AU T H O RS
D EC I S I O N MAKING
Linda A.
Hill
Professor,
Harvard
Business
School
Emily
Tedards
Research
associate,
Harvard
Business
School
Taran
Swan
Managing
partner,
Paradox
Strategies
Drive Innovation
with Better
Decision-Making
Don’t let old habits
undermine
your organization’s
creativity.
P H OTO G R A P H E R MAT TIA BALSAMINI
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I D E A IN BRIEF
THE PROBLEM
Despite their embrace of
agile and lean methodologies, many organizations looking to become
more innovative are
still struggling to move
quickly on new ideas.
That’s often because
of their outdated,
inefficient approach to
decision-making.
THE RESEARCH
Over the past two decades the authors have
worked with innovative
companies across the
globe, most recently
focusing on incumbent
firms that were transforming themselves into
nimbler businesses, to
learn what key challenges
they faced and how they
addressed them.
THE SOLUTION
Businesses need to
strengthen and speed up
their creative decision-
making processes by
including diverse
perspectives, clarifying
decision rights, matching
the cadence of decisions
to the pace of learning,
and encouraging candid,
robust conflict in service
of a better experience for
the end customer. Only
then will all that rapid
experimentation pay off.
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ABOUT THE ART
Mattia Balsamini photographed equipment at the teaching
labs at Eni Corporate University, which trains the energy
company’s workforce, in Cortemaggiore, Italy.
To stay competitive,
today’s business
leaders are investing
millions in digital tools,
agile methodologies,
and lean strategies.
Too often, however, those efforts produce neither the breakthrough operational processes nor the blockbuster business
models companies need—at least not before their competitors introduce their own advances. And a key culprit is the
inability to make quick and effective innovation decisions.
The discovery-driven innovation processes companies
now rely on involve an unprecedented number of choices,
from big go/no-go gates that govern which ideas are pursued
to countless decisions about how to conduct experiments,
what data to collect, how to interpret findings, and how
to act on them. But in companies that are just learning to
experiment, too many decisions are made inefficiently or
informed by past experience and narrow perspectives. As
a result, critical risks aren’t identified, and bad ideas hang
around forever, eating up scarce resources and crushing the
chances of bigger, more-transformative bets.
Take Pfizer. (One of us, Hill, has been a paid adviser to the
company over the years.) In 2015 the pharmaceutical giant
kicked off a digital transformation effort in its Global Clinical
Supply (GCS) arm, which delivers more than a million doses
of investigative medicines to thousands of clinical sites in
over 70 countries each year. Doing so while maintaining
DECISION-MAKING
clinical trial integrity is a complex task. Any issue, such as
inadequate refrigeration, unclear instructions for medical
professionals, or patients’ failure to comply with regimens,
could delay the development of potentially lifesaving treatments. By 2018, GCS had made significant progress with its
digital initiatives. But with new medical and digital technologies on the horizon, Pfizer’s strategy changed to focus
exclusively on breakthrough drugs and vaccines. GCS needed
to become ever more agile, innovative, and patient focused so
that it could adapt to myriad clinical-site and patient needs.
Findings from a cultural survey, however, underscored that
the organization was struggling to make good, timely decisions about systems, processes, and capability innovations.
So GCS altered its approach on a number of fronts,
creating cross-functional teams that were responsible for
key decisions, changing the frequency of decision-making
meetings, and improving team members’ ability to robustly
debate ideas. Those efforts paid off when Covid hit: Thanks
in no small part to the quick-footed support of GCS, the first
emergency authorization of the Pfizer-BioNTech vaccine
was granted only 266 days after the declaration of the
pandemic. (GCS’s journey in advance of the pandemic will
be described throughout this article; for more on the race
to make the vaccine, see “The CEO of Pfizer on Developing
a Vaccine in Record Time,” HBR, May–June 2021.) GCS’s
success at rapidly delivering tens of thousands of doses of
the vaccine candidates and collaborating with colleagues
across Pfizer to develop solutions to the thorny challenge
of preserving them at subzero temperatures is just the most
prominent of its many recent innovation achievements,
which range from real-time tracking of trial-drug shipments
to personalized tests for cutting-edge therapies.
We’ve spent almost two decades studying leaders at highly
innovative organizations and, more recently, incumbent
firms that are on their way to becoming innovation powerhouses. When we looked closely at 65 of the companies that
were on the journey to becoming more nimble, we found that
the more successful ones were applying many agile and lean
principles to decision-making itself. In this article we’ll show
what that means: including diverse perspectives, clarifying
decision rights, matching the cadence of decision-making
to the pace of learning, and encouraging candid, healthy conflict in service of a better experience for the end customer.
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D EC I S I O N – M A K I N G
DIVERSE PERSPECTIVES
Research has long shown that diverse teams are better at
identifying opportunities and risks in any problem-solving
situation. But in organizations that are learning to experiment, four perspectives tend to be underrepresented in
decision-making:
The customer perspective. It’s hardly a surprise that the
customer needs to be at the heart of all decisions, whether
they’re about new products, business models, or internal
processes. But we find that customer intimacy is all too rare.
Because of that, firms end up chasing problems that don’t
really matter to customers and miss opportunities to address
their unarticulated pain points and desires.
The solution here is to include in your decision-making
processes the people who are most closely connected with
end customers: frontline operations staff, customer service
employees, salespeople, and the customers themselves.
Organizations that are good at this also tend to work closely
with user experience or user interface teams, ethnographic
researchers, or experts in human-centric design. And if
you’re developing a new business process or a digital tool for
employees, remember that their voices need to be heard—
in this case they are the customers who will use it.
To represent the voices of patients in clinical trials and
the health care professionals working directly with them,
Pfizer’s GCS unit created a new function, Clinical Research
Pharmacy, and recruited pharmacists (who had prior experience administering the treatments) to join it. Over time, the
CRP came to play an integral role in decision-making at GCS.
Its pharmacists’ insights have led to innovations ranging
from user-friendly package designs to virtual-reality training for health care providers.
The local perspective. Too often decisions in global companies are made at headquarters without adequately taking
into account perspectives from different geographies. Yet
people at headquarters rarely have the contextual intelligence
required to judge which new business models, services, or
operations are best suited to a local economy and regulatory
environment. Getting local input can make a big difference.
At GCS, strategic decisions, even those that affected
regional operations, had been made principally by U.S.
teams. But once the unit began deliberately soliciting ideas
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How to Avoid Common Traps
A number of traditional
decision-making habits can
hinder agile decision-making.
They need to be unlearned.
Don’t let leaders and
experts dominate.
More often than not, at the end
of decision-making processes,
one individual confidently
makes the final call. This frequently stems from something
innocuous: a respect for expertise. The problem is, experts
can quickly become naysayers
who shut down conversation.
That’s dangerous since they’re
often the most wedded to the
status quo. Imagine a team
with one digital expert who
dismisses others’ ideas about
technology as naive or infeasible. No one wants to look
ill-informed, so team members
are likely to keep silent.
To combat this, experts
should be asked to provide evidence for their points of view
just like everyone else, keeping
the argument rooted in fact
rather than opinion or politics.
Some leaders remove them-
selves from the process once
the problem has been framed,
letting their teams make the
ultimate choice. Leaders
often tell us it can be hard to
stay quiet; Jessie Woolley-
Wilson, the CEO of the ed-tech
company DreamBox Learning, admits, “I am the worst
practitioner of that because
I get so excited and want to
bring energy to the discussion.”
But she reminds herself, “My
goal is to make fewer and fewer
decisions.”
Don’t let people go
along to get along.
Compromise to avoid conflict
can be superficial—everyone
agrees while in the room but
disagrees after leaving it—and
it usually prioritizes employees’ needs over customer
experience. A good way to
avoid this problem is to have
proponents of each alternative make the case for other
options. That helps all involved
broaden their points of view,
empathize with the logic of
their teammates, and make
from local managers, empowering them to innovate, it saw
impressive improvements. For instance, when a new Latin
America–based team was established, it used its expertise to
cut the time it took to get trial medicines to local health care
providers and patients from 55 to 20 days.
Even more prevalent is the failure to transfer local
insights back to a business’s core processes and products.
Often small divisions in small markets can be quicker and
more innovative than their larger counterparts in home
markets. For example, eBay’s successful Buy It Now button,
which revolutionized e-commerce and helped shopping
move online, was developed by eBay Germany and was
based on its deep relationships with its user communities.
The data-informed perspective. Especially in years
like the past one, when the business environment was in
constant flux, relying on past experience to guide innovation efforts may lead a company astray. Lean methods call
sure they really understand
an idea before discarding it.
People should be encouraged
to ask questions like “What
am I not seeing?” and “Where
is my expertise creating blind
spots?” and open-ended
“what-if” questions to help
them let go of any assumptions
constraining their thinking.
Avoiding compromise
can lead to novel solutions.
In one company we studied,
the marketing and product
divisions were deadlocked over
a new service that the product
team envisioned offering
through the company’s mobile
app. The marketing division
believed it wouldn’t bring in a
large-enough return to justify
the costs of adding it to the
app. The service went nowhere
for nearly three years, until
the company brought in a new
innovation leader who asked,
“What if we promoted the
service somewhere other than
the app?” The ultimate solution
this prompted was neither a
compromise nor one of the two
original options: The team de-
veloped the service and touted
it over SMS and email. Ultimately, its success provided
the data the marketing team
needed to confidently add the
feature to the mobile app.
Don’t let people make a
decision prematurely.
Decision-makers trying to
keep up with the pace of
change typically lean toward
urgency. But even in an agile
framework, the leader’s role is
to sense when more learning
or synthesis of ideas is necessary and encourage patience.
At P&G, when a team wants
to scale up a new product idea,
its executive sponsor requires
evidence that the product
offers an “irresistibly superior
experience” to customers.
If the results look promising
but not compelling enough
to support a launch, teams
are encouraged to continue
to incubate the idea. Running
additional experiments and
collecting more data often
leads to pivots that increase
the value proposition.
for testing ideas and using near-real-time quantitative and
qualitative data to decide next steps. The challenge lies in
making that information accessible to every decision-maker.
Data visualization provides a solution: It can allow timely,
complex information to be interpreted by people from a
variety of functional backgrounds, leveling the playing field
so that those who are less data savvy can fully engage when
making decisions.
At GCS, a new digital-business-operations group created
visual dashboards that superimposed information about
events such as weather, flight, and shipping route disruptions over supply chain data to predict risks to operations
in real time. These dashboards, which were accessible to all
team members, proved invaluable at the daily “light speed”
meetings held to respond to the Covid crisis as it upended
supply chains, shut down borders, and overwhelmed the
hospitals running Pfizer’s clinical trials. GCS teams were
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able to make critical decisions about the processes for
supplying ongoing trials across the globe, including those
for the new Covid vaccine candidates and antivirals. Despite
the logistical challenges brought on by the pandemic and
natural disasters from wildfires to hurricanes, the organization didn’t miss a single delivery to trial patients.
The outside perspective. Even the best-intentioned
innovators can get mired in their companies’ dominant
logic. Leaders of incumbent firms, especially ones that are
still growing, albeit slowly, tend to reject bold ideas—ideas
that present high risk as well as high reward, require new
resources or capabilities, or threaten to cannibalize the core
business. An outside view can help organizations contemplate those moves more seriously.
That outside view can come from within the company,
however. GCS invited high-potential talent from other parts
of Pfizer to join its leadership team permanently, increasing
the group from six to 16 members. Many leaders at other firms
ask less-experienced, recently hired employees to attend
C-suite meetings. Because these people aren’t steeped in the
company’s inner workings, they ask questions that challenge
core assumptions and help reframe strategic choices.
An outside perspective can also come from beyond
the company’s walls or even its industry. GCS, for example, invited people from Delta Air Lines’ innovation lab
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to participate in a design workshop on the clinical trial
experience for patients. Delta’s boarding-pass scanner and
bag-tracking capabilities sparked ideas for new ways that
GCS could enhance its own shipment-tracking capabilities,
ensuring that more patients got the right dose of the right
drug at the right time.
CLEAR DECISION RIGHTS
As they recognize the need to bring together many points of
view, a lot of organizations are relying more on decentralized
networks of cross-functional teams, both permanent and ad
hoc, to increase their agility. But this can have a downside:
Involving more voices in a decision can mean less clarity
about who ultimately owns it, slowing the innovation process and often prompting frustration and disengagement.
For example, when executives at a financial services
firm asked their high-potential team leaders to identify and
pursue new business models, the results were disappointing.
The team leaders didn’t understand that they’d been given
the authority to make decisions themselves and often came
back to the executives and suggested options to choose
from, rather than proposing an intended plan of action. The
team leaders also had a mixed experience. At first they were
honored and energized by being selected for an innovative
project. But later they became discouraged by the disconnect
between their recommendations and the decisions of the
executives—who’d fallen back into their habit of calling the
shots—and ultimately, by the ambiguity about decision-
making rights.
To effectively empower decision-makers, leaders must
be explicit in every case about who will be responsible for
executing the decision, who will be accountable for making
it, who will be consulted, and who will be informed. (Creating
and sharing a traditional RACI chart can do the trick here.)
If leaders are delegating decisions to a group, they should
specify the process to be used and the parameters of the
group’s authority for everyone involved.
GCS transferred ownership of the investigative drug
supply from a single leader to cross-functional teams of four
known as “tetrads.” Each tetrad became responsible for one
therapeutic area. The members were collectively accountable
for decisions, and they had clear guidelines about when they
should escalate a decision to the tetrad’s executive sponsors.
It took some months for everyone involved to feel confident
about the new structure and to refine the guidelines, but
ultimately the tetrads helped GCS kill less-promising ideas
faster, without having to push those choices up to senior
leadership. With their enterprisewide view, the teams were
also able to begin proposing more-innovative ideas for
optimizing the whole clinical supply chain, such as how to
pioneer delivery of highly personalized gene-therapy drugs.
THE RIGHT CADENCE
Established companies tend to make innovation decisions
on a fixed schedule, through quarterly or annual reviews at
which senior teams step back, assess past plans, and make
new ones. But in agile companies, innovation is based on
discovery-driven learning. With each experiment, data and
insights emerge that should be taken into consideration in
setting up the next one. Leaders must encourage decisions
to be made at a pace aligned with the learning cycle.
To gauge the right cadence for your meetings, think
about how long it will take to gather enough data to
validate (or disprove) your hypotheses. If you’re learning
quickly or confronting rapid change, you may need to
make decisions more frequently. During the pandemic, for
example, most leadership teams at companies we observed
naturally increased the cadence of meetings. Given the
unfolding nature of the crisis, every decision had to be
considered a “working hypothesis,” so they opted for short
sessions daily over longer ones every few weeks. Many
told us they hope to stick with the new, faster rhythm even
after the pandemic is over.
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Why Focus on Decision-Making?
C
RE RE A T
S O IV E
LUT
ION
SHAR
VALU ED
ES
In more-recent research,
we’ve found that companies
trying to become more
innovative tend to do better at
the cultural factors but have
weaker capabilities, including
decision-making.
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(T H A G E M F
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FACILITATES
ITY
ER
TRIC
TOM CEN
CUS IMACY/
INT
78
IMPEDES
S FOR
RESOURCE N
O
INNOVATI
Inviting diverse sets of participants to well-timed decision-
making forums doesn’t automatically lead to the thorough
vetting of ideas. This is where so many organizations get
stuck: They fail to create a competitive marketplace of ideas,
where genuine debate increases the odds that risks are identified and the most-promising projects are pursued.
In some dysfunctional teams, productive discourse is
stymied by political infighting, defensive behavior, or hidden
agendas. Critiques of ideas often become critiques of personalities, and employees don’t trust that their ideas will be
taken seriously. Often any real conversations and decisions
happen “outside the room,” so members of the group feel disenfranchised even though they’ve been asked to participate.
Yet an even more common cause of unproductive debate
is a culture of politeness. Many people try to minimize
differences as opposed to amplifying them, in an effort to
avoid conflict. The effect is that those with minority views
don’t speak up or compromise too quickly when they’re
challenged. As a result bosses or experts tend to dominate
the decision-making process no matter how diverse the
assembled group is.
AR
SH POSE
R
PU
Capa
bili
CREA ties
ABRA TIVE
SIO
N
IVE
EAT
CR GILITY
A
GOOD FIGHTS
ture
Cul ED
F
SO T
R U L E E M E N N)
E N G A G A C TI O
(I N T E R
The many decisions that come up daily in experimentation often call for continuous processes. For example, in
one Indian organization we studied, the design team created
a WhatsApp forum to collect rapid feedback on its proposals
from the whole organization, including remote employees
working closely with end users in the field. Because the
channel was always available, designers could spontaneously
solicit feedback from employees and apply it to decisions
immediately.
But longer timelines can still be needed to create the
space necessary for collaboration and information gathering,
especially if you’re contemplating big bets. When Kathy Fish,
P&G’s former chief research, development, and innovation
officer, introduced the lean start-up model to her organization, the business units supplemented their annual planning
processes with a review of innovation portfolios every 90
days in order to issue metered funding to the initiatives in
them. That gave teams enough time to conduct experiments
and consolidate findings while preserving their momentum.
GCS/Pfizer
Impact on innovation
Extent to which a
characteristic impedes or
facilitates innovation
MARKETPLA
OF IDEAS CE
D EC I S I O N – M A K I N G
In our almost 20 years of research with organizations across the
globe, we have identified the most important factors that support
innovation—whether it’s the invention of new product or service
offerings, business processes or models, or ways of organizing or
cutting costs. They include both cultural factors and capabilities.
Creative abrasion
is the ability to
generate a marketplace
of ideas through
discourse and debate.
Creative agility
is the ability to do
discovery-driven
learning.
Creative resolution
is the ability to make
decisions that combine
disparate and
sometimes even
opposing ideas.
Additional factors
include decisionmaking basics,
customer intimacy, and
innovation investment.
* Decision-making capabilities
When innovation is called for, leaders need to create environments
in which their people can find answers on their own.
In both kinds of situations, leaders must stop worrying
about whether people can collaborate and instead worry about
whether they know how to argue. Leaders can encourage the
psychological safety that promotes good fights in three ways:
Ask questions. Leaders need to avoid shutting down the
conversation with solutions from the outset. Instead, they
should be transparent about what they don’t know. At P&G
(which has also hired Hill as an adviser in the past), leaders
are encouraged to ask these four questions in response to
every experiment: What did you learn? How do you know?
What do you need to learn next? How can I help? By demonstrating that they don’t have all the answers, leaders help set the
expectation that all present should share their opinions and
that anyone can be wrong. They also create an environment in
which people feel more comfortable challenging one another.
At Pfizer, team members were initially reluctant to disagree
with vice president Michael Ku when he became the head
of GCS. But as he learned to admit what he didn’t know and
adopted the habit of being the last person to share his thoughts
in meetings, they became more comfortable speaking up.
Focus on the data. Data can provide a solid foundation
for productive debate. Team members who have the same
data visualizations in front of them are likelier to develop
a shared understanding of problems—common ground on
which they can add their unique perspectives. Ku ensured
that all decisions made at GCS’s monthly operational review
were informed by data. When things had to move quickly
during Covid, this kept the team from making choices based
on emotion or past experiences that were no longer relevant.
Articulate a shared purpose. Aligning the whole organization around a common, meaningful purpose (why we
exist and whom we serve) gives people permission to fight
about new ideas, because they all agree about what they’re
fighting for. Ideally the purpose will serve as a framework
that ensures that decisions benefit the end user or customer.
A shared ambition can keep debates from getting personal.
At one retail company we studied, a team created avatars for
key customer segments. “Ali” was the avatar for urban Millennials, for instance. Whenever a discussion started to get
more personal than substantive, someone would intervene
and ask, “What does Ali need from us all right now?” That
encouraged the team to focus on a joint concern for customers
instead of descending into a winner-takes-all argument.
A purpose can also encourage criticism rather than silent
politeness. A real challenge in companies learning to be agile
is killing “walking zombies”—projects without enough value
to justify their continuation. To meet it, leaders should remind
teams of their purpose. When Ku first took the reins at GCS,
most people were reluctant to criticize others’ ideas. Decision-
makers interpreted silence as agreement that an idea was
worth pursuing, so the number of projects underway became
overwhelming. Ku’s first priority was to align the entire team
around a shared purpose: “Patients First.” In debates about
which initiatives to pursue, people learned to ask, “Is that the
best solution for the patient?” rather than staying silent. The
team soon found itself rejecting more ideas and able to focus
more effort on those that enhanced the patient experience.
A common purpose helps decision-makers focus on solving problems rather than fulfilling personal agendas. In the
midst of Covid, while everyone was working 24/7, Ku observed
with pride that leaders in GCS were advocating for decisions
that were in the best interests of the patient even when doing
so meant more work for their own functional areas.
LEADERSHIP MATTERS
Organizations and teams must adopt new behaviors to make
informed decisions more quickly, but managers need to
change, too. Too many leaders act unilaterally, swooping in
to save the day with the “right” answers—especially during a
crisis. But when innovation is called for, leaders need to create
environments in which their people can find answers on their
own. It takes courage and practice to step back and let others
make decisions and especially to avoid taking the bait when
teams naturally try to delegate up the chain. But until you
adopt this new way of working yourself, your organization will
HBR Reprint R2106D
never be as innovative as it could be.
LINDA A. HILL is the Wallace Brett Donham Professor of
Business Administration at Harvard Business School. She is
the author of Becoming a Manager and a coauthor of Being the
Boss and Collective Genius. EMILY TEDARDS is a research associate
at Harvard Business School. TARAN SWAN is a managing partner
at Paradox Strategies, a provider and creator of advisory services,
experiences, and tools that enable organizations to navigate the
paradoxes of leadership, innovation, and diversity.
Harvard Business Review
November–December 2021
79
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D EC I S I O N MAKING
Linda A.
Hill
Professor,
Harvard
Business
School
Emily
Tedards
Research
associate,
Harvard
Business
School
Taran
Swan
Managing
partner,
Paradox
Strategies
Drive Innovation
with Better
Decision-Making
Don’t let old habits
undermine
your organization’s
creativity.
P H OTO G R A P H E R MAT TIA BALSAMINI
70
Harvard Business Review
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Harvard Business Review
November–December 2021
71
I D E A IN BRIEF
THE PROBLEM
Despite their embrace of
agile and lean methodologies, many organizations looking to become
more innovative are
still struggling to move
quickly on new ideas.
That’s often because
of their outdated,
inefficient approach to
decision-making.
THE RESEARCH
Over the past two decades the authors have
worked with innovative
companies across the
globe, most recently
focusing on incumbent
firms that were transforming themselves into
nimbler businesses, to
learn what key challenges
they faced and how they
addressed them.
THE SOLUTION
Businesses need to
strengthen and speed up
their creative decision-
making processes by
including diverse
perspectives, clarifying
decision rights, matching
the cadence of decisions
to the pace of learning,
and encouraging candid,
robust conflict in service
of a better experience for
the end customer. Only
then will all that rapid
experimentation pay off.
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November–December 2021
ABOUT THE ART
Mattia Balsamini photographed equipment at the teaching
labs at Eni Corporate University, which trains the energy
company’s workforce, in Cortemaggiore, Italy.
To stay competitive,
today’s business
leaders are investing
millions in digital tools,
agile methodologies,
and lean strategies.
Too often, however, those efforts produce neither the breakthrough operational processes nor the blockbuster business
models companies need—at least not before their competitors introduce their own advances. And a key culprit is the
inability to make quick and effective innovation decisions.
The discovery-driven innovation processes companies
now rely on involve an unprecedented number of choices,
from big go/no-go gates that govern which ideas are pursued
to countless decisions about how to conduct experiments,
what data to collect, how to interpret findings, and how
to act on them. But in companies that are just learning to
experiment, too many decisions are made inefficiently or
informed by past experience and narrow perspectives. As
a result, critical risks aren’t identified, and bad ideas hang
around forever, eating up scarce resources and crushing the
chances of bigger, more-transformative bets.
Take Pfizer. (One of us, Hill, has been a paid adviser to the
company over the years.) In 2015 the pharmaceutical giant
kicked off a digital transformation effort in its Global Clinical
Supply (GCS) arm, which delivers more than a million doses
of investigative medicines to thousands of clinical sites in
over 70 countries each year. Doing so while maintaining
DECISION-MAKING
clinical trial integrity is a complex task. Any issue, such as
inadequate refrigeration, unclear instructions for medical
professionals, or patients’ failure to comply with regimens,
could delay the development of potentially lifesaving treatments. By 2018, GCS had made significant progress with its
digital initiatives. But with new medical and digital technologies on the horizon, Pfizer’s strategy changed to focus
exclusively on breakthrough drugs and vaccines. GCS needed
to become ever more agile, innovative, and patient focused so
that it could adapt to myriad clinical-site and patient needs.
Findings from a cultural survey, however, underscored that
the organization was struggling to make good, timely decisions about systems, processes, and capability innovations.
So GCS altered its approach on a number of fronts,
creating cross-functional teams that were responsible for
key decisions, changing the frequency of decision-making
meetings, and improving team members’ ability to robustly
debate ideas. Those efforts paid off when Covid hit: Thanks
in no small part to the quick-footed support of GCS, the first
emergency authorization of the Pfizer-BioNTech vaccine
was granted only 266 days after the declaration of the
pandemic. (GCS’s journey in advance of the pandemic will
be described throughout this article; for more on the race
to make the vaccine, see “The CEO of Pfizer on Developing
a Vaccine in Record Time,” HBR, May–June 2021.) GCS’s
success at rapidly delivering tens of thousands of doses of
the vaccine candidates and collaborating with colleagues
across Pfizer to develop solutions to the thorny challenge
of preserving them at subzero temperatures is just the most
prominent of its many recent innovation achievements,
which range from real-time tracking of trial-drug shipments
to personalized tests for cutting-edge therapies.
We’ve spent almost two decades studying leaders at highly
innovative organizations and, more recently, incumbent
firms that are on their way to becoming innovation powerhouses. When we looked closely at 65 of the companies that
were on the journey to becoming more nimble, we found that
the more successful ones were applying many agile and lean
principles to decision-making itself. In this article we’ll show
what that means: including diverse perspectives, clarifying
decision rights, matching the cadence of decision-making
to the pace of learning, and encouraging candid, healthy conflict in service of a better experience for the end customer.
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D EC I S I O N – M A K I N G
DIVERSE PERSPECTIVES
Research has long shown that diverse teams are better at
identifying opportunities and risks in any problem-solving
situation. But in organizations that are learning to experiment, four perspectives tend to be underrepresented in
decision-making:
The customer perspective. It’s hardly a surprise that the
customer needs to be at the heart of all decisions, whether
they’re about new products, business models, or internal
processes. But we find that customer intimacy is all too rare.
Because of that, firms end up chasing problems that don’t
really matter to customers and miss opportunities to address
their unarticulated pain points and desires.
The solution here is to include in your decision-making
processes the people who are most closely connected with
end customers: frontline operations staff, customer service
employees, salespeople, and the customers themselves.
Organizations that are good at this also tend to work closely
with user experience or user interface teams, ethnographic
researchers, or experts in human-centric design. And if
you’re developing a new business process or a digital tool for
employees, remember that their voices need to be heard—
in this case they are the customers who will use it.
To represent the voices of patients in clinical trials and
the health care professionals working directly with them,
Pfizer’s GCS unit created a new function, Clinical Research
Pharmacy, and recruited pharmacists (who had prior experience administering the treatments) to join it. Over time, the
CRP came to play an integral role in decision-making at GCS.
Its pharmacists’ insights have led to innovations ranging
from user-friendly package designs to virtual-reality training for health care providers.
The local perspective. Too often decisions in global companies are made at headquarters without adequately taking
into account perspectives from different geographies. Yet
people at headquarters rarely have the contextual intelligence
required to judge which new business models, services, or
operations are best suited to a local economy and regulatory
environment. Getting local input can make a big difference.
At GCS, strategic decisions, even those that affected
regional operations, had been made principally by U.S.
teams. But once the unit began deliberately soliciting ideas
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How to Avoid Common Traps
A number of traditional
decision-making habits can
hinder agile decision-making.
They need to be unlearned.
Don’t let leaders and
experts dominate.
More often than not, at the end
of decision-making processes,
one individual confidently
makes the final call. This frequently stems from something
innocuous: a respect for expertise. The problem is, experts
can quickly become naysayers
who shut down conversation.
That’s dangerous since they’re
often the most wedded to the
status quo. Imagine a team
with one digital expert who
dismisses others’ ideas about
technology as naive or infeasible. No one wants to look
ill-informed, so team members
are likely to keep silent.
To combat this, experts
should be asked to provide evidence for their points of view
just like everyone else, keeping
the argument rooted in fact
rather than opinion or politics.
Some leaders remove them-
selves from the process once
the problem has been framed,
letting their teams make the
ultimate choice. Leaders
often tell us it can be hard to
stay quiet; Jessie Woolley-
Wilson, the CEO of the ed-tech
company DreamBox Learning, admits, “I am the worst
practitioner of that because
I get so excited and want to
bring energy to the discussion.”
But she reminds herself, “My
goal is to make fewer and fewer
decisions.”
Don’t let people go
along to get along.
Compromise to avoid conflict
can be superficial—everyone
agrees while in the room but
disagrees after leaving it—and
it usually prioritizes employees’ needs over customer
experience. A good way to
avoid this problem is to have
proponents of each alternative make the case for other
options. That helps all involved
broaden their points of view,
empathize with the logic of
their teammates, and make
from local managers, empowering them to innovate, it saw
impressive improvements. For instance, when a new Latin
America–based team was established, it used its expertise to
cut the time it took to get trial medicines to local health care
providers and patients from 55 to 20 days.
Even more prevalent is the failure to transfer local
insights back to a business’s core processes and products.
Often small divisions in small markets can be quicker and
more innovative than their larger counterparts in home
markets. For example, eBay’s successful Buy It Now button,
which revolutionized e-commerce and helped shopping
move online, was developed by eBay Germany and was
based on its deep relationships with its user communities.
The data-informed perspective. Especially in years
like the past one, when the business environment was in
constant flux, relying on past experience to guide innovation efforts may lead a company astray. Lean methods call
sure they really understand
an idea before discarding it.
People should be encouraged
to ask questions like “What
am I not seeing?” and “Where
is my expertise creating blind
spots?” and open-ended
“what-if” questions to help
them let go of any assumptions
constraining their thinking.
Avoiding compromise
can lead to novel solutions.
In one company we studied,
the marketing and product
divisions were deadlocked over
a new service that the product
team envisioned offering
through the company’s mobile
app. The marketing division
believed it wouldn’t bring in a
large-enough return to justify
the costs of adding it to the
app. The service went nowhere
for nearly three years, until
the company brought in a new
innovation leader who asked,
“What if we promoted the
service somewhere other than
the app?” The ultimate solution
this prompted was neither a
compromise nor one of the two
original options: The team de-
veloped the service and touted
it over SMS and email. Ultimately, its success provided
the data the marketing team
needed to confidently add the
feature to the mobile app.
Don’t let people make a
decision prematurely.
Decision-makers trying to
keep up with the pace of
change typically lean toward
urgency. But even in an agile
framework, the leader’s role is
to sense when more learning
or synthesis of ideas is necessary and encourage patience.
At P&G, when a team wants
to scale up a new product idea,
its executive sponsor requires
evidence that the product
offers an “irresistibly superior
experience” to customers.
If the results look promising
but not compelling enough
to support a launch, teams
are encouraged to continue
to incubate the idea. Running
additional experiments and
collecting more data often
leads to pivots that increase
the value proposition.
for testing ideas and using near-real-time quantitative and
qualitative data to decide next steps. The challenge lies in
making that information accessible to every decision-maker.
Data visualization provides a solution: It can allow timely,
complex information to be interpreted by people from a
variety of functional backgrounds, leveling the playing field
so that those who are less data savvy can fully engage when
making decisions.
At GCS, a new digital-business-operations group created
visual dashboards that superimposed information about
events such as weather, flight, and shipping route disruptions over supply chain data to predict risks to operations
in real time. These dashboards, which were accessible to all
team members, proved invaluable at the daily “light speed”
meetings held to respond to the Covid crisis as it upended
supply chains, shut down borders, and overwhelmed the
hospitals running Pfizer’s clinical trials. GCS teams were
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75
able to make critical decisions about the processes for
supplying ongoing trials across the globe, including those
for the new Covid vaccine candidates and antivirals. Despite
the logistical challenges brought on by the pandemic and
natural disasters from wildfires to hurricanes, the organization didn’t miss a single delivery to trial patients.
The outside perspective. Even the best-intentioned
innovators can get mired in their companies’ dominant
logic. Leaders of incumbent firms, especially ones that are
still growing, albeit slowly, tend to reject bold ideas—ideas
that present high risk as well as high reward, require new
resources or capabilities, or threaten to cannibalize the core
business. An outside view can help organizations contemplate those moves more seriously.
That outside view can come from within the company,
however. GCS invited high-potential talent from other parts
of Pfizer to join its leadership team permanently, increasing
the group from six to 16 members. Many leaders at other firms
ask less-experienced, recently hired employees to attend
C-suite meetings. Because these people aren’t steeped in the
company’s inner workings, they ask questions that challenge
core assumptions and help reframe strategic choices.
An outside perspective can also come from beyond
the company’s walls or even its industry. GCS, for example, invited people from Delta Air Lines’ innovation lab
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November–December 2021
to participate in a design workshop on the clinical trial
experience for patients. Delta’s boarding-pass scanner and
bag-tracking capabilities sparked ideas for new ways that
GCS could enhance its own shipment-tracking capabilities,
ensuring that more patients got the right dose of the right
drug at the right time.
CLEAR DECISION RIGHTS
As they recognize the need to bring together many points of
view, a lot of organizations are relying more on decentralized
networks of cross-functional teams, both permanent and ad
hoc, to increase their agility. But this can have a downside:
Involving more voices in a decision can mean less clarity
about who ultimately owns it, slowing the innovation process and often prompting frustration and disengagement.
For example, when executives at a financial services
firm asked their high-potential team leaders to identify and
pursue new business models, the results were disappointing.
The team leaders didn’t understand that they’d been given
the authority to make decisions themselves and often came
back to the executives and suggested options to choose
from, rather than proposing an intended plan of action. The
team leaders also had a mixed experience. At first they were
honored and energized by being selected for an innovative
project. But later they became discouraged by the disconnect
between their recommendations and the decisions of the
executives—who’d fallen back into their habit of calling the
shots—and ultimately, by the ambiguity about decision-
making rights.
To effectively empower decision-makers, leaders must
be explicit in every case about who will be responsible for
executing the decision, who will be accountable for making
it, who will be consulted, and who will be informed. (Creating
and sharing a traditional RACI chart can do the trick here.)
If leaders are delegating decisions to a group, they should
specify the process to be used and the parameters of the
group’s authority for everyone involved.
GCS transferred ownership of the investigative drug
supply from a single leader to cross-functional teams of four
known as “tetrads.” Each tetrad became responsible for one
therapeutic area. The members were collectively accountable
for decisions, and they had clear guidelines about when they
should escalate a decision to the tetrad’s executive sponsors.
It took some months for everyone involved to feel confident
about the new structure and to refine the guidelines, but
ultimately the tetrads helped GCS kill less-promising ideas
faster, without having to push those choices up to senior
leadership. With their enterprisewide view, the teams were
also able to begin proposing more-innovative ideas for
optimizing the whole clinical supply chain, such as how to
pioneer delivery of highly personalized gene-therapy drugs.
THE RIGHT CADENCE
Established companies tend to make innovation decisions
on a fixed schedule, through quarterly or annual reviews at
which senior teams step back, assess past plans, and make
new ones. But in agile companies, innovation is based on
discovery-driven learning. With each experiment, data and
insights emerge that should be taken into consideration in
setting up the next one. Leaders must encourage decisions
to be made at a pace aligned with the learning cycle.
To gauge the right cadence for your meetings, think
about how long it will take to gather enough data to
validate (or disprove) your hypotheses. If you’re learning
quickly or confronting rapid change, you may need to
make decisions more frequently. During the pandemic, for
example, most leadership teams at companies we observed
naturally increased the cadence of meetings. Given the
unfolding nature of the crisis, every decision had to be
considered a “working hypothesis,” so they opted for short
sessions daily over longer ones every few weeks. Many
told us they hope to stick with the new, faster rhythm even
after the pandemic is over.
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Why Focus on Decision-Making?
C
RE RE A T
S O IV E
LUT
ION
SHAR
VALU ED
ES
In more-recent research,
we’ve found that companies
trying to become more
innovative tend to do better at
the cultural factors but have
weaker capabilities, including
decision-making.
EN RULE
SO
G
(T H A G E M F
IN K E N T
IN G)
AL
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A D DIT T O RS
FAC
All firms
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IVE
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& C TIV
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IVE A
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RS
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FACILITATES
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ER
TRIC
TOM CEN
CUS IMACY/
INT
78
IMPEDES
S FOR
RESOURCE N
O
INNOVATI
Inviting diverse sets of participants to well-timed decision-
making forums doesn’t automatically lead to the thorough
vetting of ideas. This is where so many organizations get
stuck: They fail to create a competitive marketplace of ideas,
where genuine debate increases the odds that risks are identified and the most-promising projects are pursued.
In some dysfunctional teams, productive discourse is
stymied by political infighting, defensive behavior, or hidden
agendas. Critiques of ideas often become critiques of personalities, and employees don’t trust that their ideas will be
taken seriously. Often any real conversations and decisions
happen “outside the room,” so members of the group feel disenfranchised even though they’ve been asked to participate.
Yet an even more common cause of unproductive debate
is a culture of politeness. Many people try to minimize
differences as opposed to amplifying them, in an effort to
avoid conflict. The effect is that those with minority views
don’t speak up or compromise too quickly when they’re
challenged. As a result bosses or experts tend to dominate
the decision-making process no matter how diverse the
assembled group is.
AR
SH POSE
R
PU
Capa
bili
CREA ties
ABRA TIVE
SIO
N
IVE
EAT
CR GILITY
A
GOOD FIGHTS
ture
Cul ED
F
SO T
R U L E E M E N N)
E N G A G A C TI O
(I N T E R
The many decisions that come up daily in experimentation often call for continuous processes. For example, in
one Indian organization we studied, the design team created
a WhatsApp forum to collect rapid feedback on its proposals
from the whole organization, including remote employees
working closely with end users in the field. Because the
channel was always available, designers could spontaneously
solicit feedback from employees and apply it to decisions
immediately.
But longer timelines can still be needed to create the
space necessary for collaboration and information gathering,
especially if you’re contemplating big bets. When Kathy Fish,
P&G’s former chief research, development, and innovation
officer, introduced the lean start-up model to her organization, the business units supplemented their annual planning
processes with a review of innovation portfolios every 90
days in order to issue metered funding to the initiatives in
them. That gave teams enough time to conduct experiments
and consolidate findings while preserving their momentum.
GCS/Pfizer
Impact on innovation
Extent to which a
characteristic impedes or
facilitates innovation
MARKETPLA
OF IDEAS CE
D EC I S I O N – M A K I N G
In our almost 20 years of research with organizations across the
globe, we have identified the most important factors that support
innovation—whether it’s the invention of new product or service
offerings, business processes or models, or ways of organizing or
cutting costs. They include both cultural factors and capabilities.
Creative abrasion
is the ability to
generate a marketplace
of ideas through
discourse and debate.
Creative agility
is the ability to do
discovery-driven
learning.
Creative resolution
is the ability to make
decisions that combine
disparate and
sometimes even
opposing ideas.
Additional factors
include decisionmaking basics,
customer intimacy, and
innovation investment.
* Decision-making capabilities
When innovation is called for, leaders need to create environments
in which their people can find answers on their own.
In both kinds of situations, leaders must stop worrying
about whether people can collaborate and instead worry about
whether they know how to argue. Leaders can encourage the
psychological safety that promotes good fights in three ways:
Ask questions. Leaders need to avoid shutting down the
conversation with solutions from the outset. Instead, they
should be transparent about what they don’t know. At P&G
(which has also hired Hill as an adviser in the past), leaders
are encouraged to ask these four questions in response to
every experiment: What did you learn? How do you know?
What do you need to learn next? How can I help? By demonstrating that they don’t have all the answers, leaders help set the
expectation that all present should share their opinions and
that anyone can be wrong. They also create an environment in
which people feel more comfortable challenging one another.
At Pfizer, team members were initially reluctant to disagree
with vice president Michael Ku when he became the head
of GCS. But as he learned to admit what he didn’t know and
adopted the habit of being the last person to share his thoughts
in meetings, they became more comfortable speaking up.
Focus on the data. Data can provide a solid foundation
for productive debate. Team members who have the same
data visualizations in front of them are likelier to develop
a shared understanding of problems—common ground on
which they can add their unique perspectives. Ku ensured
that all decisions made at GCS’s monthly operational review
were informed by data. When things had to move quickly
during Covid, this kept the team from making choices based
on emotion or past experiences that were no longer relevant.
Articulate a shared purpose. Aligning the whole organization around a common, meaningful purpose (why we
exist and whom we serve) gives people permission to fight
about new ideas, because they all agree about what they’re
fighting for. Ideally the purpose will serve as a framework
that ensures that decisions benefit the end user or customer.
A shared ambition can keep debates from getting personal.
At one retail company we studied, a team created avatars for
key customer segments. “Ali” was the avatar for urban Millennials, for instance. Whenever a discussion started to get
more personal than substantive, someone would intervene
and ask, “What does Ali need from us all right now?” That
encouraged the team to focus on a joint concern for customers
instead of descending into a winner-takes-all argument.
A purpose can also encourage criticism rather than silent
politeness. A real challenge in companies learning to be agile
is killing “walking zombies”—projects without enough value
to justify their continuation. To meet it, leaders should remind
teams of their purpose. When Ku first took the reins at GCS,
most people were reluctant to criticize others’ ideas. Decision-
makers interpreted silence as agreement that an idea was
worth pursuing, so the number of projects underway became
overwhelming. Ku’s first priority was to align the entire team
around a shared purpose: “Patients First.” In debates about
which initiatives to pursue, people learned to ask, “Is that the
best solution for the patient?” rather than staying silent. The
team soon found itself rejecting more ideas and able to focus
more effort on those that enhanced the patient experience.
A common purpose helps decision-makers focus on solving problems rather than fulfilling personal agendas. In the
midst of Covid, while everyone was working 24/7, Ku observed
with pride that leaders in GCS were advocating for decisions
that were in the best interests of the patient even when doing
so meant more work for their own functional areas.
LEADERSHIP MATTERS
Organizations and teams must adopt new behaviors to make
informed decisions more quickly, but managers need to
change, too. Too many leaders act unilaterally, swooping in
to save the day with the “right” answers—especially during a
crisis. But when innovation is called for, leaders need to create
environments in which their people can find answers on their
own. It takes courage and practice to step back and let others
make decisions and especially to avoid taking the bait when
teams naturally try to delegate up the chain. But until you
adopt this new way of working yourself, your organization will
HBR Reprint R2106D
never be as innovative as it could be.
LINDA A. HILL is the Wallace Brett Donham Professor of
Business Administration at Harvard Business School. She is
the author of Becoming a Manager and a coauthor of Being the
Boss and Collective Genius. EMILY TEDARDS is a research associate
at Harvard Business School. TARAN SWAN is a managing partner
at Paradox Strategies, a provider and creator of advisory services,
experiences, and tools that enable organizations to navigate the
paradoxes of leadership, innovation, and diversity.
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November–December 2021
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