Inability to make decisions is one of the principal reasons executives fail. Deficiency in decision-making ranks much higher than lack of specific knowledge or technical know-how as an indicator of leadership failure. John C. Maxwell
Analyzing critical qualities of leaders often invokes much debate. Decision-making is arguably near the very top of the list.
There are many things that characterize good decision-making; timing, justification, judgement, and outcomes, to name but a few. There are also many elements that lead to good decision-making; experience, collaboration, insight, and analysis. The many qualities that result in excellent decision-making appear to contain some intangibles, e.g. wisdom as well as knowledge, and intuition as well as understanding. But it is essential to consider this leadership trait as a learned quality as well as an innate one.
A case study highlighting the implications of decision-making
In April 2010, the Deepwater Horizon oil spill disaster occurred in the Gulf of Mexico. In 2011, a White House commission blamed oil giant BP and its partners for a series of cost-cutting decisions and an inadequate safety system. In November 2012, BP plead guilty to the U.S. government on 11 counts of manslaughter, two misdemeanors and a felony count of lying to Congress. In July 2015, BP agreed to pay $18.7 billion in fines, the largest corporate settlement in U.S. history. The neglect and poor decisions that led to the eventual spill may have been prevented if the company hadn’t ignored the warning signs that something was going wrong on the rig and had evaluated critical data better.
This example shows how leadership decision-making is critical, not just at executive levels. It also illustrates that the consequences of decision-making are rarely limited to the immediate timeline and persons. The environmental, personal, and financial fall-out to this disaster were far-reaching.
Developing decision-making skills
Developing leaders to become better-decision makers is a major challenge. Some of the ways that this can be achieved are:
• Secondment – experience in diverse organizational roles, e.g. international assignments. This broadens the exposure of leaders to other environments thus expanding knowledge and understanding, leading to more informed decision-making
• Mentoring – access to a more senior leader who can guide, advise, and recommend a leader in decision-making
• Shadowing – working alongside another leader in an unfamiliar role which adds learning and understanding to facilitate more informed decision-making
• Case studies – practicing decision-making using a classroom scenario and receiving feedback from experts on the quality of decision-making
• Projects – Tackling a specific assignment that requires collaboration and action to develop decision-making behaviors
• Learning – Expanding the cognitive and emotional intelligence of leaders through formal and informal learning to provoke more informed decision-making
• Methodologies – Establishing formal methodologies such as project management, change management, and strategic planning can all lead to better, more collaborative decision-making
Leadership development initiatives need to incorporate elements of the above to be effective. It is important to evaluate any investment in developing leaders as a bottom-line impact arising from better decision-making. A McKinsey report of January 2014 titled Why Leadership Development Programs Fail, highlights the need for context, real work, considering mindsets, and measuring results, as the best environment for building such initiatives.
Helpful development tools
Apart from the “activity-based” initiatives above, it can also be helpful to consider techniques in developing better decision-making. Chip & Dan Heath provide a helpful pneumonic in their book Decisive – How to Make Better Choices in Life and Work (2013) …… WRAP.
• Widen Your Options – You encounter a choice. Narrow framing can make you miss options (unduly limiting the options considered)
• Reality-test Your Assumptions – You analyze your options. Confirmation bias can lead you to gather self-serving info (information that bolsters beliefs)
• Attain Distance Before Deciding – You make a choice. Short-term emotion can often tempt you to make the wrong one (being swayed by emotions that will fade)
• Prepare To Be Wrong – Live with it. You’ll often be over-confident about how the future will unfold (too much faith in our predictions)
Using a framework such as this to test decision-making can be a helpful exercise, especially as an objective balance to the instinctive or traditional ways decisions are made.
Benjamin Franklin had a model for decision-making which he called “Moral Algebra”:
• “Divide half a sheet of paper by a line into two columns, writing over the one Pro and over the other Con. Over the next three or four days, add factors to the two columns as they occur to you. Estimate the respective weights of each factor and where two, one on each side, appear equal – strike them both out. If a Pro equals two Cons, strike all three out – follow this pattern based on respective weights on either side. Find where the balance lies, and if nothing of further importance arises over the next day or two, come to a determination accordingly.”
Whilst Chip & Dan Heath’s model might appear broader in design, any model that enhances the quality of decision-making is helpful.
A leader’s ability to make empathetic, collaborative, and strategic decisions which positively impact their employees, organization, and all stakeholders, is one of the most critical qualities of great leadership. Investment in building this ability is time and money well spent!