Part 5: It's Not That Executives Won't Act, It's That the "Decision Criteria" Aren't Shared—What Successors Must Prepare Before Changing an Organization That Waits for Instructions

A few years after taking over.

As the president, I want to change the company.
I want my executives to think more.
I want to create an organization where proposals come from the front lines.
I want to escape the state where I am the only one doing the thinking.

There are many successors who feel this way.

But in reality—

・Executives don't take initiative on their own
・No matter what you ask, they respond with, "What do you think, President?"
・They nod in meetings, but execution doesn't progress
・No improvement proposals come from the front lines
・In the end, the president decides everything

Many companies are in this state.

At times like this, you might find yourself thinking:

"My executives lack initiative."
"I want them to think and act more."
"How long are they going to keep waiting for instructions?"

Of course, there are times when the issue lies with the executives.

However, what often happens in a company after a succession is that
it's not that the executives won't act,
but that the "criteria for making decisions" have not been shared,
which is the state they are in.

Executives aren't failing to think; they are "afraid of missing the mark"

From the successor's perspective,
it can sometimes look like the executives aren't thinking about anything at all.

But in reality,
it's not that the executives aren't thinking about anything.

Rather, in many cases, they are thinking.

However, as a result of their thinking,
"it is safer not to act on my own."
is the conclusion they reach.

Why?

In the past,
・The predecessor's intentions were strong
・They were scolded for making decisions on their own
・Things different from precedent were hard to get approved
・They were blamed if they failed
・Presidential decisions were prioritized over front-line decisions

In companies with that kind of history,
executives and employees learn naturally.

"It's better to check with those above than to think for myself."
"It's better not to say anything unnecessary."
"Deciding is the president's job."
"Even if I make a proposal, nothing changes in the end."

This is how an organization that waits for instructions is created.

This is not just a matter of individual personality.
It is a problem of a culture accumulated within the organization where 'it is safer not to think.'

The 'don't think' culture accumulates quietly.

During the era of the previous management,
the company grew through a top-down approach.

This is common in small and medium-sized enterprises.

The founder or predecessor was strong,
could handle sales,
knew the customers,
could intervene in operations,
and made decisions quickly.

When a company has grown in this form,
for the employees,
'following the president's judgment' becomes the optimal solution.

That in itself is not a bad thing.
Because in that era, that was how the company functioned.

However, problems arise after the succession.

The successor thinks,
'I want them to act more autonomously,'
'I want to delegate to the executives,'
'I want to change the company from one where I decide everything myself.'

But from the executives' side,
based on many years of experience,
'the president makes the final decision,'
'we are the ones who seek confirmation'
has become their mindset.

In other words, there is a gap between the organizational image the successor is seeking and the way of working the executives have acquired.

Therefore, if you suddenly say,
'Please act more proactively,'
it will not go well.

From the executives' perspective,
it is because they do not know what they are allowed to decide and to what extent.

Developing executives requires more than just 'delegating'

There is a common misunderstanding here.

That is the idea that
developing executives means 'delegating.'

Of course, delegating is important.

However, if you delegate in a state where decision criteria are not shared, the staff will be confused.

For example, suppose you are considering a price increase.

The president is thinking,
'I want to improve gross profit,'
'I want to create a source of funds for future investment,'
'I want to break away from a low-price culture.'

On the other hand, sales executives are thinking,
'I don't want to lose customers,'
'I'm worried if the front line can explain it,'
'Won't they go to the competition?'

The manufacturing and service delivery side sees it as,
'We can't lower the quality of our response,'
'We don't have enough staff,'
'If the policy changes suddenly, the front line will be in chaos.'

Accounting is thinking,
'I want to stabilize cash flow,'
'I want to improve profit margins,'
'I also want to review collection terms.'

In this state,
even if you say, 'Please think and act in each department,'
the directions will not align.

This is because,
the risks each of them is looking at are different.

Therefore, what is needed is,
not simply delegating.

Before delegating,
it is to share 'what is important when making a judgment.'

KPIs alone will not move an organization

There is one more common misunderstanding.

That is,
the idea that if you set KPIs, the organization will move.

Of course, KPIs are necessary.

Sales.
Gross profit.
Order rate.
Collection period.
Inventory turnover.
Number of projects.
Repeat rate.
Productivity.

It is important to look at numbers.

However, KPIs alone will not move an organization.

This is because numbers show you
'what to look at,'
but they do not show you
'how to make a judgment.'

For example, even if there is a KPI to increase the gross profit margin,
the following judgments will be required on the front line.

・Which customers should we negotiate price increases with?
・Which projects should we not accept?
・Should we protect gross profit even if it means losing short-term sales?
・To what extent should we prioritize relationships with existing customers?
・How should we handle projects with high front-line burden?
・Who will explain it to the customer?

Unless you decide up to this point, KPIs will not change front-line behavior.

Just by setting numbers,
executives cannot act.

What is needed is the criteria for judgment that comes before KPIs.

Companies where executives take action have "criteria," not just "correct answers"

Companies where executives take action have something in common.

That is, they have criteria that allow them to make judgments to a certain extent without having to check the president's answer every time.

For example,

・To protect gross profit, it is acceptable to lose some sales
・Projects that affect cash flow must be confirmed before accepting the order
・Even for existing customers, propose changing terms for loss-making projects
・For new investments, consider the recovery period and exit criteria as a set
・If the burden on the field is above a certain level, prioritize the system over the delivery date
・Listen to employee dissatisfaction, but do not make unanimous agreement a condition for decision-making

When such criteria exist, executives find it easier to make judgments.

Conversely, in companies without criteria, executives look at the president's reaction every time.

「This might be something the president dislikes」
「What would the previous generation have done?」
「I'll be in trouble if I proceed on my own and get scolded」
「I'll check just in case before doing anything」

As a result, everything comes back to the president.

And the successor worries, "Why won't the executives take action?"

But in reality, it's not that the executives won't act; it's that the criteria for acting haven't been shared.

What a successor should do first

So, where should a successor begin?

There is no need to start organizational reform immediately.
There is no need to drastically change the personnel system.
It is not necessarily the case that executives need to be replaced.

The first thing to do is to articulate the president's own criteria for judgment.

For example,

・What must absolutely be protected in this company?
・What past methods can be let go of?
・To what extent should gross profit be emphasized?
・When sales and profit conflict, what should be prioritized?
・How much surplus funds should be kept?
・Under what conditions should new investments proceed?
・How can employee consensus and decision-making speed be balanced?
・To whom and to what extent should tasks be delegated?
・Which judgments must always be reviewed by the president?

If this remains ambiguous, the organization will not move even if you demand initiative from executives.

Turn the criteria in the president's head into words that executives can use.

This is where you need to start.

Separate the 'scope of delegation' from the 'scope of verification'

For executives to start taking action, it is also necessary to clarify the scope of delegation.

For example:

・Improvement investments under 300,000 yen can be decided by the department
・Projects with a gross margin above a certain level can be handled by sales
・Changes to terms for existing customers require prior confirmation from the president
・Decisions on continuing loss-making projects are handled in monthly meetings
・New hires are proposed by the department, with final judgment by the president
・New business investments must be proposed along with exit criteria

In this way, how far should you delegate?
Where does the president's judgment begin?
Which figures should be looked at to make a judgment?

Just by deciding these things, the way executives act will change.

Conversely, if this is ambiguous, executives will lean toward the safe side.

The safe side means 'confirming,' 'holding off,' or 'not acting.'

Therefore, if you want to change the habit of waiting for instructions, it is necessary to separate decision-making authority from decision-making criteria, rather than relying on mental arguments.

Finally

Executives don't act. Employees don't think. No proposals come from the front lines.

When you feel this way, the problem might not just be the motivation or ability of the executives.

Within a long-standing organizational culture, a structure may have formed where 'it is safer to confirm than to think,' 'it is better not to decide for yourself to avoid failure,' and 'it is better to wait for the president's judgment.'

Therefore, what is needed is not to give stronger instructions. Nor is it to manage more minutely.

First, you must share the criteria for judgment.

If right now,

・Executives do not act on their own
・They nod in meetings but nothing is executed
・Everything eventually returns to the president
・Behavior does not change even when KPIs are set
・You want to delegate but cannot fully do so
・You feel that executive development is not progressing

If such a state continues, it may not be a lack of ability in the executives, but simply that the 'criteria for judgment are not shared.'

I handle over 400 consultations a year in the fields of business succession, second startups, and new business development.

In a 60-minute brainstorming session,

・The real reason executives don't act
・The criteria for judgment inside the president's head
・The scope of delegation and the scope of verification
・Premises that should be shared in meetings
・How to connect KPIs with execution responsibility
・The next realistic step to take

are organized here.

Management by a successor is
not a job that the president should continue to think about alone.

In order to move the company,
the president's criteria for judgment
must be transformed into a form that executives can use.

*Case studies have been partially modified. They are not related to actual companies or individuals.

📩 Click here for an initial 60-minute consultation
'Executives won't act,' 'Meetings don't reach decisions,' 'I'm taking on too much'—
Let's organize these states together from a structural perspective.

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https://jissenstrategy.com/contact
✉ info@jissenstrategy.com

Atsushi Kumagai
Practical Management Advisor / SME Management Consultant

I provide hands-on support in the fields of succession, second-generation startups, and new business development to create a state where business owners can make decisions.

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