One day last fall, Air Transat flight TSC157 left Brussels around 9 a.m. ET, and was scheduled to land in Montreal at approximately 3 p.m. After circling Montreal's airport due to poor weather conditions, the pilot was forced to divert and land in Ottawa instead. The plane sat on the tarmac for six hours. Passengers waited without electricity or air conditioning (though they were given water), and were not allowed to get off the plane.
In the end, the fault was found to the be airline's. Apparently, the plane's front-line staff (pilots and flight attendants) didn't have the authority to allow the overheated passengers off the plane, and no one at the airline with that authority could be reached. Air Transat was fined $295,000 (about $229,000 in U.S. dollars) for the incident.
This is not a story about airlines, weather, or even delays. It is a story about discretionary authority, which every company needs, and the lack of which was what led to this colossal failure of customer service and to the eventual fine.
What is discretionary authority?
Discretionary authority is the power given to employees to make official decisions, using their reason and judgment to choose from several acceptable alternatives. As a business scales up, founders have to cede control to employees, or risk their agility and responsiveness. It is fine for a founder to make decisions when there are five members on the team, but less practical when there are 500 employees (Air Transat has more than 5,000).
In order to ensure reasonable, efficient delivery of services at scale, organizations must develop standards and systems. But sometimes these are so rigidly applied that they miss the subjective context necessary for good decision-making. Front-line employees often have a much better understanding of day-to-day operations than the people in the C-suite. This means they are actually the ones who would be able to make the fastest and best-informed decisions, but often corporate processes and procedures simply don't allow them to do so.
Why does discretionary authority matter?
The majority of today's organizations have a centralized authority that holds most of the decision-making power. Employees have to seek approval from the top before they can make important decisions. If you have ever been put on hold by a telephone customer service rep while they "go talk to their manager," you know exactly what I'm talking about. Things get done, but lots of people get frustrated by the rigidity or complexity of the process. Even worse, these outdated processes and procedures often undermine an organization's bottom line.
Alternatively, when an employee has the authority to make a decision, they feel more empowered. Empowering employees increases staff morale, increases the level of employee engagement in the business, and, most importantly, often leads to better decision-making and higher satisfaction among employees and customers.
8 ways to implement better discretionary authority
With all this in mind, here are eight things you can do to master discretionary authority at your organization.
- Don't give orders; create guidelines. Instead of trying to create an all-encompassing set of rules and procedures consider creating guidelines, under which good decisions can be made by front-line staff.
- Set the tone early. Start at recruitment and never stop. If you hire automatons to execute your instructions unquestioningly, that is exactly what you will get. Instead, seek staff that think for themselves and have a track record of making smart decisions on the fly.
- Connect the front line to the bottom line. Help front-line workers see how their decisions relate to the overall goals of the organization. Help them connect their micro actions to macro success.
- Create clear boundaries. Explicitly inform staff that they have discretionary authority, then be clear how and when (and why) it should be deployed. Show which areas are appropriate for such authority and which are not.
- Make room for errors. The worst thing you can do is second-guess front-line staff, even when they make a bad decision. Instead, each decision should be reviewed collectively post facto. Better that staff make an occasional bad decision than make no decision at all. Don't penalize staff for doing what they think is best in the moment.
- Create an advice process. Decisions are always enhanced when more than one person is involved. The pilots and flight team on that delayed Air Transat flight should have had an internal dialogue on how best to approach the decision.
- Forgo standards. No situation is identical, so applying or trying to apply a standard across all situations is a recipe for disaster.
- Put budget behind it. Training staff, holding debriefs, and learning from failures and successes costs money, but the amount it costs is almost always less than the profit it generates.
You have worked hard to build a great organization. Letting go of command and control is often not easy, especially when the original founder is still leading the venture. But scale requires evolving how you do things. With that in mind, let a change in empowerment through discretionary authority be your next strategy.