Jeff Bezos couldn’t have gotten to the heights he’s achieved by keeping a firm hold on all the decisions Amazon has to make. Like many other aspects of leadership, the Amazon CEO has thought carefully about the intersection of making decisions and empowering others to do so, which can be difficult to discern.
Bezos often shares his leadership principles in his annual shareholder letters and in one such letter, he addressed this topic. Bezos explained the two types of decisions that exist and how, especially as organizations get bigger, leaders can get lost in what to decide themselves and what to empower others to decide.
First, Bezos said he believes there are two types of decisions. The first kind are decisions that become irreversible turning points for an organization. He calls these “Type 1” decisions, and there’s no coming back from them. Top executives should be involved in these, deliberating slowly, intentionally, and with a lot of input. They must be careful not to delegate decisions that simply must be made by them due to their experience, perspective, and need for accountability to ultimately own all such critical decisions.
The second type of decision, which he refers to as “Type 2,” are those that others can be empowered to make; decisions that the organization can reverse if they turn out to be incorrect. They’re more executional in nature and these decisions can and should be made quickly by high judgment individuals or small groups.
Bezos believes that as organizations get larger, there’s a tendency to use the heavy-weight Type 1 decision-making process on most decisions, including many Type 2 decisions.
This means that many high-level leaders are taking time to make decisions that could most likely be effectively made by other lower-level employees. Bezos wrote that not being able discern between these decisions and act accordingly can lead to stagnation and risk aversion.
The very best leaders know the difference between types of decisions, and have the discipline to empower as much as appropriate.
Leaders that hoard decision-making send a signal that they don’t trust their organization or believe in their capabilities. The lack of empowerment makes the organization feel undervalued and under developed, as leaders are made when they get the opportunity to make decisions and learn from the outcomes.
I’ve worked for leaders like this before and can say that the decision-hoarding behavior is often accompanied by one of three different character flaws. The decision-hoarder has an enormous ego (he/she thinks they know it all), is a control freak (not wanting to cede control of anything), or is actually insecure (not wanting to come across as incapable by delegating a prime source of their power — making decisions). None of these attributes help the leader or the culture.
On the other side, leaders that delegate decisions they should be making themselves often end up interfering in the decision-making process later on or even unwinding the decision made by the empowered. The company ultimately suffers as decisions requiring more experience are delegated, often to a less than optimal outcome.
I’ve personally experienced this as well, where leaders weren’t engaged enough to own decisions they should be making, or where they wanted to be organizational heroes and champions of empowerment, but didn’t discern that the organization really needed them to make the decision.
So there is such a thing as empowering too much.
While not always easy, keeping the appropriate balance between Type 1 and 2 decisions is what the very best leaders do well. So be a Type A personality and get to work on getting the mix right, right away.