How decisions are made in a decentralised organisation

Published on
July 4, 2023

Decision-making is an essential part of any organisation. To move an organisation forward, decisions need to be made and actioned. How those decisions are made is an important piece of the puzzle.

In traditional management hierarchy, big organisational decisions are usually left to those at the top, following a downward chain of command. But in a decentralised organisational structure, when we consciously choose to distribute authority to all members, everyone is accountable for making decisions. And because of that, everyone needs to know how to make good decisions.

This starts with breaking down the different types of decisions: consent-based organisational decisions, and role-based operational decisions. This article explores how these two types of decision-making work together and why they’re both needed in self-organisation. Both types of decisions focus on progress over perfection and encourage people to think more objectively about making decisions rather than basing them on their personal preferences.

How operational role-based and consent decision-making work together

For self-organisation to work well, operational decision-making needs to be rooted in roles. Each role is filled by an expert who is knowledgeable and trusted to make decisions without asking for approval from their peers. However, one prerequisite is that decisions are made transparently so that anyone impacted by the decision can speak up and act. Also, even though you don’t need approval, inviting and integrating the insight and perspectives of your peers is very much valuable and encouraged.

Each role comes with a purpose, a set of accountabilities and possible domains. This gives both the role filler and their peers full clarity on what is expected of them and how this role contributes to the larger organisational purpose.

There are situations, however, when a more structured decision-making process is beneficial. For example, when proposing any changes to shared agreements, policies and governance (i.e. roles and circles). This is where a consent decision-making process is valuable.

Consent decision-making is when you process whether there are any significant objections before making a decision. However, you do not require an agreement to finalise a decision. This differs from consensus decision-making when you seek agreement before finalising a decision. A downside of consensus decision-making is that it’s easy to fall into circular conversations where any disagreement creates the need for repeated conversations.

Integrated Decision-Making (IDM), Sociocratic consent and some forms of DAO voting are all examples of consent-based decision-making.

In self-organisation, it’s beneficial to employ a combination of role-based operational decision-making together with organisational consent decision-making: consent decision-making for setting and changing governance, and role-based decision-making for daily operational decisions. This empowers experts to do the work they are good at in pursuit of purpose, while ensuring that any operational authority wielded by them is checked through a decentralised process without bosses and managers.

Setting and changing governance

Governance is an essential element of self-organisation. It provides a set of agreements, roles/circles, domains and policies for governing and operating the organisation. Every team member can alter the company’s structure and organisation-specific policies in self-governing organisations. But there is a process to follow, which most often is consent-based decision-making.

There are different types of decision-making processes that are based on consent. One example is Holacracy’s Integrated Decision-Making (IDM). IDM centres proposals that can be made by any role filler. The proposal is then tested for potential harm to the organisational purpose. If no harm is found, it will be accepted. It’s mostly used to propose changes to existing governance, though some organisations also use the method for some operational decisions.

Here are a few pros and cons of IDM:

The pros:

  • Addresses role needs.
  • Focuses on minimum viable decisions so members can respond as soon as possible rather than spending time trying to find the perfect next step or solution.
  • Follows a clearly defined process.
  • Puts authority on those most affected by the problem or opportunity.
  • Allows input from all roles.
  • Has certain boundaries for what warrants an objection, to prevent invisible hierarchies from forming or members from objecting for personal reasons.

The cons:

  • If not experienced, the process can be confusing and frustrating.
  • Requires a skilled facilitator to prevent personal character traits or those with special interests from taking over. While this is useful for most meetings, it is a set requirement in IDM.
  • At the end of the day, the process has authority over making the decision, and other members can sometimes feel like their feedback was disregarded if the decision doesn’t please them.

Regardless of the type of consent-based decision-making the organisation follows, most changes to governance are done via governance meetings. More practised teams can process proposals asynchronously if they have the right tools in place. Through these meetings and proposals members can:

  • Create, remove, or modify the roles of the circle
  • Create, remove, or modify the policies of the circle
  • Elect people to the elected core roles of the circle (Facilitator, Secretary, and Circle Rep)

Nestr’s governance meeting support lets members use their consent structure of choice, giving facilitators clear guides on the process to follow. The content of the agenda thus gets processed and the undercurrents kept at bay.

If you’re ready to try out making asynchronous consent decisions, Nestr allows you to craft and propose those too. This is especially useful for organisations spread across many time zones – which is often the case for DAOs.

Operational decisions guided by roles

As much as possible, operational decisions should be made autonomously by role fillers. Any person can do anything they deem needed for their role unless specified otherwise through governance, as long as they do so transparently. Operational decisions are guided by alignment with the organisation's purpose and governed by shared agreements.

Making good operational decisions “on-the-fly” starts with clearly-defined roles and accountabilities. Roles need to be rooted in governance to ensure residual power dynamics and invisible hierarchies no longer impact organisational decision-making.

Role-fillers then have the authority to lead decision-making for areas covered by their accountabilities without requiring approval from the wider organisation. However, consulting the wider organisation can be a great idea to be able to integrate varied perspectives.

Clearly-defined roles also help members know when a decision needs to be made by someone else  ̶  for example, which role has accountability for that decision. It’s important to remember that just because something falls into your orbit doesn’t necessarily mean you need to deal with it. With clarity of roles, you can easily distinguish between a decision you need to make and one you should pass on.

Defining roles helps everyone figure out where work lives and genuinely know the answer to “who cares about this?” so that you can send the work to the right role.

Nestr helps with self-organisation by providing a tool that makes it easy to create roles and circles, assigning certain accountabilities to each. Members can then work around clearly defined roles while collaborating and aligning through shared agreements and strategies. With Nestr, everyone can easily know what’s going on in the greater organisation and what’s expected of their role. This makes it easier for individual members to act on operational decision-making that moves the organisation forward.

Meetings and facilitation of operational decision-making

Meetings are also an important part of operational decision-making. They tend to follow a common structure of check-in, sharing metrics and progress information, building and processing the agenda, and check-out.

It’s important in self-organisation to create a space for members to feel comfortable and safe enough to fully show up in their roles. The common meeting structure of giving people turns in a round and normalising everyone adding items to the agenda contributes to this sense of safety.

The need for personal connection and trust

When (inter)personal tensions inevitably arise, it’s important to create a context or meeting to process this explicitly. In conventional organisations, the hierarchy often creates clarity on whose tensions are heard and whose are ignored. In the absence of this hierarchy, (inter)personal tensions can linger and prevent work from being done.

It’s important that members can connect with each other outside of their roles to better be able to learn and grow together as humans, beyond the work they’re doing.

This personal connection leads to greater trust, which is an essential element for distributed teams to be successful. Members don’t always have to agree with decisions, but it’s important that they trust that the person accountable for the decision knows what they are doing.

Nestr: A structured place for decision-making

The benefits of allowing all members of an organisation to have a say in issues and projects that affect them are immeasurable. Having the authority to make decisions is essential for self-actualization and results in contributions never deemed imaginable when confined to a management hierarchy. Consent-based decision-making helps to ensure that decisions are made with relevant input being heard and possible harm mitigated. It allows all that are impacted or affected by the decision to partake. It places higher value on trying things out and learning from its impact.

Leaning on the resulting agreements and governance of these consent-based decisions, experts in roles can make autonomous decisions in pursuit of organisational purpose without lengthy bureaucratic processes or consensus-seeking holding them back. It’s the best of both worlds, in pursuit of a better world.

However, creating an environment where everyone feels comfortable expressing their honest view is essential. This is done by ensuring each decision-making process is facilitated by an experienced facilitator.

Nestr provides a safe and structured space for organisations to better their decision-making processes. Both for role-based operational decisions and consent-based governance decisions. Good decisions in self-organisation starts with clearly defined roles and accountabilities.

To learn more about how Nestr helps self-organisations, check out: Introducing Nestr: Decentralised governance and project management tool

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