The ability to make good decisions is one of the key factors that will lead to your company's success and your success as a manager. Wait… it’s not only about the quality of decisions, but also about how fast you make decisions based on insufficient data. “Most decisions should probably be made with somewhere around 70 percent of the information you wish you had. If you wait for 90 percent, in most cases you’re probably being slow.” Jeff Bezos
There are multiple decision-making traps one can fall into (not exhaustive):
Not taking decisions (postponing decisions you need to make for an unlimited time)
You being the only stakeholder making decisions in your company and acting as a bottleneck
Decisions being taken based on power/authority rather than knowledge, in areas like technology where everything changes super fast
Taking important decisions too late to matter for lack of certainty or insufficient data
Spending too much time on building consensus, rather than taking the responsibility for a decision that doesn’t make everybody happy
Having a culture where the ones with knowledge feel obliged to come up with supporting arguments for the already formed preferences the boss has, rather than one where there is free debate at the beginning of the process
Confirmation bias - where one only focuses the attention on finding supporting evidence
Some lessons I’ve learned about decisions from my management experience
Some difficult decisions can be reverted, when things don’t go as planned and you cannot afford the luxury to keep them. Nobody died from being wrong or from taking reversible risky decisions. 5 years later nobody remembers it anyway. An idea I’ve read and liked about reverting bad decisions is having a STOP rule (e.g. we will revert if x KPI drops by 30%).
Some decisions are only obviously good decisions in 5 years’ time. Don’t take the “5” literally, but there will be a time when the decision is only 51 to 49 and you’ll need to decide anyway. And you’ll remain under the 51 to 49 a long time before you know it was the right call.
If you follow what is hopefully an educated expert instinct and you decide against another expert or someone with higher authority advice and the decision is successful, it will contribute to your identity as a decision-maker and help you trust your business gut. But maybe you only had luck that time. It is still nice to humbly enjoy your success.
Poor senior people decisions are some of the most costly decisions to take. Hiring or promoting a senior manager that ends up not being a fit can easily cost you one year of progress in that area of business. When you decide to split ways, make sure you protect the dignity of the other person and give the right time to the process, you are readier than the person hearing your decision.
Get educated in how you measure and drive the success of your organizational redesign initiatives. Too many changes are exhausting for your people (more than for you as a manager), and a lot of assumptions that make sense on paper don’t materialize in real life or are too costly. Set clear KPIs for organizational changes. Assessing the impact of your change initiatives and learning from them is critical. Sometimes the organization can only absorb as many changes and postponing the next reorg might be the right call.
Decide with values as your Northern Star and do the right thing even if it’s hard and even if it will not seem the right thing for others. In the end, you need to live with that decision and you're the one in charge.
It’s easy to spend too much time in a peer group decision-making dynamic process. When consensus cannot be achieved, and rather sooner than later, you need to clearly articulate the why, and create and expect a culture of full support from the leadership team.
Food for thought questions
Do you have a clear decision-making process in place?
Some questions to help you with that:
What decision needs to be made?
When does it have to be made?
Who will decide?
Who will need to be consulted before making the decision?
Who will ratify or veto the decision?
Who will need to be informed of the decision?
Looking at the traps I’ve mentioned above, what are the ones you fall into more frequently?
How can you build a culture where your people realize that nobody died from making a wrong business decision, taking inappropriate action, or being overruled? What have you learned from your most important decisions?
How is your personality influencing your decision-making process?
What will you do differently when taking the next decision?
Good reads on decision-making
Decisive, Chip Heath and Dan Heath
Thinking fast and slow, Daniel Kahneman
Predictably Irrational, Dan Ariely
Nudge, Richard Thaler and Cass Sunstein