Great Leaders are Great Decision-Makers - Graziadio ...

Great leaders balance emotion with reason and make decisions that ... Keep options fewer than five and you will find it much easier to make a decision. JournalLeadershipGreatLeadersareGreatDecision-MakersGreatleadersunderstandhowtobalanceemotionwithreasonandmakedecisionsthatpositivelyimpactthemselves,theiremployees,theircustomersandstakeholders,andtheirorganizations.[powerpress:http://gsbm-med.pepperdine.edu/gbr/audio/fall2010/Kase-decisions.mp3]LeadershipAAAWhenwethinkofwhatmakessomeoneagreatleader,onecharacteristicthatcomestomindisdecisiveness.Wedonotenvisionsuccessfulleadersstandingaroundappearingunclearanduncertain.Instead,weviewthemaspeoplewhoareabletoquicklyarriveattheirdecisionsandcommunicatethegoalstoothers.Leadersoftenhavetomakechallengingdecisions,suchaswhatdirectiontomovetheircompanyin;whethertokeepanemployee,repositionthemorletthemgo;whetherornottoshare“badnews”withstockholders,andmanyothersuchchallenges.Greatleadersunderstandhowtobalanceemotionwithreasonandmakedecisionsthatpositivelyimpactthemselves,theiremployees,theircustomersandstakeholders,andtheirorganizations.Makinggooddecisionsindifficultsituationsisnosmallfeatbecausethesetypesofdecisionsinvolvechange,uncertainty,anxiety,stress,andsometimestheunfavorablereactionsofothers.Greatleadersalsoknowwhentomovequicklyandproceedwiththeavailableinformation,versuswhentotakemoretimeandgatheradditionalinformation.Whenleadersopttopursueadditionalinformationoravenues,theymustalsoknowwhentostop.Whilealargeamountofdatamaybedesirableinaperfectworld,thedatagatheringprocesscanutilizetoomuchtime,andthevastamountofdatacanalsobeparalyzingandtakeattentionawayfromthebigpictureorkeydatapoints.Thisarticlewillexplorethreecrucialqualitiesthatgreatleadersmustdeveloptobecomegreatdecision-makers:emotionalintelligence,theabilitytohandleuncertainty,andtheabilitytoweighevidencewithintuition.Thearticleconcludeswithastep-by-stepprocessemployingthesecharacteristicstoarriveatthebestpossibledecisiongiventhemanyvariablesthatcanandwillcomeintoplay.EmotionalIntelligenceEmotionalintelligence,theabilitytounderstandandmanageyouremotionsandthoseofothers,isoneofthemostimportantqualitiesaleadermustpossess.AccordingtotheauthorsofPrimalLeadership,aleader’semotionsarecontagious.Thisiswhyresonantleadershipissoimportant—aleader’smoodwillresonatewithothersandsetthetonefortheemotionalclimateinanorganization.[1]Emotionalintelligenceconsistsofself-awareness,self-management,socialawareness,andrelationshipmanagement.Self-awarenessisthefoundationforallaspectsofemotionalintelligence.Itinvolvesbeingabletoaccuratelyassessyourself.Beforeyoucanchange,youmustbeawareofyourthoughts,feelings,andactions.Self-managemententailstheabilitytounderstandandcontrolyouremotions,adapttochange,andadoptanoptimisticoutlook.Socialawarenessissimilartoself-awarenessbutthefocusisexternalandinvolvesunderstandingthethoughts,feelings,andactionsofothers,aswellashowtorelatetootherpeople.Relationshipmanagementiscrucialforgreatleadershipandincludesqualitiessuchasbeinginfluentialandinspirationalanddevelopingothers.Herewewillfocusononeofthecorecomponentsofself-management:emotionalself-control.Whenyouhavedevelopedthisskill,youwillrecognizeyouremotions,beinfluencedbythem,butnotblindedbythem,andbeabletocalmlyandclearlyexpressyourdecisionstoothersevenwhenyouexperienceintenseemotionswithinyourselfandfromothers.EmotionalSelf-ControlandDecisionMakingImaginethatyouwerepresentedwithacriticalhigh-stakessituationwithasignificantpotentialdownsideandyouneededtomakeadecisionandtakeactionrightaway.Youwouldlikelyhaveasignificantemotionalreaction,includingfeelingssuchasanxiety,fear,oranger.Unfortunatelyemotionssuchasthesecloudourabilitytomakegooddecisions.Whenwegetintotheemotionalpartofourbrain,ourinnatereactionistoprotectourselves.Wegetanadrenalinerushorflight-or-fightresponse,andshort-termsurvivalistheimmediategoal.Asyoucanimagine,beinginthisstateisnotparticularlyconducivetomakingstrategic,long-termdecisions.Thisiswhyemotionalself-controlissoimportant.Greatleadersareawareoftheiremotionalstateandareabletomanageintenseemotionssotheycanmakesmartdecisions.ReigninginEmotionsforStrategicDecisionsInordertomakestrategic,long-termdecisions,wemustknowhowtobringdowntheintenseemotionalreactionsothatwecanengageadifferentpartofourbrains(theprefrontalcortex),whichisresponsibleforlookingatthebigpictureandlong-termplanning.Paradoxically,thewaytodothisistoacceptandallowwhateveremotionalreactionwearehavingandchoosetofocusonthefactsasmuchaspossible.[2]Tryingnottoexperienceanemotionisliketryingtopullarollercoasterbackwardsasitheadsdownthehill.Ittakesalotofeffort,whichultimatelybackfiresandwefeelworse.Instead,simplyjumponboardandrideitout.Theintensityoftheemotionswillquicklypassandthenyoucanthinklogically.Thegoal,however,isnottotakefeelingsoutofthedecision-makingprocess.Itissimplytokeepthemfromtakingoverandlosingemotionalself-control.ManagingUncertaintyandChoicesWhyisitsodifficulttomakedecisions?Perhapsitisbecausethevariablesandtheoutcomesareoftenuncertain.Wedonotlikeuncertainty.Uncertaintycreatesdiscomfortandanalysisparalysis.Wetrytoanalyzethesituationfromeveryangletoalleviatethesenseofuncertainty.Theseeffortsareoftenfutileandwastevaluabletimeandenergybecausesooftenwemustmakedecisionsinthefaceofuncertainty.TheLengthsWeGotoAvoidUncertaintyIna1992studyconductedbycognitivescientistsAmosTverskyandEldarShafir,collegestudentswereaskedwhethertheywouldpurchaseagreatdealonatriptoHawaiiovertheirholidaybreak.Theyweretoldthattheywouldreceivethegradeontheirmostimportantexambeforetheyhadtodecide.Ofthosewhoweretoldthattheypassedtheexam,57percentsaidthey’dgoforthetrip.Interestingly,asimilarpercentage(54percent)ofthosewhoweretoldthattheyfailedalsosaidthey’dgo.Whenresearchersdesigneduncertaintyintothemix,resultschangeddramatically.Studentsweretoldthattheywouldnotreceivetheexamgradefortwodaysandthattheycouldbuythetripnow,passonitnow,orpay$5towaitfortwodaysuntiltheyreceivedtheirgrade.Themajorityofstudents(61percent)saidthattheywouldwait.Thefirstpartofthestudyshowedthatstudentsforthemostpartwantedtogoiftheypassedoriftheyfailedtheexam,butheretheywerewillingtopaytowaitandfindouttheirgrade.Thisstudyshowsthelengthsthatwewillgotoavoiduncertainty.Studentsseemedtothinkthatknowingtheirgradewouldhelpthemmakeagooddecisionwheninrealityitwouldnotmakeadifferenceintheirdecisions.Weareoftenparalyzedbyuncertaintyandendupbasingourdecisionsonthingsthataren’tevenrelated.Questionyourattemptstofindcertaintybeforemakingdecisionsbecauseyoumaybeseekingafalsesenseofsecurity.Muchliketheaforementionedmethodtoreigninnegativeemotionstoachieveemotionalself-control,acceptanceisacrucialstartingplace.Ifweareabletoaccepttheuncertaintyratherthantrytoresolveit,wecanfocusourlimitedtime,energy,andmoneyonmakingthebestdecisionsinthefaceofanuncertainoutcome.Thisdoesnotmeanthatyoushouldnotbothertoanalyzeasituationbeforemakingadecision.Variousanalysescanbehelpfulinprovidingtheinformationnecessarytomakethebestdecisionsinthesituation.Thekeyistoknowwhenwhatyoudon’tknowisimportant,andifso,howtogoaboutgatheringthenecessaryinformationtoresolvetheuncertainty.Ifwhatyoudon’tknowisnotimportant,thenthenextstepistoaccepttheuncertaintyandproceedinspiteofit.If,however,youfindyourselfgettingstuckorinvestingtoomuchtimeorotherresourcesintheanalyses,askyourselfiftheuncertaintythatyouareattemptingtoresolveistrulyresolveable.Ifnot,itwouldbebesttoaccepttheuncertaintyandmoveon.LimitYourChoicesOneofthedecision-makingmistakeswecommonlymakeistogiveourselvesalotofoptions.Wefigurethatifweconsidereverypossiblealternative,wewillhavebetterchoicesandmakethebestdecision.Sometimeswedothisexhaustivesearchasawaytoresolveuncertainty.Weassumethatifwegothrougheverything,nostonewillbeleftunturnedandtherewillbenouncertainty.Theproblemisthatwearelikelytogetoverwhelmedandmakenodecision.In2000,SheenaIyengarofColumbiaBusinessSchoolandMarkLepper,chairmanofStanford’spsychologydepartment,conductedastudyinwhichtwotastingdisplaysofgourmetjamsweresetupinanupscalesupermarket.Theyhad24jamssetupfortastinginonedisplay,andjustsixjamsintheother.Theyfoundthatmorepeoplewereattractedtothetablewith24,anequalnumbertastedatbothtables,andahugedifferenceinpurchasingresulted:only3percentofthosewhohadtastedatthetablewith24jamsboughtajar,whereas30percentofthosewhohadtastedatthetablewithsixjamsboughtajar.[4]Thisstudyandvariousotherslikeitshowthatwhentherearemorethanfiveorsixoptions,peoplehaveamoredifficulttimedecidingandoftenoptnottomakeadecision.Tohelpyourselfandotherseffectivelyandefficientlymakedecisions,limityouroptions.Keepoptionsfewerthanfiveandyouwillfinditmucheasiertomakeadecision.TrustingYourIntuitionExcellentleadersoftensaythattheygowiththeirguttomakedecisions.Theyareabletotrustthemselvesandtheirexpertiseandnotgetstuckinthecycleofover-thinking.Themoreyouknowaboutasubject,themorereliableyourintuitionwillbe.Makeyourselfanexpertinyourfieldandyourintuitionwillbeyourbestguide.IntuitionLeadstoSatisfactionwithDecisionsParticipantsinastudyconductedbyTimothyD.WilsonandhiscolleaguesattheUniversityofVirginiaandtheUniversityofPittsburghwereaskedtochooseapieceofarttohangintheirhomes.Halfofthemwereaskedtothinkrationallyabouttheirchoice,andtheotherhalfwereinstructedtogowiththeirgut.Thosewhowentwiththeirfeelingsratherthantheiranalysiswerehappierwiththeirselection.Wecanrationalizeourwayintoanything,butourfirstimpressionsoftentellushowwereallyfeel.[5]HowtoHearYourIntuitionYoumayhaveheardintuitiondescribedasanagginglittlevoiceinsideyou.Ittypicallyspeakssoftlyratherthanscreamingoutatyou.Unfortunatelyinournon-stop,busy,technology-filledworlds,itcanbeeasytonothearourintuition.Itisalwaysspeaking,butweareoftennotlistening.Honeyourskillsatlisteningtoyourintuitionbybuildingsomeformofmeditativepracticeintoyourdailylife.Itdoesn’thavetobeactualmeditation;itcanbeafewmomentsofreflection,awarmbath,awalkwithyourdog,andsoon.Wearetypicallysobombardedwithinformationallday(television,radio,Internet,cellphone,Blackberry…)thatwemissoutonopportunitiestonoticeourselvesthinkingandfeeling.Tohearyourintuitionyoumusthavesometimewhenyou’reahumanbeing,notahumandoing.Buildperiodsofquietintoyourlifeandyouwillbesurprisedatwhatyouhear.DecideYourWaytoGreatDecisionsGreatdecisionmakingtakespractice.Asyounowknow,thisprocessrequiresacertainlevelofcomfortwithdiscomfort.Wecouldplayitsafeanddeferimportantdecisionstoothers,spendhoursandhoursanalyzingandagonizingovereveryoption,orwecouldacceptthelevelofriskandgoforit.Manypeopleareafraidofmakingabaddecisionorthewrongdecision.Wecanonlydoourbestwiththeinformationwehaveavailabletousatthetime.Thereistypicallynotarightorawronganswer.Intheworst-casescenario,however,youselectthewrongoption.Evenifyouchooseanoptionthatrevealsitselftobeinferiorintheshort-term,youwilllearnthatyoucanhandletheoutcomeandmakethebestofit.Youmayevenfindunexpectedopportunitiesbygoingdownthe“wrong”path.Practicethisprocessusingthefollowingsteps:Decidewhethertotakeactionquicklyorgatheradditionalinformation.Ifyoudecidetogatheradditionalinformation,createparameterstodeterminewhatinformationisessentialandwhentoceaseyourinformation-gatheringprocess.Beawareoftheemotionsthatcomeupasyouproceedwithyourdecision.Accepttheemotionsandallowthemtoguideyouwithoutcontrollingyou.Recognizetheuncertaintyelementsinthesituationanddecidehowmuchoftheuncertaintyneedsresolution.Knowthatmostsituationscannotbecalculatedwithcompletecertaintyand,eventhoughitmaybeuncomfortable,itisoftennecessarytoaccepttheuncertaintyandproceed.Allowyourselftohearyourintuition.Donotover-thinkimportantdecisionsbecauseyoumaytalkyourselfintosomethingthatgoesagainstyourinstinctsandexperience.Seekoutopportunitiestothoughtfullyandproactivelymakechallengingdecisions.Recognizethateven“negative”outcomesmaybebetterthanyouexpect,andgainconfidenceinyourabilitytomakegreatdecisions.Bealeaderinyourpersonallifeandcareerbycommittingtomakedifficultdecisionsinatimelymanner.Thebestwayyoucaninspireotherstochangeisbymakingchangesyourself.Practicethisprocessandbecomeaconfidentleaderofyourselfandothers.Justthinkofallofthetimeandenergyyouwillsaveintheprocess,andhowgreatyouwillfeelasyouremaincalm,trustyourself,andmakegreatdecisions.[1]DanielGoleman,RichardE.Boyatzis,andAnnieMcKee,PrimalLeadership,(Boston:HarvardBusinessSchoolPress,2004).[2]DanielH.Barlow,AnxietyandItsDisorders,SecondEdition:TheNatureandTreatmentofAnxietyandPanic,(NewYork:TheGuilfordPress,2004).[3]AmosTverskyandEldarShafir,“TheDisjunctionEffectinChoiceunderUncertainty,”PsychologicalScience,3(1992):205–209.[4]SheenaIyengarandMarkLepper,“WhenChoiceIsDemotivating:CanOneDesireTooMuchofaGoodThing?”JournalofPersonalityandSocialPsychology,79(2000):995–1106.[5]TimothyD.Wilsonetal.,“IntrospectingaboutReasonsCanReducePost-ChoiceSatisfaction,”PersonalityandSocialPsychologyBulletin,19(1993):331–339.BacktotopLeadershipShareFacebookTwitterLinkedinemailAuthorofthearticleAuthor'sprofileLarinaKase,PsyD,MBALarinaKase,PsyD,MBA,isaprofessionalspeaker,author,andrecognizedexpertinpeakperformance,anxietyandstressmanagement,leadership,andentrepreneurship.Kaseholdsadoctorateinpsychologyandmaster’sinbusinessadministration,andheruniqueapproachhasbeenfeaturedinmagazinessuchasInc.,Entrepreneur,andSELF,andonnationalTVandradio.ShehascoachedexecutivesfromcompaniessuchasVerizon,Intel,MorganStanley,andErnst&Young.TheauthororcoauthorofsevenbooksincludingTheNewYorkTimesbestseller,TheConfidentSpeaker,herlatestbook,TheConfidentLeader,isabouthowtoutilizeemotionalintelligence,anxietyandenergymanagement,andinspirationalleadershiptoconfidentlymakedifficultdecisionsandaddresskeychallenges.GraziadioBusinessSchool|Copyright©2010PepperdineUniversityMorearticlesfrom2010Volume13Issue4Attn:TheCornerOffice–WhyU.S.FirmsShouldPaySpecialDividendsBeforeYear-End2010Currentlowtaxratesondividends,combinedwithlowborrowingcosts,representanhistoricopportunityforU.S.firms,butthewindowisalmostcertaintocloseDec.31,2010.ByJohnBriginshaw,PhDAccounting/Finance/InvestingTheCharismaofTwitterTwitterisaformofelectroniccharismathatcanattractorrepelfollowers.ThisarticleexplorestheusesandlimitationsofTwitterandanalyzesitssuccessbasedonthedefinitionofcharisma.ByShirleyBlack,JD,LLMMarketingLessonsfromtheNewDodd-FrankFinancialRegulatoryReformLawThepathtothenewDodd-FrankWallStreetReformandConsumerProtectionActechoesthatofanothercontroversialbusinessreformlaw,theSarbanes-OxleyActof2002.Whatcanbelearnedfromthesetwolawsandthebusinessscandalsthatpromptedthem?ByLarryBumgardner,JDBusinessLawTheChangingRoleoftheResidentialRealEstateBrokerTheemergenceofonlinediscountbrokerages,unbundlingofservices,anddisintermediationarethreetrendsthatwillcontinuetochallengethetraditionalroleoftherealestatebroker.ByAlexisLieb,MBA,TraceyNicholson,MBAandNelsonGranados,PhDStrategy2010StudentPaperWinner:UsingSocialMediatoGrowYourBusinessBusinessescanbestbenefitfromsocialmediabyhavingagoodoverallstrategyandknowinghowtolisten,participate,andmeasureresults.ByAregBagdasarian,MBAandSteffanieTamehiroMarketingEditor’sNote:NewLook,NewName,StillGreatContentWiththisissuewearedelightedtointroduceyoutoournewname,theGraziadioBusinessReview,andbringyouournewdesign,whichwethinkyouwillfindmuchmoreuser-friendly.ByNancyEllenDodd,MPW,MFAEditorialsRelatedArticlesPandemicDemonstratestheNecessityofIntuitiveDecision-MakingS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