The only thing that everyone has in common on the planet is the undeniable fact that we all feel part of the regrettable decision. Show me someone who has not made a bad decision and I will be someone who is unfair or someone’s decisioning avoids at the expense of showing everything up. Making good decisions is a set of skills that must be developed like others. As a person who works with CEOs on a daily basis, I can tell you with certainty that all leaders are not created equal with respect to the competence of their decision-making competencies. Nothing will test your leadership courage more than your ability to make decisions.
Why do the leaders fail? They make bad choices leading to bad decisions. And in some cases, they aggravate the wrong decision of bad decision. You can not divorce leadership decisions, because whether they like it or not, they are inexorably linked. In other words, the result of a leader’s choices and decisions can, and usually do or break them. The fact of the matter is that senior executives who ride to the C-suite do so largely based on their ability to make the right decisions. What most do not realize is then that years of solid decision-making can take to reach the meeting room, often takes up a bad decision from the ivory tower. As much as you wanted was not when it comes to a leader, you are really as good as your last decision.
Here is the thing – even leaders who fail to make bad decisions from time to time. When I think of the bad decisions I made, it was not that I could not make the right decision, but for some reason I did not use the methodology of her Decisioning. Gut instincts can you so far in life alone, and everyone who works outside a solid framework of Decisioning will end up being the victim of an act of surveillance, misinformation, misunderstanding, manipulation, Impulsivity or other negative influence.
The first key to understanding how to make big decisions is to learn the overwhelming amount of incoming information executives must deal with doing the synthesis on a daily basis while allowing the best decisions in a timely manner. The key to processing large amounts of information is easier to distinguish in the filtering of different entries.
Provided there is a hierarchy of knowledge is essential when trying to make informed decisions. Newsflash – Not all entries must weigh in someone’s decision making process. By developing a qualitative and quantitative filter mechanism for the Decision Process, you can make better decisions in a shorter period. The hierarchy of knowledge is as follows:
- Gut Instincts: This is an experience and / or emotional filter that can often have no justification for hard analytical support. That said, in the absence of other filters Decisioning can sometimes a whole person must continue to make a decision. Even more sophisticated analyzes are available, you can intuition often a very valuable intestinal check on the reasonableness or bias of other inputs. The great take away here is that intuitive decisioning can be refined and improved. My advice is to actually work to become very demanding.
- Data: The raw data consists of various facts, statistics or random entries and -to-hold low value. To draw conclusions on the basis of the data in its raw form will lead to erroneous decisions based on incomplete data.
- Information: Information is just an evolution, or more complete set of data. Thus, from a collection of data processed with context and meaning are added to various facts that provide further investigation.
- Knowledge: Knowledge is information that has been refined by analysis in such a way that it is taken up, tested and / or validated. More importantly, usable knowledge with a high degree of precision, as proof of concept exists.
Although people often deal with theory and opinion as a fact, they are not one and the same. I have seen many an intelligent framework blur the boundaries between factual results and fiction in a wrong decision to make decisions under extreme pressure and its outside Decisioning framework. Decisions made about bowel feeling or level of data can be taken quickly, but present a higher risk. Decisioning at the information level provides a higher degree of risk management, but still are not as safe as decisions based on exploitable knowledge.
Another aspect that needs to be incorporated into the decision making software process is the source of the input signal. I believe that Cyrus the Great, who said: “Diversity of advice, unity in command” which means that good leaders seek to maintain the opinion of others but control the final decision. While most successful executives subscribe to this theory, the real issue is not if you should seek advice but in fact, where and how much you should try out advice. You see more input or bad input, not necessarily adding value to a decisioning process. Volume due to volume do not tend to confuse questions and will collect comments from sources that can not make a significant contribution is probably a waste of time. Two other issues that should be taken into account in your Decisioning process regarding the source of entries are:
- Credibility: What is the balance sheet of the source? The reliable and credible source? Are they providing data, information or knowledge? The source tell you what you want to hear what they want to hear you, or they unedited version of the hard and cold truth?
- Bias: Are there competing programs hidden and / or who receive input colors? If the entry is intended for the source or for the benefit of the company?
Performance and timeliness with which decisions are to be made, is a disaster for potential recipe for today’s executive, unless putting some methodology for Decisioning in place. If you include these parameters in your Decisioning framework you will minimize the chances of making a bad decision:
- Conduct an analysis of the situation: What motivates the need for a decision? What would happen if there was no decision? Who will be the impact of the decision (direct and indirect)? What data, analysis, research or support information do you need to validate your driving decisions?
- Subject to your decision at public scrutiny: There are no private decisions. Sooner or later, information about a decision will probably come out. If your decision on the first page of the newspaper were printed, how would you feel? What would your family think of your decision? How would you feel the shareholders and employees about your decision? Did you seek advice and / or feedback before making your decision?
- Perform a cost-benefit analysis: Are the potential benefits of the decision justifying the expected costs? What if costs exceed projections and benefits below projections?
- Assess the risk / reward ratio: What are all possible rewards, and in contrast to all potential risks are the odds in your favor if they are against you?
- That this is the right thing to do: behind the decisions that not everyone specifically requires a lot of bravado. On the other hand, behind what they believe to be the right decision in the face of enormous controversy is the stuff of great leaders are made. My wife always told me that “you can not go wrong by going right,” and as usual, I find myself sitting on her board. There are many areas where compromise provides important benefits, but your value system, character or integrity must never be compromised.
- Making the decision: Perhaps the most important, you must have a bias for action, and are willing to make the decision. Additionally, you need to learn the best possible decision even if you do a complete possession of incomplete data. Do not fall prey to the paralysis of the analysis, but rather to make the best possible decision on the information at hand, using some of the methods mentioned above. Opportunity and not static, and the law of decreasing returns applies to most occasions as the more you expect to seize the opportunity the more return is typical. In fact, it is more likely that the opportunity will completely evaporate if you wait too long to catch it.
- Bonuses – Always have a backup plan: The real test of a leader is what happens in the moments after realization that they have made the wrong decision. Great leaders include all plans are made up of both constant and variable, and that sometimes the variables against you. Intelligent leaders always have an emergency plan to know the conditions can sometimes fall outside the bounds of reason or by check – not “Plan B” is equal to an imperfect plan.
If you have another opinion and / or suggestions on how to make better decisions, you can share them in the comments below