After years of documenting key processes, re-writing job descriptions and automating org charts, many organizations still struggle to have clarity and alignment around roles, responsibilities, and authority. This impacts business processes, project execution and day to day decisions resulting in frustration, inefficiency and sometimes poor decision-making. We have seen this issue in action with our clients across many industries.
Several years ago, we were working with a major candy manufacturer. One of the key triggers for calling us in was the country president’s growing dissatisfaction with his organization’s inability to make decisions without bringing problems to him. One example that happened to be on his desk when we talked was a Halloween candy promotion with their biggest retail customer, Walmart. We eventually talked his team through the situation and discovered the core issues – three different managers each thought they should make the final decision, and they could cite their job descriptions to defend their position: The account manager for Walmart who was responsible for “maximizing revenue at his account,” the VP of Marketing who was responsible for “maintaining and improving our brand equity across the country” and the CFO who was responsible for “implementing our pricing strategy across channels and key customers.”
As one of them lamented to us, “lots of people can say ‘no,’ but no one is sure who can say ‘yes’”. This is one of the classic symptoms of unclear accountability and misaligned objectives. So, how do we solve this problem?
One approach for clarifying responsibilities is the RACI Matrix. There is no known inventor of the RACI, however it is documented that it was created some time in the 1950s and was in broad usage by the 1970s. A wide variety of companies have used RACI to simplify complex decisions and processes.
The RACI matrix (sometimes called RACI model or RACI chart) shows the different roles and expectations for critical key members assume in current processes, programs, or as part of a project or transformation.
RACI is an acronym that stands for:
- Responsible: This is the person or small group that is executing to get the job done. If several people are responsible for a task or activity, it’s best to assign one person who’s ultimately the lead for the work of the entire group.
- Accountable (Approver): This person approves the work or decision. It’s their head on the chopping block if something goes wrong.
- Consulted: These people should be consulted before certain work is performed or approved. They are typically subject matter experts.
- Informed: These are Stakeholders with no active participation in the project, don’t have to be consulted, but must be made aware of updates or decisions. Their input or feedback is generally not needed to keep a project going, but the outcome can have a direct or indirect impact on them.
While RACI has out-lived any number of management fads and buzzwords, like any technique it will work only if you use it thoughtfully. The key is collaborative effort – driving a robust discussion to anticipate potential conflicts and then sticking to the agreed upon rules. In fact, we would argue that if you use a different technique (not RACI) to have the robust discussion and stick to the agreed upon rules this would likely still lead your organization to the desired outcome.
Done right, the RACI framework can be a catalyst to get everyone on the same page, and provides the structure and direction your team needs to successfully run their key processes and functions. Specifically, a RACI process:
- Clarifies stakeholder roles and expectations
- Promotes accountability
- Reduces miscommunication
- Reduces conflict and inefficiency
It is important to remember, RACI is a framework not a magic wand. There are many things that RACI won’t fix, including faulty strategic thinking, fundamentally misaligned objectives and a dysfunctional culture. If these are the root causes of organizational problems, you will want to fix them before spending the time to develop a RACI matrix.
From our experience, here are 6 keys to using a RACI correctly:
- Focus on decisions, not just tasks: most organizations do a reasonable job of defining responsibility for basic tasks – for many it is simply what your boss asks you to do. But as our example illustrates, it is decisions that involve trade-offs that can cause friction. So, deciding which decisions are in scope of the RACI is key. This tool should not be used to document everything, the value is when there are critical, often time-sensitive decisions to be made and potential confusion around who has what authority. Defining the small number of decisions that give you the right to win is a critical first step.
- Be clear on the difference between responsible and accountable: The best way we have found to clarify this is responsibility is task-oriented and accountability is ownership of the results. Some of our clients go so far as to say that the ‘A’ stands for ‘Approved’ in order to highlight this distinction. While the complex and nuanced inputs that lead to a culture of real accountability are beyond the scope of this post (but might make a good blog in the future…), a simple definition is best for now: Accountability should be to the individual who is making the decisions. They have the yes or no authority and veto power, AND they own the outcome whether it is the intended consequences or unintended.
- Be very clear under what circumstances “consulted” means veto power (ideally never) and if possible define these situations in advance (any decision that the requires signing a long-term lease requires the approval of the legal team). Team members that are consulted have knowledge or a skillset that will inform your decision. The team members are giving advice but ultimately not responsible to complete the task or make a decision (and then logically should not be accountable for the outcomes either). This is a tough one for many companies, often departments with deep functional expertise like legal, IT or risk management assume that they have veto power, but they typically bear no consequences for the potential lost opportunities.
- Engage the whole team in the development: it is essential that all critical stakeholders work through the RACI together, rather than having one person decide. This gives the team comfort in how the roles were assigned and a better understanding of the goal of task or decision defined. Healthy disagreement during this process is ok. A robust dialogue ensures that everyone feels as though their voice was heard and builds a common understanding of the intent of what gets captured on paper. And for companies who have been through a lot of change (and who hasn’t?), strong leadership is required to prevent RACI from becoming just another ‘flavor of the month’ initiative that creates work but dies on the vine before driving any meaningful change.
- Use realistic scenarios to test the framework – is this really what we should do when this happens? It is key to spend time drafting scenarios that can be walked through with the complete RACI. For example, if your team constantly has confusion on who gets to make bid/no bid decisions, that would be a great scenario to draft and then walk through when you roll this out. Each scenario should describe a situation, provide an assessment of who needs to be involved in the decision and then most importantly provide an explanation as to why those stakeholders have the role outlined. Don’t be surprised if you need to add details; for example, who approves a ‘no bid’ may be different on a $10,000 bid than on a $1 million bid. The “why” behind the chosen rule is key from a learning and application process.
- Effective Roll-out: It is a safe bet that no one in your organization is waiting for a new RACI chart to tell them what to do tomorrow. To make this a catalyst for change, an effective roll-out is key. Every organization has its own communication approach, it is key to create a communication plan and follow it through. The team that developed the RACI will have a clear understanding of the goal and how it was formed, but for those for whom this is new, they will need time, coaching and follow-through to feel comfortable with using a RACI to inform their decisions. Creating a time and place where those affected can ask tough questions and even propose additional scenarios has proven to be a best practice.
So, how did RACI resolve the issues for our candy client? We started by developing no less than 50 realistic and detailed business scenarios that involved important decisions. We then facilitated a meeting of all the department heads and after reading each scenario asked “whose decision is this?” In most cases at least two hands were raised in response and frequently it was three people who thought they had the final say. After this shared experience, no one could deny that there was a problem.
Working closely with the team, we then used RACI to track the decision boundaries and inputs that made a single person accountable in nearly all the scenarios we could anticipate, eliminating the need for extensive decisions by committee and escalation for approvals. Importantly, we needed to start by to clarifying objectives and eliminating built-in conflicts, for example: minimizing promotion spend and maximizing market share are fundamentally at odds, there is no natural process to resolve these disputes without escalation.
For example, regarding promotions, after getting agreement that the ultimate goal was incremental profit, we required the marketing lead to clearly define the acceptable parameters for promotions, brand usage, display requirements, etc. – the things that sales people could NOT do, even if a customer asked for it. Then as long as they stayed within these guardrails, account managers could negotiate with confidence and make real time decisions in front of their customers. The only acknowledged exception was if a promotion required a net price that was below the previous minimum in that country, it required approval of the CFO, as setting a new precedent could have an impact beyond that one account.
As this example highlights, RACI is the scorecard – it helps you know when you have finished and can help you communicate what is different, but it is not a substitute for disciplined and creative thinking. Importantly, even after you complete your first RACI, it needs to be a living document. A regular review and communication about the RACI will ensure it provides value to you and your team and evolves as new unanticipated scenarios arise.
While far from a cure-all, done properly, a RACI can improve clarity around the set of decisions and processes to improve business performance and reduce organizational friction.
We’d love to hear from you. Have you had experience with implementing a RACI chart and process? What other keys to success did we miss? How can RACI help support a change in strategy?
