Leaders of every organization, large or small, need to make decisions. There’s no getting around that. Usually, these decisions are data-driven, customer-driven, or personal, and they can be major or minor, affecting just you or your entire team. As much as making decisions is nothing new, most business leaders are unfamiliar with the obstacles that hinder judgments, and how best to navigate them.
Sometimes the best place to start is by reaffirming what we already know, such as what decision-making is. Decision making is an intentional course of action to select the best option from a set of alternatives that will help your business achieve an objective or reach a solution. Often, decisions are based on gut feelings, especially for simple decisions that must be made quickly. For example, if you are ordering materials for production from a preferred vendor, this might be appropriate.
However, other decisions require you to examine the facts, not just trust your gut. These require research and occasional experimentation, such as determining the best market fit for a new product. So, how can you ensure you make the best decision?
Obstacles to Effective Decision Making
Start by recognizing what obstacles are stopping you from effectively deciding. Below are the five obstacles you need to look out for when making a decision:
1. Insufficient Information
Not having enough information makes informed decision making impossible. The missing details, as they are noticed, can create the impression that the decision lacks basis or evidence, even if it is the correct one. This can evoke questions on whether the judgment was effective, viable, or even necessary.
You will know you don’t have enough information if any member of the decision-making team continues to have valid questions. There is always the potential of unintended consequences of any decision, but not having enough information when making decisions means you cannot manage expectations or provide adequate reasoning as to why the decision was made.
2. Too Much Information
Like having too little information, having too much information, according to Concordia University’s Tricia Hussung warns, can confuse decision-makers. When trying to shuffle through all the available information, decision-makers can become paralyzed by analysis. When there is more information than necessary to make the decision, it can be unclear what information is relevant or still accurate, if gathered over time.
Too much information leaves people considering outliers, preventing them from being able to make a decision. This might occur when an objection rises as a result of statistics that have a questionable source. A suggestion when having too much information is to filter all of the information through the lens of the purpose of the decision. If it is valuable as evidence for your decision, it’s worth using; if it does not tie directly to the purpose of the decision you are making, it should be set aside.
3. The Committee
Your committee is anyone, and everyone invited to weigh in, officially or unofficially, on the decision. Although it is always beneficial to consider other perspectives, too many voices, each concerned with their vested interests, can drown what is best for the entire organization. Members of the committee will question how the change will affect who and what they are responsible for.
To ensure that you have the right committee, ask yourself: Are the people who will be impacted, or at least who is responsible for them, represented on my committee?
Who else is missing from the conversation that should be involved? Is there anyone on the committee that should not be included in this decision?
4. Emotional Attachments
If you feel emotionally attached to the decision, your emotions can hinder your decision-making process, and misguide you to do what is best for your attachment, rather than what’s best for your organization. Often, emotional attachment suggests that you are too close to the problem to make an unbiased decision. Some decisions will be more difficult for you to implement or get on board for. These decisions might oppose your personal goals, desires, or needs. But your disagreement does not inherently mean that they are the wrong decision.
Emotional attachment takes two primary forms. The first, and less prevalent is the desire to let something go that you never really believed in. This grows from a feeling of resentment because you feel you have been coerced into a decision. The second is based on sunk costs. This is the belief that you must continue working on something (regardless of the chances of success) because you have already invested so much time and money.
Ambivalence refers to having mixed, often contradictory emotions regarding a subject. When a decision-maker suggests that it doesn’t matter what decision is made because the outcome will be the same, they are ambivalent. Often, ambivalence indicates a lack of investment and can, in its worst cases, lead to the wrong or no decision being made at all.
Ambivalence is a form of apathy. It is demonstrating a lack of interest or concern about decisions being made and their potential outcomes. If you abstain from deciding because the result is irrelevant to you (or you don’t care about the outcome), you are taking an ambivalent attitude towards that decision.
Perfecting the Decision-Making Process
Perhaps most important, determine who is responsible for making the decision. While everyone on your team should have the autonomy to make decisions, not everyone needs to be involved in every decision.
For example, a C-level leader should not be involved in making decisions about vacation time for front-line employees. This responsibility should be reserved for the front-line employee’s direct supervisor.
As an organization, you need to clarify who is responsible for what decision. Remember, it will not always be the person responsible for implementing the decision, but sometimes a team member who reports to them. So, as part of your organization’s decision-making process, consider:
- Will the individual be responsible for the decision, or will the organization hold ultimate responsibility?
- Who must carry out the decided course of action?
- Whom will the decision affect if the decision goes wrong?
- Who is capable of handling this decision? Of these team members, who do you trust to make the best decision?
- Are you, as the decision-maker or delegator, willing to take responsibility for a mistake?
Once you have decided who is responsible for the decision, it is equally important to give them a deadline. This deadline ensures that the decision gets made in a timely fashion for all parties involved. Sometimes, a quick, malleable decision is more valuable than a finalized decision. Other times, the reverse is true. Before you set the deadline, examine:
- Is the driving force internal or external?
- How much time is available to spend on the decision? Is it enough?
- Is there a deadline for making the decision, and what are the consequences for missing the deadline?
- Is there an advantage to making the decision quickly?
- How important is it to decide? And how important is it that the choice is right?
- Will investing more time improve the quality of the decision?
How to Make an Effective Decision
Entire organizations have dedicated resources to developing effective decision-making processes. For my clients, I always suggest a hybrid of the UMass and Mindtools solutions, as follows:
Step One: Determine If a Decision Needs to Be Made
Is there a goal or initiative that you, as a leader, want to consider? Is there a problem that needs to be solved? Some looming concerns need a conversation, not a decision, to remove any uneasiness.
Mindtools’ experts suggest that you nurture a constructive and creative environment in which your team can determine if a decision needs to be made.
This environment should be absent from emotional attachment and ambivalence, but not of tension. Making a decision can become complicated when there are too many people in the process. But while you are still in the conversation stage, you want to pull together a room of people who care about the problem and discuss it thoroughly. This cannot happen if everyone is in agreement.
Step Two: Investigate the Problem in Detail
When it becomes clear that a decision must be made, move to this step with only the people involved in making the decision. To come to the best solution, you must investigate the problem in detail. In almost every situation, it is valuable to conduct a root-cause analysis, on top of gathering all appropriate information. If the information is not up-to-date, accurate, and pertinent to the decision-making process, it should be discluded.
Step Three: List Out All Possible Solutions
After collecting all the necessary information, good or bad, make a list of all the possible solutions. If someone on your team comes up with an alternative solution that may be beneficial, now is the time to write it down. As you ideate, chances are you will start to see the advantages and disadvantages of each option. Write these down, too. While you do this, don’t forget to follow any formal processes your organization has in place.
Step Four: Weigh Out the Risks Involved
When all your options have been aired out, weigh the risks involved. Ask: How serious are the consequences of making the wrong decision and the benefits of the right one?
This doesn’t mean focus on the worst possible outcome, but that you should consider how probable each one is to occur. Hussung suggests further evaluating each outcome by asking: Is the anticipated outcome desirable? Does my organization have the resources and bandwidth to implement each decision? Will the other people in our organization accept this decision? If the answer is no to any of these questions, then the option should not be further discussed.
Step Five: Decide
Now, the time has come to decide on the options that are left. If there is an obvious solution, take it. If you have a clear winner, yet still feel uncomfortable with it, the decision may disagree with your personal or organizational core values. In which case, you may want to revisit the decision-making process, starting at steps three and four to see if you overlooked possible solutions.
If you still need help, Mindtools has resources available to help guide your final decision. These include the Decision Matrix Analysis, Paired Comparison Analysis, and Decision Trees.
Step Six: Evaluate Your Decision
With the decision made, take one last opportunity to evaluate it. Remove any form of emotional attachment, and take a good look at the conclusion, along with its pros, cons, and probable outcome. Consider whether there any flaws or blind spots that need to be addressed. This includes looking for any opportunities to employ more effective or efficient processes to institute your decision.
Step Seven: Communicate It With Your Team
Although this is probably the most overlooked step in the decision-making process, it is also the most important. Once you finalize your decision, you need to communicate it to your entire team. This does not mean you need to have an all-hands meeting to explain the new organizational direction as a result of this decision.
Instead, communicate the decision with empathy. Change can be terrifying, especially for those who were left out of the decision-making process. So start by explaining why this change was necessary, and the reasoning behind the final decision. Be sure to include both how this will benefit your team and the potential hardships it might have. When it’s time to start implementing the decision, empower those affected by inviting them to be involved in the implementation decisions.
As a leader, it is your responsibility to recognize which decisions need to be made and which are best delegated to others. Decisions are the force that drives your organization and should be made with intention, empathy, and attention to those it will affect. Perhaps, the most difficult decisions any leader can make is whether it is now time to make a change. If so, are you and your team ready to make the decisions that need to be made?
If you want to boost your confidence and help your team improve their decision-making skills, reach out to Raine Digital.