High Velocity Decision Making

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  • High Velocity Decision Making: Mastering the Art of Speed and Agility in Business

    Published Business Architects, on 27 March 2023

    A closer look at Amazon’s high-velocity decision-making model, championed by Jeff Bezos, and its impact on the company’s meteoric rise.

    In today’s fast-paced business landscape, speed and agility are critical factors for success. High-velocity decision making — the ability to make quick, informed decisions — has emerged as a powerful tool for organisations seeking to thrive in this dynamic environment. Amazon, the global e-commerce and technology giant, serves as a prime example of a company that has leveraged high-velocity decision making to achieve exceptional growth. This article will explore the concept of high-velocity decision making, its application at Amazon under Jeff Bezos’ leadership, and the lessons other organisations can glean from this approach.

    The Power of High-Velocity Decision Making

    High-velocity decision making is characterized by the ability to make rapid, informed decisions while minimizing bureaucratic obstacles. This approach prioritizes action and agility, enabling organisations to adapt to changing circumstances, seize opportunities, and respond quickly to threats.

    Amazon, under the leadership of founder and former CEO Jeff Bezos, has become synonymous with high-velocity decision making. Bezos has consistently emphasized the importance of making swift decisions, famously noting that “speed matters in business.” In his 2016 letter to Amazon shareholders, Bezos outlined several key principles that underpin the company’s decision-making approach:

    • Type 1 and Type 2 decisions: Bezos distinguishes between two types of decisions: Type 1 decisions, which are consequential and difficult to reverse, and Type 2 decisions, which are less critical and easily reversible. By recognizing the difference between these decision types, organisations can dedicate more time and resources to Type 1 decisions while swiftly making and learning from Type 2 decisions.
    • The 70% rule: Bezos encourages leaders to make decisions when they have approximately 70% of the information they wish they had. Waiting for 90% or more of the information can result in lost opportunities and slower innovation. By making decisions with 70% of the information, organisations can act quickly while still basing their decisions on a solid foundation of data.
    • Disagree and commit: To promote faster decision making, Bezos advocates for a “disagree and commit” approach, in which individuals can openly express their disagreement with a decision but commit to supporting it once it has been made. This strategy encourages open debate while ensuring that the organisation can move forward swiftly once a decision has been reached.

    Lessons from Amazon’s High-Velocity Decision-Making Model

    Organisations seeking to embrace high-velocity decision making can learn from Amazon’s success in implementing this approach. Key lessons include:

    • Foster a culture of empowerment and ownership: Empower employees at all levels of the organisation to make decisions, fostering a sense of ownership and accountability. This approach can help to reduce bureaucracy and enable faster, more agile decision making.
    • Embrace calculated risks: Encourage a culture of experimentation and calculated risk-taking. By embracing failure as an opportunity for learning and growth, organisations can accelerate innovation and drive continuous improvement.
    • Focus on data-driven decision making: Leverage data and analytics to inform decision making, while also recognizing the importance of intuition and experience. Strive to balance the need for data-driven insights with the need for speed and agility.
    • Invest in technology and automation: Utilize technology and automation to streamline decision-making processes, reducing manual tasks and enabling faster, more informed decision making.

    The Road to High-Velocity Decision Making

    As the business world continues to evolve at an ever-accelerating pace, high-velocity decision making has become a crucial factor in maintaining a competitive edge. By embracing the principles of high-velocity decision making, organisations can adapt more effectively to shifting market conditions, seize opportunities, and drive innovation.

    The road to high-velocity decision making requires organisations to foster a culture of empowerment, risk-taking, data-driven insights, and technological investment. By adopting these principles, businesses can accelerate their decision-making processes, enhance their agility, and ultimately achieve greater success in today’s dynamic and ever-changing global landscape.

    In conclusion, high-velocity decision making is not just a strategy; it is a mindset that permeates an organisation’s culture, empowering individuals to act quickly and decisively. By learning from Amazon’s experience and embracing the principles championed by Jeff Bezos, organisations can unlock the full potential of high-velocity decision making and position themselves for sustained growth and success in the face of constant change and uncertainty.

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