Good decision making is a crucial leadership skill. Good decisions are at the core of organisational performance. If an organisation wants better outcomes they need more robust decision making processes and leaders capable of making good decisions.
My article on the importance of good decision making in accelerating your career progress was published in Switched On Leadership recently. You can read the full article on Page 35 of the magazine here.
Leaders make many decisions each day. Decisions that range from simple things such as what tie or dress to wear, to more strategic matters such as where to invest, what product to launch and how to address falling margins. It’s comforting to think that our brain, with its vast capacity for processing streams of information, is infallible. The truth is it’s highly fallible – and it can often fail when it’s most needed.
Why? Because we make decisions on hunches and gut reactions – letting past experiences create assumptions about how things should be and therefore how we should respond today. The danger with this approach to decision making is that it can be filled with blind spots and bias.
Future Challenges Require Different Thinking
For leaders facing unchartered territory relying on what they have always done before and using default thinking patterns is fraught with danger. The recently released Centre for Workplace Leadership’s Study of Australian Leadership found that organisations should be concerned about the state of leadership and management capability. For example, it found that many senior leaders do not draw on strategic advice in making decisions about the future. Failing to draw on outside and broad expertise means that leaders can take a myopic and narrow perspective on transformational challenges. In a world of increasing complexity and ambiguity it’s essential that leaders know how to make good decisions to ensure good organisational performance.
Be Deliberate About The Process
Making good decisions involves taking deliberate steps on deciding how to decide. This includes recognising there is a spectrum of decision making based on the simplicity, complexity or adaptive nature of the challenge being faced. Different problems require different processes and tools. Consequently, leaders need to consider taking a ‘fit for purpose’ approach where the decision making approach is not only open to discussion, but is consciously constructed and agreed.
Structure Out The Bias
Bias is pervasive and a willingness to accept that bias can impede decision making, makes it easier for the bias to be labelled and mitigated. This involves applying techniques to structure out and minimise the likelihood of bias in the outcome. This can involve, for example, testing multiple hypothesis and developing diverse scenarios to challenge dominant views and the status quo. It also means that each person involved in the process is open to having their views and thought processes challenged, and to applying a curious and questioning mindset.
Widen The Frame
Sometimes the best solutions will come from unlikely sources. Widening the frame of reference to include people not involved in earlier discussions and sourcing data from diverse sources is therefore critical. Likewise, it’s important that the process involves not just looking for evidence to support ideas, but actively looking for data that disproves them. A good decision making process encourages debate and welcomes a range of views and options. It considers outcomes at both ends of the spectrum and so factors in the views of the minority and outlier opinions and data. It also ensures that the right stakeholders are involved at the right time.
There’s no point making a decision if the capacity or capability to see it through doesn’t exist. Therefore, a critical ingredient is ensuring the decision can actually be implemented. This also requires leaders to be explicit about the trade-offs that will arise. Making a decision typically means that something else won’t be done, and being clear about that fact helps to minimise the risk of confusion about outcomes and impacts later. Good decisions are at the core of organisational performance. If an organisation wants better outcomes they need more robust decision making processes and leaders capable of making good decisions.