Approval Matrix: Who Decides What in a Growing Plant

What is an approval matrix, and why does a plant need one?

An approval matrix is a one-page table. It lists the common decisions in the plant and shows who may approve each one, and up to what limit. It lets managers act without waiting for the owner, and it tells the owner which decisions still need him.

Without it, managers ask the owner about everything. They are not weak. They simply do not know where their authority ends. It feels safer to ask than to risk a mistake.

The result is a queue outside the owner's cabin. A purchase waits, a dispatch waits, a leave application waits. The plant moves at the speed of one person's day.

What does it look like?

Here is a small example. The limits are examples only. Every plant sets its own.

Keep the table to one page. If it runs to five pages, nobody will use it.

How is an approval matrix different from an organisation chart?

The chart shows who reports to whom. The matrix shows who decides what. You need both. See organisation chart for a small manufacturing company.

How do I make one?

Step 1: List the decisions that reach you

For two weeks, note every request that comes to you for approval. Group them: purchase, people, money, customer, production.

Step 2: Set limits by value or by type

Some limits are in rupees. Others are in kind, such as "new vendor" or "change in drawing". A new vendor may always need the owner. A repeat order from an approved vendor may not.

Step 3: Agree with the heads

Sit with each department head. Ask what they want to be able to decide. Often they ask for less than you would give. Write the limits together.

Step 4: Add a check on the other side

A limit is safe only when there is a check. Ask for a monthly list of what was approved under each limit. The owner reads it in the monthly review. This is Trust but Verify: the person decides, and the owner checks the pattern.

Step 5: Put it on paper and use it

Print it. Share it with the people concerned. When someone brings a decision to you that is inside his limit, send it back with a kind word: "This is yours. Please decide."

A limit that is written is a gift to your manager. It tells him he is trusted, up to here.

What mistakes should I avoid?

• Limits too low. If the owner still signs most things, the matrix has changed nothing.
• Limits too high at the start. Begin with moderate limits. Raise them as the manager shows good judgement.
• No review. A matrix without a monthly look turns into a weak spot.
• Many exceptions. Every exception must go back to the owner once, then be added to the matrix if it will come again.

How to start in your plant

1. For two weeks, tick every approval request you handle.
2. Draw the table with five to eight decisions only.
3. Fill limits for the heads. Keep a column for supervisors if they take decisions.
4. Discuss with the heads and fix the limits together.
5. Start from the first of next month.
6. Review the list of approvals in the monthly review.

What happens when someone breaks a limit?

First, find out why. Often the limit was unclear, or the matter was urgent and no one was available. Treat the first case as a gap in the matrix and correct it. If a person knowingly crosses a limit again and again, talk to him privately and clearly. The matrix works only when both sides keep their part: the owner lets go within the limit, and the manager stays inside it.