to decide well, which is often lower than current practice suggests.
Limits work best when paired with transparency. People decide within their limits and record what they decided. Managers review a summary periodically, looking for patterns rather than approving each case. If someone’s decisions consistently cause problems, the limit can be adjusted for them. If they are consistently sound, the limit can rise.
We raised the refund limit for our service team and put a weekly summary in front of the operations manager. Complaints resolved on first contact went up sharply, and refund costs did not.
Customer service director, retail client
Keep decision rights current
Decision rights drift. Organisations grow, restructure, add products and change leaders, and the informal habits of who decides what shift with them. A map that was accurate two years ago may now describe a structure that no longer exists.
Review the key decisions annually, or whenever the organisation changes materially. Include decision rights in the induction of new managers, so they know what they can approve and what they cannot. And when a decision is escalated, ask whether it needed to be. Repeated unnecessary escalations are a sign that limits are unclear or set too low.
Where to begin
Pick one decision that frustrates customers or staff, such as a pricing exception, a refund or a small purchase. Trace five recent examples and measure how long each spent waiting. Then remove one layer or set one clear limit, and measure again after a month. A single visible improvement builds the support needed to tackle the next nine.
Source: Intelliversal analysis.
