When thinking about poor organisational decision-making, what springs to mind?
Iconic strategic failures such as Kodak and Blockbuster or systemic risk failures like BP Deepwater Horizon or Esso Longford Gas Explosion? Or perhaps it’s something more recent and closer to home.
Often when we think about inadequate or ineffective decision making we think about significant events, and there’s certainly plenty of evidence of bad decision making in business and throughout history.
Poor decision making isn’t confined to big events. It’s just that those big events have more significant consequences and are more memorable. As a result, it’s easy to ignore bad decisions that appear minor and with less consequence. It may be a bad hire. The selection of sub-optimal IT software. The inequitable allocation of resources across teams.
And yet, often, a series of small (but flawed) decisions combine in time to have more significance. Bad decisions don’t occur in isolation. There are usually repeated warning signs stemming from the organisation’s culture and leadership practices.
Here are ten warning signs to note:
- When deciding on a course of action, only one solution is presented, rather than a range of alternatives being discussed and debated.
- Leaders operate with the mantra ‘Don’t bring me a problem. Bring me the solution‘, and consequently, informed debate and challenge isn’t welcomed.
- Engagement on problems and issues is limited, which means the silent minority or those with outlier opinions and diverse views are shunned and their views excluded.
- When discussing issues, those involved only talk about what they know as a group, rather than each person being given time to share their perspective to ensure different opinions are tabled.
- A few opinionated voices anchor the conversation, effectively shutting down dissenting or different perspectives.
- The decision-makers don’t consciously consider the bias that may be inherent in how they are deciding.
- Information isn’t easily shared across the organisation because the divisions operate in silos and see each other as competitors.
- Decision-making processes are either non-existent or not transparent and confusing.
- Decisions are agreed too quickly and reactively – often needing to be reversed or amended later.
- The organisation doesn’t learn from previous decision-making mistakes.
Decision-making is a competency, in the same way that communication, negotiation and change management are competencies.
Strategic Decision-Making expert Carl Spetzler outlines five elements that an organisation needs to exhibit to be competent decision-makers:
- The organisation routinely makes high-quality decisions and is focused on achieving this. As part of the decision-making process, it recognises decisions and understands the cognitive behavioural traps that can negatively impact decision outcomes and compensate for them. It also frames decisions appropriately.
- It uses a range of decision-making tools, techniques and processes. As well, people know how and when to use them.
- Decision-makers understand their roles and are skilled in those roles.
- The organisation is well aligned internally. It has a common language and understanding of what constitutes a quality decision.
- There is a focus on continual learning, upskilling and improving the decision competency of its employees.
In a complex and ever-changing world, the need for leaders to be skilled in making good decisions is more critical than ever. However, being able to make consistently good decisions takes time and requires information, analysis and planning. A leader can’t just ‘wing it’ and expect effective outcomes.
The esteemed management guru, Peter Drucker, said: “Making good decisions is a crucial skill at every level”.
So how much energy and effort are you putting in to make sure you (and your organisation) know how to make effective decisions?
Getting you ready for tomorrow, today®
Michelle Gibbings is bringing back the happy to workplace culture. The author of three books, and a global keynote speaker, she’s on a mission to help leaders, teams and organisations create successful workplaces – where people thrive and progress is accelerated.