10 Steps to Quality CEO Decision-Making

The buck shouldn't always stop with the CEO but, when it does, there are practical ways to come to the best decision.

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By Joel Trammell

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Quality and speedy decisions elevate the productivity of an organization. CEOs must not only make good judgments themselves, but also grow the decision-making abilities of his or her team, facilitate decisions that support the corporate strategy, and build buy-in for final decisions. Here are 10 steps for CEOs to facilitate better decisions across the organization.

1. Don't make every decision. Only inexperienced CEOs take on every decision no matter how small. CEOs need to make decisions on strategy, resource allocation, hiring and firing that significantly impact the business. Trust your people. Don't allow them to dump a decision on you if they have the expertise and authority to handle it.

2. Make your people take a position. When executives want to discuss a decision with you, make them propose a well considered position. As Bryan Goldberg pointed out in a blog post titled "The most important managerial skill", if you have hired well, your people are smarter than you in their area of expertise. To make the best decision possible, meld your unique experience and big-picture vision with their smarts.

Related: Richard Branson on Decision-Making For Entrepreneurs

3. Act swiftly. CEOs need to get comfortable making decisions with incomplete information. A survey of 200 CEOs by my company, Khorus, found most CEOs operate with limited data on internal business progress much of the time. Waiting for all the information before making a decision risks losing valuable momentum.

4. Change bad decisions quickly. Admitting failure is difficult but refusing to change bad decisions is dangerous. To maintain credibility and efficacy, reverse bad decisions before it's too late.

5. Assign a devil's advocate. Some decisions, such as a major acquisition, are almost impossible to reverse and therefore carry tremendous risk. Careful analysis and thorough discussion are critical. Assign a senior person to play devil's advocate, testing conclusions and identifying any weaknesses. That will significantly aid decision-making.

6. Communicate the "what." Rumors and distortions get started when people hear about your decisions secondhand. Communicate the details about your significant decisions directly to your employees.

Related: How to Sharpen Your Decision-Making Skills

7. Communicate the "why." Smart, talented people also need the "why" in order to process change and shift their opinions. Always communicate the basic reasoning behind each decision to facilitate comprehension, support and buy-in. This will also help your team make better future decisions.

8. Support your people, unless they are wrong. If you require your people to propose a solution and you agree with it (or do not have a better answer), give them credit if things go well and back them if things don't. However, at times you will have to make a tough call that goes against the consensus. Reiterating step seven, it is important to explain why you are overruling everyone.

9. Do not overrule your people often. If your team is applying the company's strategy, vision and goals when making decisions, then they will probably agree on the right decision. However, if you often find yourself at odds with your team, then there is a problem. Frequently overruling people is not desirable, while achieving consensus is not always possible. Balancing between these extremes is critical to success. At times you must make a unilateral decision and move on. When the decision is not time sensitive or critical, to try to build consensus.

10. Conduct an official postmortem. The best way to know if a decision was the right one is to conduct an official postmortem. Strategic decisions should be reexamined through the regular review of key metrics and overall performance. Without a formal postmortem process, it is easy to avoid reexamining the issues or learning anything from the decision. With a formal postmortem, the organization can grow in its ability to make decisions.

It's impossible to have a perfect decision-making record but following these 10 steps can facilitate better decisions and dramatically increase the productivity of your organization. Having a process to deal with decisions at all levels will help everyone improve their decision-making abilities and better support the organization's goals as a result.

Related: Five Tips for Making Better Decisions

Joel Trammell

Veteran CEO; CEO, Black Box; Founder, Khorus

Joel Trammell is CEO of Black Box, which provides IT infrastructure services, and the founder of CEO software company Khorus. He is also the author of the The CEO Tightrope.

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