Your business will be as good as your decisions
The one thing everyone on the planet has in common is the undeniable
fact we've all made our fair share of regrettable decisions. Making
sound decisions is a skill that needs to be developed like any other.
Leaders are not created equal when it comes to the competency of
their decision-making skills. Nothing will test your leadership more
than your ability to make decisions. Why do leaders fail? Because they
make poor choices that lead to bad decisions.
And in some cases they compound bad decision upon bad decision. The
outcome of a leader's choices and decisions can, and usually will, make
or break a business.
Fall
What most fail to realise is while it may take years of solid
decision-making to reach the boardroom, it often takes only one bad
decision to fall from the ivory tower. As much as you may wish it wasn't
so, when it comes to being a leader you're really only as good as your
last decision.
Every day, executives take tough decisions with incomplete
information and limited resources under tight deadlines, with millions
of rupees at stake, unmindful of the lives and careers of their
employees.
Yet too often these decisions are made not by analysing relevant and
reliable data, but through organisational politics, formal authority or
persuasive champions.
The loudest voice or the highest-ranking participant makes a call
based on gut feeling. Or the organisation slowly grinds to a too-late,
too-compromised solution that no one really supports but no one can
quite kill, either.
Gut instincts can only take you so far in life and anyone who
operates outside of a sound decision-making framework will eventually
fall prey to an act of oversight, misinformation, misunderstanding,
manipulation, impulsivity or some other negative influencing factor.
The complexity of the present business landscape, combined with ever
increasing expectations of performance, and the speed at which decisions
must be made, are a potential recipe for disaster for today's executive
unless a defined methodology for decision-making is put into place.
Mindset
Moving the emphasis away from personalities and organisational
hierarchy, fact-based decision-making focuses on the facts.
The decision to develop and launch a new product, for instance,
relies on knowing who will buy the product and how much they will be
willing to pay.
The decision to invest in or acquire a technology start-up relies on
knowing whether or not the technology in question works as advertised
and whether it is well positioned against competing solutions.
Pricing decisions need in-depth knowledge of demand elasticity, costs
and customer economics.
But it seems the information is never at your fingertips. Sometimes,
it isn't even clear which facts are important and which aren't.
There's a hope that someone, in some department, may have this
information. In situations like this, executives mentally chase each
other around the conference room table, unable to reach agreement
because they have incompatible but hidden mental models, different
incomplete sets of information, and competing theories about what to do.
Questions
Behind every tough decision is a set of critical unanswered
questions. The first order of business is deciding what those questions
are and what facts would provide the answers to move forward in a
positive, unambiguous manner.
The first and hardest step is to let go of opinions, assertions and
anecdotes and embrace the facts. Sometimes the facts are uncomfortable,
and it takes a little work to get the facts you need.
But in an environment where 'facts are friendly', people can de-personalise
the decision and believe in the process.
To create such an environment, what is the decision you are trying to
make? This may seem like the most obvious thing in the world, but it is
surprising how often different people on the same team or in the same
organisation are actually trying to solve different problems and don't
even realise it.
A fact-based decision-making approach is critical and successful in
today's business environment.
It is critical because large organisations often have trouble making
decisions and moving forward.
A fact-based approach is successful because such an approach makes it
easier to take a decision by getting people on the same page and it
improves the odds of making a good decision that will lead to a
successful outcome because the decision is based on hard data and an
understanding of what will drive value - not on organisational politics
or intuition. |