Mastering Decisive Leadership: The Crucial Role of Strategic Decision Making
You can't have it both ways. You can't be viewed as a capable leader and a lackluster decision maker simultaneously. If you're seen as an effective leader, one factor contributing to this perception will be your demonstrated ability to critically analyze situations and act as a strong decision maker.
Conversely, if you're perceived as an ineffective leader, a significant factor driving this belief will be the lack of faith in your consistent application of critical thinking and sound decision-making skills. No amount of education, training, or goodwill can overcome a pattern of poor judgment, unethical conduct, and hasty or misinformed decisions.
Making Effective Decisions is Crucial for Leadership
Leaders, regardless of their level in an organization, are expected to demonstrate an ability to evaluate their surroundings, prioritize strategic goals, and make wise (well-informed) choices regarding strategy, operations, budgets, personnel, and more. In my years of strategy and management consulting, I've discovered that decision-making is one of the most sought-after abilities.
However, I've also noticed that this skill – effective decision-making – is rarely assessed or evaluated before hiring and promotions are made.
As a result, the majority of individuals in high-ranking positions within organizations are, by default, assumed to be effective decision-makers. Without undergoing thorough testing or evaluative processes, these individuals are simply assumed to be effective decision-makers based on the titles they hold and the associated authority granted to them.
Effective leaders – and undeniably strategic thinkers – comprehend the significance of consistently making sound and well-informed decisions while leading their teams, achieving organizational objectives, and executing strategic priorities. These leaders understand how to identify problems and scrutinize issues. To execute this effectively, they adopt a holistic approach, considering the accountabilities and implications of their decisions, and teach managers (throughout the organization) to adopt the same approach.
Implement this Strategy to Become an Effective Decision Maker
Before making decisions about – or providing solutions for – issues, rely on an efficient problem-solving process. I suggest you first establish the issue or problem that requires decision-making and then consider viable alternatives and solutions.
It's crucial that you make sound decisions during each stage of the process, even at the outset.
- Define the issue. Investigate the root cause using the 5-Why technique.
- Research the relevant data, information, and facts.
- Generate and analyze alternatives and potential solutions.
- Evaluate alternatives and select the best solution.
- Develop and implement the solution.
- Monitor and follow up to ensure success.
10 Groups of Questions You'll Use as an Effective Decision Maker
Organizational managers and executives typically make three types of decisions frequently:
- Strategic decisions – these decisions shape the organization's long-term direction.
- Tactical decisions – these decisions address intermediate issues to facilitate strategy priorities.
- Operational decisions – these decisions handle day-to-day matters to progress operations.
As an effective decision-maker, consider the following ten sets of core questions as part of your decision-making process, regardless of decision type (strategic, tactical, operational).
- Why should we prioritize this issue? Or, what prompted the necessity for this decision to be made?
- What are the consequences of not addressing this issue? Is maintaining the status quo suitable? Why or why not?
- What outcomes do we wish to achieve? Who values these objectives and why?
- What are our biases, prejudices, interests, or values? Are they consistent with the defined decision options?
- Who will be primarily impacted by this decision? How?
- What are the advantages and disadvantages of this decision? What supports this analysis?
- Who will benefit from this decision in the short and long terms? Who determines these beneficiaries?
- What is the worst-case scenario this decision could produce? Can we handle it? Why?
- What forces contribute to or oppose this decision? Are we concerned? Why or why not?
- What's the secondary choice / option or backup position? Is it feasible, and how do we confirm this?
These steps are crucial. These processes matter. These questions matter. To make sound and well-informed decisions, employ decision-making techniques that lead to more effective decisions.
Apply these methods because you are an effective leader. Apply these methods because you value the quality of your decisions and their impact. Apply these methods because failure to anticipate the consequences of your decisions can result in catastrophic consequences. Apply these methods because it's the right thing to do. Apply these methods because you want to be an effective decision-maker.
Sometimes the Brightest Minds Make Regrettable Decisions
It's surprising that a skill like decision-making, which is essential for organizational success, strategy development and execution, operational leadership, budget alignment, and allocation, lacks adequate measurement and evaluation procedures.
Frequently, nothing formal is in place before a calamity occurs or a collapse takes place (e.g., the Enron accounting fraud scandal, the Bernard Madoff investment scam, the 2008 financial and housing crisis, the 2010 BP Deepwater Horizon disaster, the 2019 Boeing 737 MAX FAA disaster, and the 1912 Titanic tragedy, just to name a few).
“Are you comfortable putting your life and fortune in the hands of the gullible, uninformed, and unreflective?” – George Carlin, comedic monologue.
Every time, you've got some of the sharpest minds in the room. The examples provided show that knowledge didn't surpass poor and faulty judgments. Inefficient judgments are just as likely to be made by supposedly competent (even outstanding) bosses and leaders as they are by supposedly incompetent (and struggling) ones.
Having a wealth of experience doesn't safeguard you from making foolish decisions. College degrees, prestigious institutions, and qualifications haven't offered any comfort. And being regarded as a global authority, a powerhouse, or exceptionally gifted hasn't served as the decisive factor either.
Ineffective Decision Making Tarnishes Reputation
Most, if not all, individuals who view you as an astute leader will change their minds if you consistently make poor decisions. They will also lose faith in you if, after years of making sound decisions, you suddenly make one or more disastrous ones.
At both extremes, uninformed (and reckless) choices can seriously damage the organization—and you—both personally and professionally. It can make you appear to be an ineffective leader at best and a reckless novice at worst.
Demonstrate yourself to be an adept decision maker, and it will enhance your leadership standing. Making good, judicious, and well-informed decisions is one of the many things that competent leaders excel at. Eliminate this ability (make unethical, hasty decisions) and your success as a leader will be short-lived—if you ever achieve any at all.
Effective decision-making is crucial in maintaining a leader's reputation. As mentioned earlier, demonstrated ability in making critical analyses and sound decisions significantly contributes to being viewed as a strong leader. Conversely, a pattern of poor judgment, unethical conduct, and hasty or misinformed decisions can tarnish this reputation, regardless of one's level in an organization or educational background.
To become an effective decision maker, leaders should implement a systematic problem-solving process, considering factors such as defining the issue, researching data, generating alternatives, evaluating solutions, implementing decisions, and monitoring outcomes. By consistently following this approach, leaders can ensure that their decisions are well-informed and contribute positively to strategic priorities and organizational objectives.
