Cynefin frameworkImportance of decision making for leadersLeaders should always make decisions on their own without input from othershow leadership affects decision-makingleadership decision-making examplesEffective leadersLeader decision makingImportance of decision-making in leadershipHow Leaders Use Balanced Decision-Making Skills to Move ...
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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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