Here’s the scenario, a colleague is going on maternity leave and someone wants to send them flowers. The bouquet costs €24, it should be one of the easiest decisions a business makes…correct. But how many people need to approve it? Does the employee have the authority to order it? Does it need to go through their manager, finance or a department head? In some businesses, could a decision this small eventually find its way to the founder? It might seem insignificant, but it can reveal something much bigger about the way a company operates.
In a recent episode of Transformation Today, Marinka de Groot spoke with Yehuda Hofri about what happens inside a company after investment. One of the things Yehuda looks at when entering an organisation is decision latency: how quickly a business can actually make and act on decisions.
The €24 bouquet is one simple way of testing it.
What does decision latency actually mean?
Decision latency is the time and friction between recognising that something needs to happen and somebody having the authority to make it happen. In Yehuda’s example, he asks how many ranks in the organisation someone needs to pass through to approve a €24 bouquet for a colleague on maternity leave. His view is that it should be one, perhaps two at most.
The point isn’t that businesses shouldn’t have controls. Financial accountability, budgets and appropriate oversight all matter. The problem starts when the same level of approval is applied to decisions of very different importance. If several people need to approve a €24 purchase, what happens when a salesperson needs to make a small commercial decision for a customer? Or when a product team wants to test something? Or an employee spots a problem that could be fixed today but doesn’t have the authority to act? Across an organisation, those delays quickly add up.
Why it matters more after investment
This becomes particularly important when a business receives investment because funding is usually intended to accelerate growth. The company might be hiring, entering
new markets, developing its product or increasing sales activity. As Yehuda describes it, when you drive faster, every turn of the wheel has the potential to throw you off faster too. More capital gives the business the ability to accelerate, but it also puts greater demands on its ability to make good decisions.The relationship with investors changes too. Before investment, investors are assessing the potential of the business and buying into its story. Afterwards, Yehuda says they move from “cheerleaders to examiners.” The company is now expected to turn that potential into results.
The problem is that while the organisation is being asked to move faster, its decision- making structure may still be designed for a much smaller company.
When the founder becomes the bottleneck
This can be particularly difficult for founders because being closely involved in everything is often one of the reasons the business succeeded in the first place.
In the early days, the founder may genuinely be the best person to make most decisions. They understand the customers, product and vision, and with a small team, asking the founder is often quicker than creating a process. But that changes as the company grows. If 10 people rely on one person for decisions, it may be manageable. If 100 people do, it isn’t. Yehuda uses a useful measure within his own teams: how many good decisions are being made while he is away, without needing him at all?
If his management team can reach consensus, they should move ahead. If they genuinely can’t agree, he can step in as the tiebreaker. The reasoning is simple: if every decision requires one individual, that individual eventually becomes the bottleneck, regardless of how capable they are.
Scaling isn’t about the founder becoming faster at making every decision. It’s about building a company capable of making more good decisions without them.
Delegation needs more than permission
Simply telling employees to “take more ownership” won’t solve the problem. People need to know which decisions they own, how much freedom they have and when something genuinely needs to be escalated. Leaders also need to accept that someone else may make a good decision differently from the way they would have made it themselves.
Yehuda describes the later-stage leadership role as being a kind of “re-founder” alongside the founder: helping reimagine how the business operates as it moves away from instinct and towards more systemic, scalable ways of working. That doesn’t mean adding process for the sake of it. Good structure should make appropriate decisions easier, not create another layer of bureaucracy.
Try the €24 testThink about what would genuinely happen tomorrow if somebody in your business wanted to spend €24 on a reasonable expense. Who could say yes? How many people would be involved? How long would it take? Would the employee know what they were authorised to do? Would a senior leader end up making a decision that someone closer to the situation could have made perfectly well themselves?
Then consider where else that same pattern might be appearing. The real cost of decision latency isn’t one delayed bouquet. It’s hundreds of small decisions travelling unnecessarily through an organisation, consuming management time and slowing down the people trying to get things done. For a growing company, particularly one that has just taken on investment, that matters.
Capital can give a business the resources to move faster. But resources alone don’t create speed.
The more useful question may be: how quickly can your people make good
