Initiatives move forward on quick informal approvals from the people who hold the authority, with the paperwork following, so good work starts in days instead of waiting weeks for formal governance.
Borderline: whether this move is justified depends on the situation, and only the person in it can judge.
An example
Ten business days and four signatures made up the intake process for a new client at a management consulting firm, and a hospital chain wanted a pricing team on site in three. The senior manager went to the senior director who held authority over new engagements, laid out the client, the scope, and the risk, and got a nod in the hallway. Within the hour she sent him a two-line email restating what he had approved, with the budget cap, and he replied yes. She opened the formal intake that afternoon, marked it as approved, and staffed two consultants. The signed engagement letter arrived on day eight. When the senior director left for a rival firm a month later, the new risk officer found the approval email in the file and closed the review.
Why it works
The nod makes the informal path better, because a broker's blessing signals insider status and protection and arrives already validated. It makes that path easier, compressing weeks of paperwork, scheduling, and committee politics into one corridor conversation. And it makes the formal route costlier, since insisting on it signals a lack of access or naivety about how the place works. It works where a small, stable set of people with authority is reachable, formal governance is slow enough to feel like an obstacle, and audit does not unwind commitments made on a documented nod.
The thinking behind it
Ronald H. Coase Ronald Coase's The Nature of the Firm (1937) argues that firms exist because directing activity by authority is sometimes cheaper than finding prices and negotiating contracts. A nod from the person who holds the authority is the cheapest form of direction there is. Coase's logic explains why the nod beats a ten-day intake process, and why it only works when the person nodding really holds the authority.
Oliver E. Williamson Oliver Williamson's Markets and Hierarchies: Analysis and Antitrust Implications (1975) assumes bounded rationality, so agreements are always incomplete, and opportunism, so some parties will take advantage of what is left unwritten. An undocumented approval is an incomplete agreement the approver can later disown. The clean form therefore confirms the nod in writing within the hour, and audit asks for documented authority chains.
When it fits
Where formal governance is slower than the work needs, the person giving the nod really holds the authority, and audit will accept a documented informal approval, the nod is the right tool. You need access to that person and the discipline to put the approval in writing at once. It fails for anything the rules require a committee or a control function to approve.
How to use it well
Go to the person who actually holds the authority, and give them what they need to decide in one conversation: scope, budget, and risk.
- Confirm in writing within the hour with a short email that restates what was approved and asks for a reply.
- Open the formal process the same day, marked as approved, so the paperwork catches up quickly.
- Stay inside the limits of what was approved.
- Keep the confirmation where audit will find it.
Use the nod for speed on decisions that belong to one person. For decisions that belong to a committee, a nod is only a sign of support.
What it costs and where it backfires
Each nod you rely on trains the organization to treat formal governance as ceremony, and colleagues without access will resent the express lane. If the approver later disowns the conversation and you have no written confirmation, the commitment is yours alone. Authority and controls mark the edge. A nod from someone without the authority is no approval, and using one to skip a required control, such as a risk review or a compliance check, bypasses safeguards the company is entitled to.
When it is used on you
Resources that keep moving before any written authorization exists, with the formal process reduced to paperwork after the fact, are the sign to ask who approved the commitment and where the record is. Audit and compliance can require documented authority chains, and leaders can speed up the formal route so that a hallway nod no longer feels necessary.