By Sean Harper, CEO and co-founder at Kin Insurance.

I was in a meeting recently where a high-level employee said to me, "I think this is a decision you should make."

What he meant was that it was an important strategic decision that could have a significant impact on the overall performance of the business. What he also meant, I think, was that he'd prefer not to be on the hook for making the wrong decision.

I see this thinking fairly often: An employee is used to a setup where higher-ranking team members are in charge of making all the high-level decisions. They're used to being required to run things by their boss, who might have to run things by their boss.

But that's a terrible way to make decisions.

Having an Opinion vs. Having Enough Information

In that meeting I mentioned, I had an opinion on which direction would be best. It wasn't a baseless opinion by any means -- my team had briefed me on the situation and had presented me with the alternatives on the table.

But my opinion also wasn't the most valuable one because I wasn't the one with the most information.

This is something I think CEOs and founders get wrong a lot, especially when their companies are growing fast. When you start a company, you're used to having to make every decision by yourself. You're used to being a quasi-expert on everything.

It's exhausting. It's unsustainable. And it's really not a smart way to run a business in the long term.

Think about it this way: Most of us who own companies have worked within companies at some point. We've all experienced the frustration of the boss failing to understand the complexity of the work we do. Bosses who ignore the complexity of other people's work help foster feelings of frustration and irrelevance: "If he's just going to do what he wants," a frontline employee might say, "why should I bother parsing all this data and making these detailed recommendations?"

Nurture Good Decisions by Helping Employees See the Big Picture

There's a lot of buzz these days about transparency in business. If you want effective decision making at every level of your business, you have to commit to a certain level of transparency. After all, there are some cases where the decision that makes the most sense for the marketing team may actually undermine the company as a whole because it counteracts work being done by sales.

To ensure that decision makers throughout your company have adequate big-picture information to make smaller-picture decisions, business owners should follow these basic principles:

• Set clear performance goals for the company, the team and the individual. Your job is to set goals for the company. Then you help team leaders set goals for their teams that will get you to the company-level benchmarks. Make it clear to those leaders that they need to work with individual team members to identify personal performance goals that will get the teams where they need to be.

• Communicate relevant changes clearly and quickly. Nothing stands still in the startup world. Effective leaders have to figure out which communication channels work best for keeping stakeholders updated when a condition changes that will affect goals, ensuring that information gets out in a timely way and verifying that leaders adjust plans as needed.

• Be accountable and hold others accountable. Making decisions can be hard, and making the wrong decision can be a setback. But founders can lead by example, helping their teams understand the thought process behind major decisions and taking responsibility for negative outcomes. This is a crucial part of training your team and can be really hard for founders, especially for those who don't like to cede control. But learning to make decisions -- and dealing with the outcomes -- is an essential part of being effective in business.

Empowering everyone in your business to make decisions relevant to what they do forces them to fully engage with not only their work but also the impact that work has on the whole company. That kind of all-hands engagement is essential for any company that hopes to sustain the rapid growth and lean structure required to succeed in the startup world.

Sean Harper is CEO and co-founder at Kin Insurance.

Published on: Jun 14, 2018