A 3-Step Process to Making Better Decisions
Knowing if, when and how to make decisions requires experience and self-awareness.
No area of leadership exposes a CEO's weaknesses quicker than his or her approach to decision making. Some CEOs procrastinate for fear of making a wrong decision. Others spend too much time trying to build consensus. Some want to make every decision no matter how small. Still others dictate decisions without consulting anyone. As a pattern of behavior, these approaches can bring an organization to a standstill and decrease morale.
Most of the time, balancing between these extremes is critical for success. There are times when the CEO needs to dictate a decision for the good of the organization. When a decision is not as time sensitive or important, the CEO should look for ways to achieve consensus and coach employees.
Knowing if, when and how to make decisions requires experience and self-awareness. Putting a process around decision making can help you guard against your weaknesses and be more effective. Used consistently, a good process can facilitate quick decisions at the right level, train employees on their decision-making skills and produce better results.
Here is a three-stage process to consider.
1. Decision-making triage.
This first stage prompts you to sort decisions into one of three categories based on business impact:
- Less significant decisions. The decision, on its own, won't impact the business overall in a considerable way. Use this as an opportunity to coach your staff on making sound decisions. Unless the decision impacts more than one department, require employees to make decisions within their areas of expertise rather than abdicating them to you. Eventually, your team should make the same decisions you would make with the same information. This frees up your time to focus on more difficult decisions.
- Easy, but significant, decisions. The pros and cons of various options are clear, but the outcome will affect the entire business. Involve the executive team for their expertise and buy-in, especially if the decision involves multiple groups. Their input may lead to a consensus choice or new information on the issue.
- Difficult and significant decisions. The options are complicated, and the decision will make a difference to business operations and results. Consult with the executive team, but the buck stops with you. You alone are responsible for making the final decision.
The second stage helps foster commitment to the decision even when consensus isn't possible. It also helps the organization learn from the decision.
When you make a decision, immediately communicate it to everyone who may be impacted. Failure to do so will waste valuable time and cause confusion as the decision slowly trickles down to all employees. Similar to a child's game of telephone, the message will get distorted.
Also explain the basic reasoning you used to reach the decision. For example, let's say you are currently operating under the principle that growth is more important than profits. If you make a decision based on this, it's critical to remind people of it. If you don't, employees may not understand the decision, know how they can act to support it or buy into it.
The constant reminder of your core operating principles enables employees to consistently act in ways that promote them. Over time, fewer decisions will reach your desk, because the staff will understand your intent.
This part of the process entails conducting an official postmortem for every significant decision, enabling you to reverse any bad decisions or make course corrections. The postmortem should answer questions such as: What factors should we have considered in making the decision? How could we have implemented the decision more effectively? What did we do that worked particularly well?
These postmortems will continuously enhance the process and also help create support for future decisions. People will trust that the process will lead to changes and enhancements if needed. The willingness to seek improvement by analyzing past actions and making adjustments separates great leaders from average ones.
Balancing between achieving consensus and being tempted to make every decision yourself takes time and practice. Always realize that time is of the essence. Your best option is to have a decision-making process that keeps your organization running at full speed, improves the abilities of you and your team and builds support for final decisions.
Entrepreneur Editors' Picks
Online Scams Are More Sophisticated Than Ever. Here's How to Shop Safely on Black Friday and Cyber Monday, According to a Cyber Intelligence Expert.
This Guy Saved Barbie From Cultural Extinction. He Did It by Asking One Big Question.
The Top 5 Hot Franchise Categories for 2023, According to One Industry Expert
Why Can't We Resist Black Friday and Cyber Monday? A Behavioral Economist Explains the Psychological Forces That Make Sales Irresistible.
I Couldn't Sleep. I Obsessed Over My Failures. Then I Found the Weirdest Cure.
This Pitch Scored a $250,000 Investment — But It Almost Didn't Happen
Employees Were Demanded to Go Home. Here's How We Invite Them to Come Back.