How Leaders Use Balanced Decision-Making Skills to Move ...

Usually the realm of decision making is the responsibility of company leaders. They must select the actions, determine how they will be carried out, ... Home Resources WhitePapers HowLeadersUseBalancedDecision-MakingSkillstoMoveOrganizationsForward HowLeadersUseBalancedDecision-MakingSkillstoMoveOrganizationsForward Shareon: DownloadPDF Howwehelpclients DecisionExpertise Goodleadersaregooddecisionmakers LearnMore Ineveryorganization,decisionsmustbemadeandactionstaken.Usually therealmofdecisionmakingistheresponsibilityofcompanyleaders.Theymustselecttheactions,determinehowtheywillbecarriedout,andbeaccountablefortheimplementationofthedecisionandforthesubsequentresults. Gutfeelingsandyearsofexperiencemaybesufficientformostday-to-daydecisions,butmajordecisionsthatmoveacompanyforwardcomewitharealelementofrisk.Leadersneedastructuredprocessthatisbasedonaninformedanalysisandparticipationfromkeystakeholderstoarriveatabalanceddecisionthateveryonecansupport. TheChallengesFacingToday’sLeaders TherewasatimewhenaccessingtheInternetfromacompanycomputeroraphonewasunheardof.Workerssatincubiclesnexttooneanother,connectedtocustomerswithdeskphones,andtalkedabouttheirweekendsbythewatercooler.Staffmeetingsinvolvedemployeesgatheringinaboardroomtodiscussprojectsandprovideinputintodecisionsthatneededtobemade. Today’stsunamiofinformation,accessiblefromanydigitaldevicebyanyoneatanytimehasdramaticallyaltered–evenshaken,thefoundationfordecisionmaking.Astheworldbecomesmorecompetitive,thesignificanceofdatahasincreasedexponentially.Intuitionandexperiencearevaluable–buttheymustbesupportedwithanalyticsiftheyaretocarryanyweight. Additionally,digitaltransformationhasacceleratedthespeedatwhichweexpectcommunicationandresponsetoanewidea.Thisspeedofchangedoesnotalignwithhowweashumansareinternallywiredtoprocesschange. Staffmembersarenolongerco-located.Weeklymeetingsareconductedthroughaudioorvideoconferencingwithemployeesworkingfromhomeofficesorhalfwayaroundtheworld.Inaddition,today’sdiverseworkforcebringsvaryingculturalviewpointsintothemixaddingtothecomplexityofdecisionmaking. Morethanever,decisionmakingrequiresacrisp,buttoned-downprocessaroundtheobjectivesforthedecisionandthewhybehindthechoicesmade.Abalanceddecisionwillgarnermorerespectifithasgonethroughobjectivereasoninganditissupportedbydata,eveniftheoutcomemaybeunpopular. GreatLeadersAreGreatDecisionMakers Anexecutive’sjobistoshapethefutureofanorganizationthroughclearlythought-outdecisions.Atanymomentinaday,theyarerequiredtomakeacallonsomeformofdecision:exchanginginformation,reviewingdata,generatingideasorevaluatingalternatives. Whileallexecutivesaretaskedwithdecisionmaking,therearecertaindecision-makingqualitiesandbehaviorsthatdefineagreatleader. 1.Establishingaunifiedstartingpointforeveryoneinvolved.Acompany’sdiverseworkforcewillbring differentframesofreference,assumptions,andexpectationstothedecision-makingprocess.For example:Aserviceorganizationistaskedwithdetermininghowissuesshouldbeeffectivelyescalated. Whileallbusinessunitleadersagreethatinstancesof“outages”arethehighestpriorityitems,everyone hasadifferentdefinitionofan“outage”.Theresultisaroomfullofexecutiveswithvaryingassumptions tryingtoreachanagreement.Aleadermusthavetheabilitytolevelexpectations,clearlydefineterms andestablishcommonlanguagewhenleadingteamstomakeorganizationallyimpactfuldecisions. 2.Recognizingthatanunpredictablefuturecanderailthebestdecision.Gooddecisionmaking reliesonusingexperienceandbestjudgmentcombinedwithsolidfactsanddataaboutalternatives andrisks.Regardlessofthis,everydecisioncomeswithadegreeofuncertaintybecausenoonecan predictthefuture.Furthermore,mostdecisionsrestonasetofconstraintsthatfollowpriordecisions. Hindsightprovidesclarityonwhetherornotitwasagoodbalancedchoice.Howpriorconstraints aredocumented,assumptionsmadeaboutthefuture,andthewayalternativesareevaluatedallows decisionmakerstodotwothings:defendthedecisionif,whenthedustsettles,itdidn’tworkoutthe wayitwasintended;andenablelessonslearnedfrombothsuccessesandfailuresbyprovidingcontext ofthosedecisionsforanalysis. 3.Understandingthat“perfect”maynotbe“better.”Sometimespeopleputoffmakingadecisionfor fearthatitmaybethewrongone.Thatfearcanleadtoanalysisparalysisorchoosingnottomakea choice.Whendecisionmakingisfullofalternatives,thereisnodefinitiverightanswer.Leadersdotheir besttomakeabalancedchoicewiththeinformationavailableatthetime.Thegoalmayjustbeto avoidmakingawrongchoiceandmanagerisk,versustryingtomaketheperfectdecision.Evenifyour finaldecisionturnsouttobelessthanideal,youcanconfidentlydealwiththeoutcomebecauseyou minimizedtherisksupfront. 4.HavingtheabilitytobalanceIQ,EQandRQ.Aretheindividualsonyourteamdrivingperformance–oristheprocessdrivingperformance?Anexcellentteammaybeperformingpoorlybecausetheyarefollowingthewrongprocessandviceversa.Agoodleaderknowshowtobalanceateam’sIQ,emotionalintelligence(EQ)andrationalintelligence(RQ)toachievethebestresults. 5.Willingnesstoengageothers.Whilefinaldecisionsareoftentheresponsibilityofgreatleaders,a balanceddecisionisnotachievedinavacuum.Leadersmustbepreparedtoengageothersinthe process.Researchshowsthemoreyouaskofpeople,themoreyouwillgetfromthem.Intheend, askingforinputfromothersleadstogreatersupportforyourdecision. 6.Havingtheconfidencetoknowwhatyoudon’tknow.Leadersmustrecognizewhentheylackknowledgeinacertainareaandgathertheinformationrequiredtofillinthegaps.Talktopeoplewhohavesubjectmatterexpertiseorexperiencethatisrelevanttoyourfinaldecision.Themoreyouknow,thebetterarmedyouare,andthemoreconfidentyouwillbeinmakingthebestchoice. 7.Possessingemotionalself-control.Emotionscancloudyourabilitytomakerational,thought-outchoices.Greatleadersknowthattheyneedtocalmintenseemotionalreactionstoclearthewayforlogicalthinking.Thegoalisnottotakeemotionsoutofthedecision-makingprocess,butrathertopreventthemfromtakingover.HowtoMinimizetheRepercussionsLikeawhipthathasbeencracked,thesmallmovementnearestthehandlecausesthelargesswingsattheendofthewhip.Inotherwords,seeminglysmallchangesyouareclosetomayhavebigimpactsfeltfurtherawayfromthepointwherethedecisionismade.Theresultingeffectsofabigdecisioncaninvolveuncomfortablechangesinprocesses,expandedjobdescriptions,demotionsandjoblosses.Followinganunpopulardecision,employeesmayfeelthattheyarenotvaluedorrespected,leadingtoadecreaseinmotivation,increasedabsenteeism,poorworkperformance,andageneralbreakdownincommunicationsfromthetopdown. HowtoMinimizetheRepercussions Likeawhipthathasbeencracked,thesmallmovementnearestthehandlecausesthelargesswingsat theendofthewhip.Inotherwords,seeminglysmallchangesyouareclosetomayhavebigimpacts feltfurtherawayfromthepointwherethedecisionismade.Theresultingeffectsofabigdecisioncan involveuncomfortablechangesinprocesses,expandedjobdescriptions,demotionsandjoblosses. Followinganunpopulardecision,employeesmayfeelthattheyarenotvaluedorrespected,leadingto adecreaseinmotivation,increasedabsenteeism,poorworkperformance,andageneralbreakdownin communicationsfromthetopdown Whiletheseareveryrealisticconsequencesofimportant decisions,theyarecertainlynotdesirablerepercussions andeffortsshouldbemadetominimizethemasmuch aspossible. Startwithanunderstandingoftheobjectivesthatmust bemet.Determinehowyouwillmeasurethoseobjectives andweighthemagainstpossiblealternatives.Thenassess therisksassociatedwiththefinaldecision.Askyourself,“if wedothis,whatwillhappenasaresult?”Decideifyouare preparedtoaccepttherisks. Whilethebusinessstrategyisusuallygeneratedatthetop  ofanorganization,agreatstrategywillnotexecutewellif youdon’thaveinputfromeveryonewhowillbeaffectedbyit.Involvethosewhoaredirectlyimpacted bythedecisionyoumake.Engageemployeesatallrelevantlevels.Askthemiftheyhadtomakesomethingbetter,howwouldtheygoaboutit? Hereisatypicalexample: Aplantmanagermustdecidethebestwaytoreconfiguretheassemblylinetoreducewaste.Theplantmanagerhasbeengivenspecifictargetsandparametersforthenecessaryimprovement.Whileshehasgreatinsights,theplantmanagerdoesn’tperformtheworkandthereforeshemaynotknowthebestwaytomakeimprovements. Forthebestresults,theplantmanagerassemblesateamofemployeeswhoworkdirectlyontheassemblyline.Theteamisinformedoftheobjectives,whichmightincludeminimizetheexpenseofunionlabor,maximizethrough-putandreducewaste,thebudgettheyhavetoworkwithandthetimeframeinwhichtherecommendationsmustbemade.Theteamconductstheresearch,makeson-the-jobobservations,identifiesoptionsincludingassociatedrisks,andpresentstheirfindingswithrecommendationstotheplantmanagerforfinalanalysis.Aftercarefulreview,thebestbalanceddecisionismade. Bypushingoutdecisionmakingclosertothepeoplewhoareaffected,theybecomeempoweredandengaged.Attheendoftheday,notonlyhaveemployeesplayedaroleinmakingthebestchoice,theyaremoreacceptingoftheconsequences. WorkingWithaDecision-MakingTeam Themostrobuststrategiesemergewhenateamworksthroughdecisionstogether.Sometimesgettingtherecanbeachallengeifthereareseveraldivergentviewpointswithcompetingpriorities.Thepersonwiththebiggestbusinesscardortheloudestvoiceintheroommayprevail.Othersontheteammaysimplyacceptarecommendationtoavoidconfrontationordeflectresponsibility. Butwhenteammembersworkwithacleardecision-makingprocessastheirroadmap,theycanarriveatthebestsolution.Theybenefitfromsharingrelevantinformation,differingopinionsaremoreeasilyreconciledduetoaless-biasedprocess,andahigh-qualitydecisionisreachedbasedonsounddata.Whileeveryonemaynotagreewiththedecision,theycanrespectitbecauseoftherigorandduediligencewithwhichthedecisionwasmade. Youwillwanttobuildyourteamaccordinglybasedonthelevelofdecisiontobemade,theinformationrequiredtoarriveatabalanceddecision,andtheexpectedlong-termimpactofthatdecision. Ifyourdecisionisaminorissuewithlimitedlong-termsignificance,youmayopttogatherinputfromoneortwoindividualswhohaveinsightsandcometoafast,firmdecisiononyourown. However,ifthedecisionoverlapswithotherbusinessunitsandcouldpotentiallyimpactotherinitiativesorrequireactioninthefuture,youwillneedanintegratedorconsultativeapproachthatinvolvesinternalstakeholdersaswellasexternaladvisorsonyourteam. Yourdecision-makingteammightlooklikethis: Astheleader,youhavetheauthoritytomakethedecision–totakeresponsibilityforit,andforassumingtherisksinvolved. Ifyourecognizethatthereareinformationgaps,enlistthehelpofsubjectmatterexpertsorconsultantstoresearchandsuggeststrategicalternatives,andtoprovideyouwithknowledgethatyoumaybemissing. Roundingoutyourteamwouldbethosewhoarerespectedmembersofstakeholdergroupsthatareaffectedbythechoice.Theypossessknowledgeofhowyourorganizationworksandcanprovideyouwithafirst-handperspectiveonhowdifferentalternativeswillaffecttheirteam. Ifyouneedtoarriveatamajordecision,youmightincludeathird-partyfacilitatorwhodoesn’thaveastakeintheoutcome.Thefacilitatorguidestheteamthroughtheprocessandcalmsdiscussionwhenrequired,particularlyifyouhaveadiversegroupofleaders. Makinggoodchoicesdependsonthreeelements:thequalityofourdefinitionofspecificfactorsthatmustbesatisfied,thequalityofourevaluationoftheavailablealternatives,andthequalityofourassessmentoftherisksassociatedwiththosealternatives.-NewRationalManager TheArtofBalancedDecisionMaking Strategicdecisionsshouldneverbemadeinanarbitraryfashionwherethethinkingthatwentintochoosingapreferredalternativeisunclear. Thebestdecisionsaremadewiththehelpofavisible,rationalprocessinwhichthedecisioncriteriaareclarified,therangeofalternativestobeexaminedareagreedupon,theperformanceofeachalternativeissystematicallyassessedagainstthecriteriaandrisksareconsideredbeforethebest,balanceddecisionismade. Byusingaprocessthat“unpacks”decisionsinthisway,theanatomyofthedecisioncanbebetterunderstoodandthereforeacceptedbytheleadershipteaminvolvedandtheorganizationthathastolivewiththeresults. TheDecision-MakingProcess Makeadecisionstatement–Yourdecisionstatementspecificallyindicatesachoiceoranactiontobetaken,andtheintendedresultsuchas:“Selectanewaccountingsoftwareprogram”or“Hireanewqualitycontrolmanager”. Developobjectives–Thisisthecriteriaforyourdecision.Whatarethespecificsofyourneed?Forexample,ifyourdecisionistoselectnewaccountingsoftware,whatdoesthenewsoftwareneedtoachieve? MustsandWants–Thisstepdividestheobjectivesintotwocategories.Mustsaremandatoryobjectives.Theymustbeachievedtoguaranteeasuccessfuldecision.AlternativesthatdonotmeetaMustobjectiveareautomaticallydiscounted.ObjectivesnotconsideredasmandatoryareWants.AlternativesarejudgedontheirrelativeperformanceagainsttheWants.Theseobjectivesprovideacomparativepictureofalternativesshowinghowtheyperformagainsteachother. Generatealternatives–Lookforalternativesthatfulfilltheconditionsetascloselyaspossible.Idealalternativesarerare.Youarelookingfortherelativequalityofthefit.Ifyoumustchooseamongseveralalternatives,youwillhavetochooseonethatfulfillsyourobjectiveswiththesmallestacceptablerisk.Inotherwords,abalancedchoice.Ifthereisonlyonealternative,isitgoodenoughtoaccept?Ifyouhavetochoosebetweenacurrentandaproposedcourseofaction,youmustconsiderbothtobealternatives,andevaluateeachagainstyourobjectives. Identifyadverseconsequences–Thisisthemostdifficultstep–andperhapsitisthemost important.Onceadecisionismadeandimplemented,anynegativeconsequenceswillbecomerealproblems.It’scriticalthatyouexploreandevaluatepossibleadverseconsequencesbeforemakingyourdecision.Itmaybepossibletoavoidfutureproblemsaltogetheroratleasttakestepstomitigatethem. Makethebestbalancedchoice–Havingclearlyidentifiedthevalueeachalternativecandeliverandtheriskseachoneposes,youcanweighthepotentialgainsagainst thepotentialpitfalls.Askyourselfwhetherornotyouarewillingtoaccepttherisksofachoicetogainthebenefits.Ifyes,thencommittoit.Ifnot,thenconsiderlessrisky,morebeneficialalternatives. HowOrganizationsBenefitedFromaStructuredDecision-MakingApproach ThedaythelightswentoutatBJCHealthcare Afreakincident(involvingaraccoon,afireandatransformer)ledtoapoweroutageacross13BJChospitalsandseveralserviceorganizationsacrossSt.Louis–impactingthecareofthousandsofpatients. Theentiresystemwasrunningongeneratorpower.Pressurewasmountingwitheverypassinghour–andfindingaresolutionfastwasimperative. ReadhowaBJCfacilitatorusedadecision-makingmethodologytomaintaincalminahigh-pressuresituationandleadtheorganizationtoaswift,successfuldecision. Readmore RapidacquisitionsatRicohresultininsuranceplanchaos Injustfiveyears,RicohCorporationacquiredfivecompanies–doublingthecompany’ssize.Alongwiththerapidgrowthcameanarmyofinsuranceproviders,brokersandoverlappinginsuranceplans. Ricohneededtoreigninthechaoticsituationandarriveatthebestalternativeforemployee insurancecoverage. ReadmoreabouthowstructureddecisionmakingresultedinachoicethatactuallysavedRicoh$1.3millioninthefirstyearwithoutreducingstafforcreatingmajordisruptionthroughouttheorganization. Readmore Thepowerofastructureddecision-makingprocess Executiveleadersareexpectedtomakejudgmentsthatpropelacompanyforward.It’spartofthejob NA.Theymustalsogrowthedecision-makingabilitiesoftheirteams,facilitatedecisionsthatalignwith businessstrategy,andbuildacceptanceoffinalchoices–evenifadecisionisunpopular. Thepowerofastructureddecision-makingprocessliesintheabilityitprovidesleaderstoclarifydecisionmaking,ensureclearunderstandingofthescopeacrossallparties,callonsubject-matterexpertswhenrequired,assessbenefitsandrisks,andaddresscomplex,overwhelmingandunclearsituations. Theworkplacewillcontinuetoevolve,givingrisetonewtypesofissuestobeaddressedandexecutivedecisionstobemade.Atthecoreofstrongdecisionmakingareleaderswhoknowhowtoemployastructuredprocesstoarriveatthebestbalanceddecision,regardlessofthesituation,andknowwitheveryconfidencethatitistherightone. Weworkhardtocreatethetrulyhelpfulanduniquecontent.We’llappreciateyourinterest! Signuporlogintoyouraccounttoreadthewholearticle. Signup Login Related CriticalThinkingSkills:BuildingBlocksfortheNextGenerationofLeaders Readmore ThinkingCorrectlyUnderPressure:FourDriversThatCanHelptoKeepYouonTop Readmore Weareexpertsin: ConsultingSolutions CapabilityDevelopment ContactUs Forinquiries,details,oraproposal! 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