I recently read The speed trap: Exploring the relationship between decision making and temporal context by Perlow, Okhuysen  & Repennning.

This paper describes a nineteen-month ethnographic research project undertaken by one of the authors (with assistance from a research assistant) studying a ‘dot-com’ company during the late 1990’s.  This company, given the name ‘Notes.com’ for the purposes of the research paper, was a start-up company who began with initial seed money, moved into venture capital money and was eventually bought out for $125 million by another ‘dot-com’.

As mentioned, the research was conducted using the ethnographic research method with a researcher spending twenty to forty hours per week with the company and, in addition, a research assistant spending sixty hours per week observing the organization.  During this time spent observing, the researcher was focused on decision-making speed and how this speed might affect performance.   To perform this study, the researcher and assistant had access to the entire senior leader meeting as well as all documents available to any of the senior leadership of the organization.

After completing the research project and performing an initial review of the collected data, the authors found two findings that stood out.  The first was that the speed of the decision making process increased dramatically over the life of company while the second finding showed that the process used to make decisions changed significantly during the research project (Perlow, Okhuysen, & Repennning, 2002).  These two findings are discussed briefly in the following paragraphs.

The first major finding showed a dramatic increase in decision speed through the life of the organization. The authors used ‘strategic decisions’ as the object to be measured and defined these decisions as those that involved “novelty, complexity and open-endedness” (Mintzberg, Raisinghani, & Theoret, 1976, p. 250).  Using these criteria, the authors were able to identify thirty-eight strategic decisions during a nine-month period during the research project.  Out of these thirty-eight strategic decisions, 24% of these decisions made during the first five and one-half months (hereafter known as the first-half) of the project and 76% of these decisions occurring during the last three and one-half months of the project (hereafter known as the second-half) (Perlow, et al., 2002).

With these thirty-eight decisions selected, the authors reviewed the amount of time the senior leaders spent in meetings discussing these decisions.  For the first-half decisions, the Notes.com leadership team spent an average of 208 minutes of meeting time while during the second-half the leadership team spent an average of 58 minutes of meeting time (Perlow, et al., 2002).    While this isn’t proof that the ability to make decisions increased for the senior leadership team, it does show that less time was spent on making decisions during this time and that more strategic decisions were made during a shorter period of time.

The second major finding by the authors claim to show that the process by which the Notes.com senior leadership made decisions changed.   Using the same data as above, the authors reviewed the meetings and compared the process for decision making in the first-half to the decisions making process in the second-half and found that the process changed dramatically.  During the first-half, the senior leaders discussed and debated issues and spent time reviewing options while during the second-half, senior leaders made more decisions with little discussion or debate.

While the authors claim that the speed at which decisions were made as well as the decision making process negatively affected Notes.com decision making abilities and ultimately the future of the company, I have to wonder if the senior leadership team wasn’t employing the fast decision making process described by Eisenhardt (1989). This fast decision-making process is claimed by Eisenhardt to be the main factor in success in high-velocity environments, which the ‘dot-com’ industry most certainly was in the late 1990’s.

While this paper touches on an interesting topic, I fail to see the connection between speed of decisions and ultimate failure of Notes.com.  The authors do not go into detail on the background of the senior leadership team nor their experience in running startups.  The authors also fail to include which of the senior leaders are involved in the decision making during the first- and second-half of the period reviewed.  Does the speed of the decisions made during the second-half show that the senior leadership team has matured and/or more senior leaders are involved? These types of questions bring the outcome of this research project into question.

References

• Eisenhardt, K. (1989). Making Fast Strategic Decisions in High-Velocity Environments. The Academy of Management Journal, 32(3), 543-576.
• Mintzberg, H., Raisinghani, D., & Theoret, A. (1976). The structure of” unstructured” decision processes. Administrative Science Quarterly, 21, 246-274.
• Perlow, L. A., Okhuysen, G. A., & Repennning, N. P. (2002). The speed trap: Exploring the relationship between decision making and temporal context. Academy of Management Journal, 45(4), 931-955.