When Decisions Lose Their Context

There are certain experiences that stay with you throughout your career, not because they were particularly significant at the time, but because they continue to challenge your assumptions long after you've moved on.

Two of mine involved approval processes.

For a long time I regarded them as examples of completely different approaches to leadership. One belonged to a large multinational organisation with mature governance, sophisticated systems and carefully designed approval workflows. The other took place in a privately owned business where authority was concentrated far more heavily than I had ever experienced before. If someone had asked me then what those organisations had in common, I would probably have answered, "Very little."

It has taken me several years to realise that they were both exposing exactly the same organisational challenge.

The first experience came during the renewal of an important customer contract. Commercially, the discussions had gone well and both parties wanted to continue the relationship. One point, however, required an internal approval. The customer wanted to retain payment terms of ninety days from invoice. They were not asking for new concessions and we were not being asked to accept greater commercial risk. These were the payment terms under which the relationship had operated successfully for years. The request simply fell outside our standard policy and therefore required an exception.

The approval process itself was managed through Salesforce. As you would expect in a large organisation, the request travelled through a number of functions before a final decision could be made. Each person who reviewed it was acting professionally and doing exactly what the organisation expected of them. Nobody was trying to make life difficult and nobody was behaving unreasonably. Looking back, I don't think the process failed at all. It achieved precisely what it had been designed to achieve.

What stayed with me was something much subtler.

As the request moved from one approval to the next, I found myself wondering how much of the original situation was travelling with it. Each person could see that ninety-day payment terms represented an exception to policy. They could evaluate the financial implications of that exception. What they couldn't easily see was everything that sat behind it. They couldn't see the history of the customer relationship, the commercial discussions that had already taken place, the strategic importance of the account or the consequences of saying no. Had the request ultimately been rejected, we stood to lose a customer relationship representing around half a billion dollars of annual spend flowing through our business.

I remember leaving that process with the rather simplistic conclusion that this was simply the price large organisations paid for good governance. Complexity was unavoidable. It slowed decisions down, but perhaps that was the cost of operating at scale.

A couple of years later I joined a privately owned organisation and encountered something that initially felt equally uncomfortable, albeit for entirely different reasons.

Every hire, including junior analysts joining our Global Business Services centre in Kraków, required approval from a single individual. As a leader, I found that deeply frustrating. Building a team is one of the most important responsibilities any manager has, yet the final authority sat elsewhere. It felt highly centralised and, if I am honest, rather disempowering. I questioned the approach more than once and struggled to reconcile it with everything I believed about leadership and accountability.

Over time, however, I began to notice something that I had completely overlooked at the beginning.

Nobody ever questioned how a hiring decision would be made. There was no uncertainty about where authority sat, no informal lobbying before a request was submitted and no lengthy discussions about who ultimately owned the decision. Whether you agreed with the outcome or not, the process itself was remarkably clear. Everyone understood who was deciding and, perhaps more importantly, why that individual was making the decision.

At first I regarded these experiences as examples of opposite management philosophies. One relied heavily on governance and distributed authority. The other concentrated authority in one place. It was only after reflecting on both that I realised I had been comparing the wrong things.

What actually interested me was not where authority sat. It was what happened to the context surrounding a decision as that decision travelled through an organisation.

Every decision has two ingredients: authority and context. Most organisations spend far more time designing authority than preserving context.

We define approval limits, reporting lines and governance structures with considerable care. We are meticulous about who has the authority to decide, who must be consulted and who should be informed. Those questions matter because organisations need consistency and they need controls. As they grow, they also need specialisation. Finance, Legal, Procurement, HR and countless other functions all exist because expertise matters and because no single individual can reasonably understand every aspect of a complex business.

The difficulty is that context does not naturally organise itself along functional boundaries.

Customers do not experience a business one department at a time. Nor do strategic decisions arrive neatly packaged as financial, legal or operational questions. They arrive as messy, interconnected problems where the commercial reality is often inseparable from the operational one. Every time a decision passes from one function to another, there is a risk that some of that reality is left behind. Nobody intends for that to happen. In most cases it happens because each function quite understandably focuses on the part of the decision it has been asked to evaluate.

That, I suspect, is how organisations quietly become less effective.

The people remain capable. The governance becomes more sophisticated. The processes are refined and documented. Yet over time decisions can become increasingly detached from the circumstances they are intended to serve. The organisation does not become ineffective because people stop making good decisions. It becomes less effective because good people are sometimes asked to make important decisions without having access to enough of the story to exercise the judgement that their authority assumes they possess.

I don't think either of the organisations I worked for had found the perfect answer. One concentrated authority to an extent that inevitably limited empowerment. The other distributed authority through a governance model that, on occasion, allowed context to become diluted. Both approaches involved trade-offs and I would hesitate to argue that either represented a model others should simply copy.

What I have taken from those experiences is something rather different. Whenever I encounter an approval process today, I find myself asking a question that I probably wouldn't have considered earlier in my career. I am less interested in who has the authority to make the decision than I am in whether they still have enough context to make it well.

That seems to me a more difficult organisational problem to solve, but also a more important one. Authority can be delegated, centralised or distributed in almost endless ways. Context is much harder to preserve, and once it is lost, it is remarkably difficult to recreate from a spreadsheet, a workflow or an approval request.

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