Constant decision-making is the nature of leadership. Decisions that leaders must make tend to carry much more weight than making typical everyday choices. Success or failure for many people often hangs in the balance when a leader is weighing an important decision. In so many cases, the outcome will positively or negatively impact careers and livelihoods of workers, their families, the larger community, even potentially the global community in decisions by leaders of multinationals. So, clearly, a top criteria for management is development of leadership decision-making skills. But, hey, no pressure.
On the bright side, even those everyday decisions mentioned above do carry their own modicum of risk. Okay, that’s not actually much comfort. After all, as you can easily imagine — bearing responsibility for making a decision that can lead to major consequences for other people’s lives is going to be an intimidating prospect. And, there’s a big wrinkle in the already too messy reality of the situation, which is that nobody is right all the time.
For real relief, however, there is good help for leaders in the experience and wisdom of those who’ve been there and done that. With some knowledge of sound leadership decision-making techniques, you can develop your understanding of what it takes to make good decisions at the highest levels of organisations, and thereby better prepare yourself for that challenge.
What Does a Leadership Decision Entail?
Leadership decision-making is about evaluating information and using it to help dismiss some options for action and to choose another instead. All leadership decisions are expected to align with the organisation’s core values, policies, mission, vision, goals, objectives, and external considerations (like laws and regulations). So, yeah, there’s all that. A leader is obviously already facing an exceptionally complex decision making proposition, before even getting around to considering the content of the particular choices to be weighed in any given leadership decision.
Decisions generate actions. Recognising this fact of nature puts things in perspective. As we’ve pointed out, a personal decision leads to an individual action (which may or may not ultimately affect the whole world, depending on your philosophical persuasion) — whereas a leadership decision can be expected to impact many people.
What’s exciting about that is that as a leader, your decisions are the catalyst for motion of a whole population of employees, contractors, and vendors. Every comprehensible creative innovation, strategic plan, operational system and process, every program, every activity circulating in the corporate organism is driven by the life force of the leader’s decision. Too dramatic? Overstated? No, not really.
After all, when something does occur that is not according to the intended direction of the leadership, that can be understood as analogous to some anomaly leading toward consequences for the organisation that its decision maker did not intend, i.e., a metaphorical illness in the business organism.
So, every move that is made by anyone or anything that is part of an organisation is due to a leader’s understood decisions. That’s the same way our own bodies work. No less than this profound relation between thought and action is entailed in leadership decisions. Therefore, the more important question is really, “What is involved in good leadership decision-making?”
Primary Leadership Decision Making Skills
Highly skilled leaders have enough management experience to have developed deeper insights into common kinds of problems that organisational leaders can expect to encounter. Their experiences inform their judgment. So, they have accumulated a wealth of internal resources for making good leadership decisions.
Good judgment does need some understanding of options, but that final intellectual phase of making a decision goes beyond the evaluative stage and draws from other inner reservoirs — of character, maturity, motivations, passion, sense of mission, among others.
Setting that matter aside for the moment, here are the strategic methods that highly skilled leaders use to make decisions on the job:
- Recognise which decisions require more thorough consideration and which can be made with less information and analysis.
- Take care in separating facts from opinions, and consider both to the appropriate degrees.
- For more complex decisions, take an appropriate amount of time to gather and analyse as much relevant information as possible to use in forming a conclusion.
- Evaluate options, and make sure you understand the reasons why some are better than others.
- Accept the need to make some decisions in circumstances where information is lacking or vague.
- Ask for suggestions, advice, guidance or other support from experienced people.
- Use side-by-side evaluation of the pros and cons of the strongest-seeming options.
- Clearly define the problem and the predictable effects of your decision for all stakeholders.
- Analyse and interpret relevant data and information (such as in available tables, charts, graphs, etc.) in your evaluation of options.
- Identify reasonable alternatives and possible acceptable compromises.
- Keep in mind that others’ strong opinions are not foregone conclusions. Listen carefully, but use your own decision process.
- Learn from mistakes, failures, and successes of others in previous similar decisions.
- Identify critical peripheral factors that could compound the consequences of a decision.
- Consider the possible advantages in not acting at all, of delaying making a decision to a later date, either to let a situation resolve itself or to wait till more information can be obtained.
- Use tools like software analytics, equipment tests, experiments, academic findings, and others that may help support a decision-making process.
- Escalate thorny decisions for collaboration with, guidance from, or deferral to higher authorities.
- Engage stakeholders in your decision-making process. Collect as much input as feasible, in cases in which decisions will have significant impacts on employees, investors, and other stakeholders.
- Expect disagreement, due to varying levels of consideration given to facts and options during collaborative decision-making processes.
- Factor in your intuitions about the choices you think are most and least likely to lead to the best outcomes.
- Look at the list of typical decision biases, and examine yourself, to help ensure you’re not moving to inferior conclusions based on unconscious bias(es).
- Ask what’s wrong with the option that makes the most sense to you, and what you may be overlooking in your thought process.
- Make sure every decision you make is within the boundaries of your own ethical principles. Ensure your boundaries align with your organisation’s ethics.
- Accept that every decision you make bears the risk of being wrong, and do not allow that reality to intimidate you into indecisiveness.
How Do Poor Leadership Decisions Happen?
Our brains naturally filter out countless sensory inputs every minute. That’s a good thing. It prevents information overload and enables focus on the inputs that are relevant for addressing purposes of the moment and fulfilling future plans. So, our capacity to ignore information is crucial to our ability to function at all in the world.
That’s not the same thing as overlooking inputs that are needed for good decision-making. Leaders need a sharp eye for what’s important in their roles and strong ability to process information and make choices quickly. Bad decisions are often made impulsively, failing to take in all the necessary considerations.
In other words, many poor management decisions are made due to neglect of potential consequences, failure to pay attention to other key facts on the ground, or missing something else, for examples:
- Failure to gather and weigh the necessary information
- Failing to recognise the risks in the option chosen
- Ignoring opinions that conflict with the decision-maker’s view
- Lack of objectivity, impact of one or more common decision biases
- Prioritising short-term gratification over greater long-term benefits
- Risk aversion, decisional paralysis due to fear of adverse outcome
- Shoot-from-the-hip mindset, over-confident thoughtlessness
- Ponderous, lengthy approach to decisions that don’t require much analysis
- Rejection of help, refusal to find solutions through collaboration
- Lost in irrelevant details, perfectionistic pursuit of fine specifics
Self-Development Plan for Leadership Decision-Making Skills
Equipped with all these great tips on how to make decisions in leadership, you’re ready to start your leadership decision-making self-development process. First, perform a little self-evaluation of your preparedness for making management decisions:
Reflect on the extent of consideration you give to making decisions at work. Is it your practice to approach decisions in a pretty methodical way? Or, would you say you tend to be more impulsive, often shooting from the hip without much or any evaluation of facts? Go down the lists above of leadership decision-making skills and deficiencies. Check off all on both lists that apply to you. Look back at some of the most significant decisions that you recall making over recent years. What have you learned from significant good and bad decisions you’ve made so far?
If your decision-making track record in management is short, or longer but not exactly stellar, spend time to work on this area of your leadership development.
Here are some exercises you can do to help you develop your leadership decision-making skills:
- Routinely read articles and books on leadership decision-making. Note items that you believe you need to work on, and reread those parts of the material to help you form habits in your thinking.
- Going forward, as you make important decisions at work, consider which cognitive biases may be influencing your decisional process, such as Focalism, Frequency Bias, Anchoring, and any one of about fifty others. Review the Business Insider list of the many possible unconscious biases.
- Evaluate decisions you’re aware of that other leaders have made which have positively or negatively impacted the success of processes and larger operations at your workplace. Consider what different decisions you would have made, and why.
For a big self-test: Evaluate needs in your area of responsibility at work, in terms of organisation, communications, systems, processes, metrics, team skills, guiding people at work, etc., and think about the kinds of decisions that need to be made to increase efficiency, productivity, quality, employee engagement, customer satisfaction, etc. Pick an area of need, and embark on a decision-making process to identify options and determine the best available solution. Congrats! You’ve made a big leadership decision!
Business managers are faced with an onslaught of decisions to make every day, some simple, some more complex, some pretty mind-boggling. Operating under pressure, grappling with sets of complex choices bearing high-stakes consequences, sorting through often incomplete or conflicting facts and opinions to render clear-enough perspectives for decisions is the daily reality for a leader.
Complex decision-making is not easy, and the leader’s decision-making success and the company’s financial outcomes are inseparably linked in the profit margins. So, a leader must have a much better than just average decision-making acumen. That’s why the best leaders work to strengthen their management and decision-making skills in key areas, such as communications, personnel management, marketing, product development, finance, business ethics, and so on.
Ultimately, good business decision-making requires development of skillset that must be largely acquired through real-world experience. However, developmental leadership training can fill in major gaps in otherwise highly competent professionals’ skill sets. Learning the key leadership decision-making fundamentals will increase your confidence in your decision-making abilities, and can help maximise the positive impact of your personal power as a leader on your workplace environment and your team’s success.
In the final analysis, decision-making is the largest part of leadership. So, perhaps the best overall advice you can get for improving your management skills more generally is to evaluate your leadership experience and your decision-making success rate, and undertake the commensurate extent of developmental training and coaching in leadership decision-making.