What is the decision equilibrium point?

As discussed in “Why can’t we make decisions?” when organizations are structured in vertical functional silos, a right of veto for each participant in a cross department (silo) decision is created. Therefore, when someone says, “no”, the other party escalates up the management line. If the escalation point was a common manager the resolution would be easy. The manager would listen to both sides of the discussion and make a decision.

The problem with the vertical structure is many times the “common” manager is the CEO. For example, the sales teams report up to the EVP of Sales, the services teams report up to the EVP of Service and the product team report up to the EVP of Products.

Imagine a decision that needs three groups or more to agree and they can’t. We now have our decision being escalated up both sides of the vertical silos because there is no common manager to make the decision. From team members, to Managers, to General Managers, to Vice Presidents. Usually at about this level the type of decision being made looks ridiculous to escalate any further and we hit the decision equilibrium point. There still isn’t a single manager who can make the decision but to escalate any further is admitting that you can’t work together. The tension between, not wanting to appear as if " you are not doing your job", and not “giving in” to the other departments forces a compromise, and the decision is made. It may not be the best choice for the overall good of the organization, but that is lost in the process.