Decision-making, the key to leadership excellence

Dr. K. Kuhathasan CEO: Cenlead

Decision-making is an important function of business leaders. A contract worth millions of rupees can be secured or lost depending on your decision.

A company can save a handsome amount of money and earn higher profits if the right decision is taken at the right time.

Most leaders probably spend most of their time discussing, thinking and taking decision. Effective decision-making is the key to leadership excellence. Sound decision takers “make a mark” in any organization. On the other hand, poor decision makers and slow decision-makers “mar the image” of an organization.

A decision is a judgement or choice between two or more alternatives and arises in an infinite number of situations from the resolution of a problem to the implementation of a course of action. Leaders by definition, must be decision-makers.

A decision is a choice between a variety of alternatives, and a decision-maker is one who makes such a choice. A decision can be made instantly but more often involves the decision-maker in a process of identification analysis, assessment, choice, and planning.

To arrive at a decision a leader must define the purpose of the action, list the options available, choose between the options and then turn that choice into action.

Decisions and the process of decision-making are fundamental to all leadership process-just as they are to everyday life.

Good decisions are at the heart of good leadership

We are all decision makers. Every aspect of our lives-as leaders, family members and citizens-is governed by decisions.

Our ability to make decision-to choose between one thing and another, rather than following blind instinct - is a defining feature, we feel, of our humanity.

The quality of our leadership depends on the quality of our decisions.

Key steps in decision making

* You can use the key steps outlined below to help you make a decision.

Recognize the need for a decision

* What is the issue that you need to make a decision about?

* Clearly define the issue.

* Ensure you are concentrating on the real decision and that you are not getting sidetracked by other issues.

Set criteria for a good decision

* What are you trying to achieve?

* List how you would gauge a successful outcome.

Gather and analyse the facts and opinions

* What facts and information do I need?

* From where shall I get it? (Get information from those who are likely to be affected by the decision and from those who are knowledgeable.)

* Am I the best person to make the decision?

* Do I have the authority to take the decision?

* Should I consult others?

Set out and consider alternative courses of action.

* What alternative possible solutions are there?

* What are the advantages and difficulties of each?

* List the courses of action and their possible outcomes to assist with comparison.

Consider side effects of outcomes.

* Who might be adversely affected by the decision?

* What will their reactions be?

Ways in which teams make decisions

* Sometimes one individual makes the decision in a team if the rest are silent or timid.

* Sometimes a small but articulate minority in the team makes the decision.

* Sometimes team vote-but voting breaks the team into winners and losers.

* Consensus decisions.

Consensus decisions

For many reasons, the consensus decision is usually the best decision. The consensus decision does not mean a unanimous decision. It does not mean, however, that those who do not agree with the majority can at least say: “I have been given a full opportunity to present my position. I feel others have understood it: They don’t agree with me and I honestly still feel that I am right. We agree to disagree but I will go along with the decision of the majority.”

Suggestions

Be careful about quick and easy agreements - examine the reasons for the apparent agreement to be sure that a true consensus has been reached. Also, don’t ignore conflict - find out why it exists so that it can be dealt with and resolved. Consequently, encourage groups to see value in disagreement and treat differences of opinions as a way of:

* Gathering additional information.

* Clarifying issues.

* Encouraging a team to seek better alternatives.

Team decision making

Leaders should not make decisions about every problem. Sometimes it is better to share the decision with the team. Team decisions are made at meetings.

Team decision making should be used when:

* The decision will affect the work of others.

* The decision has to be put into effect by others.

* Information is required from several people.

* Different viewpoints are required.

* The person who is responsible, it is cannot think of a satisfactory solution.

Advantages of team decision making

Team decision-making enables a wider range of views to be taken into consideration. It will allow mix of more experience. In today’s team-base organizations, teams make (or at least influence) decisions that not only affect the operations of the team itself but also the operations of “customer” departments, related teams in other areas, and the entire company.

Team decision-making may be the ultimate collaborative effort. Inept leaders may contend that too many cooks spoil the broth. Leaders and their team mates, however, realize that collective decisions have the potential to implement those decisions effectively.

Use the right type of decision

Your team may first have to decide what kind of decision is best for the situation:

Consensus: Consensus decisions are important when the situation requires unified support.

It is like building a pyramid. If just one person’s contribution is out of place or missing, the whole activity will suffer. Consensus decisions can take an awful lot of time, and time can be scare when a crisis is about to kick in your office door and attack you.

But on the plus side, they tend to ensure that every member of your team officially buys into the agreement. It’s often mentioned that Japanese management styles are big on consensus and unanimity.

So much so, all the people involved in a key decision may be asked to sign on a written summary of it to affirm their acceptance and symbolize their commitment.

This process reduces the odds that some people drag their feet.

Consensus is important when everyone has a role to play for the decision to work. Consensus might be preferred, for example, if a team is supposed to reduce new product design-to market time by 60 percent, recognize a department’s physical lay out for maximum efficiency, or set objectives for the next fiscal year.

Majority vote. This is often the most practical way to make a decision, especially when time is short, the decision isn’t critical, and you don’t need universal agreement.

For example, a team may decide by majority vote how to prioritise current projects or budget expenditure, which word processing or spreadsheet program to adopt, how long to retain hard-copy files before placing them in an achieve facility and what shift schedules team members will follow for the next work period.

Team appointee. This is the designated-driver version of decisions. The team nominates one person who’ll be responsible for calling the shots. Choosing the appointee will require a consensus or majority decision, of course, but once that’s out of the way, the appointee can move faster than the group.

An appointee may be chosen to pick the location for an offsite conference, arrange for a guest speaker at the monthly team meeting, do a preliminary evaluation of new hardware, software or equipment that the department might buy, negotiate with vendors to buy standard materials, parts, and support services up to a specified amount, or hire a freelance graphic artist to illustrate a new product brochure.

Common faults in decision-making

Unfortunately most of us make bad decisions occasionally; it is worth reviewing why this happens. The most common faults in decision-making are:

* Delayed decision - often due to workload. It is vital to determine which decisions are important and deal with them immediately.

* Hurried decisions - again, often made under pressure. Not enough time is taken to consider all the alternatives.

* Indecision - where people are afraid to commit themselves to firm decisions.

* Safe decisions - not reaching the best decision for the wrong reasons.

* Failure to communicate decisions - a failure to let everybody who needs to know have all the information that they need relating to the decision, when they need it.

* Taking a narrow perspective - the most effective and appropriate options may be missed if the problem solver fails to think broadly, logically and creatively enough.