Making Decisions

Personal questions about what college to attend, what courses to take, and what company to work for may be difficult to answer. And their answers are important to us. There are difficulties in making decisions in our own life. Decision making in organizations can also be complicated. The stakes are often considerable and the effect widespread. In both cases, however, the essence of decision making is identical: the process of choosing among several alternatives.

The speed with which the Covid-19 crisis unfolded requires us to have to make decisions fast, under great uncertainty, and with great stakes hanging on the outcome. In general, people now report that their workload has increased significantly and decision making across geographies or Business Units’ boundaries has gotten worse.

The Information Revolution has changed us into a more global and integrated economy. People have access to information regardless of hierarchical levels. This facilitates decision making by those closest to the action. Still, the pace and complexity of events makes us feel unease with the quality of decision making in our organizations. A McKinsey survey of 2200 executives reported: only 28% said that the quality of strategic decisions in their companies was generally good, 60% thought that bad decisions were as frequent as good ones, and the remaining 12% thought good decisions were infrequent. (1)

Decision making processes help streamline milestone decisions. In general, when used effectively, many more people report that “decisions are made in a timely manner”. Not all decisions require a process. Daily work decisions are the work of the team and the team leader is most capable of making decisions there. These will be discussed and decided in short order.

What will make a difference as we work to improve our decision processes? We suggest three things. First, recognize that very few decisions are one of a kind. Try to learn from previous experiences inside and outside your current Organization. Leverage experienced Leaders in your network.

Second, recognize uncertainty – have alternatives beyond what you recommend; ask: “what can go wrong?”, “what´s the issue/problem we are trying to solve?”; attain some distance – “fire yourself” and ask: “what would your successor do?”. Create a setting where it´s OK to admit uncertainty.

Third, create a debate where people speak-up. If you are the decision maker, you typically already got an idea of where you want to lead. And if you are an experienced manager, you influence your people consciously or unconsciously. Fostering debate helps to avoid “groupthink”.

Once you “agree/disagree”, then we want all to “commit” to execute the decision with agility and excellence.

Good, bad and wrong decisions – as we do our homework of collecting enough knowledge, we hopefully get to good decisions. Bad decisions: deciding without doing homework of collecting enough knowledge. Wrong decisions: doing your homework but for unexpected reasons results did not turn out as desired.

(1) “Flaws in strategic decision making”; McKinsey Quarterly, Feb 2009