Decision rights

What is meant by decision rights?

Decision rights define who holds the authority to make which decisions in an organization, and who gives input before they are made. Clear decision rights give each recurring question one owner and a known path to an answer. Unclear ones show up as decisions that stall, or that get reopened after someone thought they were settled. Tools such as Bain & Company's RAPID give each decision named roles.

Why it matters to a revenue leader

Price exceptions and non-standard contract terms each need a named owner, or deals wait while people work out who can say yes. Paul Rogers and Marcia Blenko argued in HBR that companies execute faster once they find where decisions get stuck and make clear who resolves them. A 2008 HBR article by Gary Neilson, Karla Martin and Elizabeth Powers, based on a survey of more than 125,000 employees, reported that people knowing which decisions and actions were theirs was the trait most common among organizations that executed well. In a buy-and-build platform, each acquired company arrives with its own habits about who approves price, so setting decision rights is part of building one sales standard.

A testing and inspection platform buys regional firms with different habits. In one, sellers set their own discounts. In another, the founder approves every quote. The CRO sets one approval path for price and contract terms across the platform, so a seller in any branch knows who can approve an exception.