How do high-functioning organizations weather periods of heightened uncertainty? They decisively direct their teams and make bold decisions to adapt and position themselves for the future. Far from being reckless, high-functioning organizations are bold and decisive because they have effective decision-making systems. In our experience, three factors most influence an organization’s ability to make good decisions: 1) what decisions leaders spend their decision-making time on, 2) who is involved in making key decisions, and 3) how leaders efficiently and effectively make decisions and evaluate results on an ongoing basis.
Timely, high-quality decision-making is essential for responding in a dynamic environment. It can be tempting to include more people in decision-making when you lack complete information, factual models, or historical patterns of predictable behavior. Indeed, in these situations, we have seen clients prioritize gaining consensus and acquiring as much input as possible, only to involve too many people in key decisions where no one had clear authority. This significantly slowed their decision-making and led them to be overly cautious. On occasion, we have also seen too few people involved, leading to decisions that do not reflect the needs of important stakeholders.
Leaders should objectively evaluate whether their organization is equipped to make good decisions by focusing on three key factors: the what, who, and how of decision-making. In this article, we will explain how to assess those factors and improve decision-making processes in 3 steps:
In times of uncertainty, leaders must identify the critical few decisions that are most urgent and impactful to their business.
The first step to bold and decisive decision-making is to align on which decisions are most critical. Time and attention are scarce resources; not all decisions have the same impact or need to be made now. It is important to preserve leadership bandwidth for the decisions that are most urgent or have significant impact on the organization, and then sequence them accordingly.
Get the right people involved in decision-making by first clarifying what you need to know to make the decision. Then involve those who can interpret and sort incomplete and conflicting information and who will be key to driving execution.
After identifying the critical decisions, the next step is determining who should be involved in making them. Organizations often struggle to determine who to consult before making key decisions, especially during periods of ambiguity or stress. Consulting too many people prolongs the process, makes it harder to be decisive, and can water down the final decision. Consulting too few people risks missing key facts or overlooking creative solutions. In our experience, companies that consistently exhibit bold and decisive decision-making focus on involving the right people in each decision, irrespective of the total number.
The key task, then, is determining who those right people are. They usually add value in one of two ways:
It’s important to have people in the conversation who can help the team both process what they do know and understand the execution implications of different options. Even though you won’t have as much information as you’d like, you can compensate by bringing the right minds together to determine the best course of action. Experience, good judgment, creativity, and problem-solving are invaluable in a nebulous environment. Even if the people with those skills or experiences aren’t usually involved in making a decision, consider involving them now.
Equally as important is having the “on-the-ground” perspective on how decisions will be executed. We’ve all seen too many executive decisions that seemed logical but eventually failed because leaders didn’t factor in key details of how they’d be implemented. Especially with urgent decisions, it’s critical to keep the deciders and doers aligned to avoid making decisions that are too difficult or impossible to execute.
Determine the appropriate governance—the parameters for where, when, how, and how often you’ll make each decision—based on stakeholder involvement needs and decision complexity and stick to consistent processes on an ongoing basis.
Involving the right people goes a long way towards making bold and decisive decisions, but ensuring proper governance is critical as well. Good governance involves putting regular meetings and/or communications in place to process information, identify knowledge gaps, enable decision-making, and communicate decisions throughout the organization.
Decision-making forums are key tools of governance by which leaders control where and how decisions are made. Clarifying the focus, frequency, and method of decision-making forums—and how to change them over time—creates predictability and stability that can anchor leadership teams in times of uncertainty. Regular forums also provide an opportunity to evaluate the impact of key decisions and reassess them in light of new information.
A common misconception is that governance and disciplined decision-making processes create bureaucracy. In truth, they don’t if they are appropriate in focus and number. Here are some tips to help you keep governance in check:
In the end, being bold and decisive in a crisis comes down to having clear decision-making roles and processes. We believe these are the most important points to be clear on:
Leadership teams that get clear on these three things will operate more effectively in a quickly changing world. While they won’t be immune to the challenges of today, they will be better equipped to adapt to whatever the future holds. Taking bold and decisive action to help their teams navigate uncertainty will help companies emerge stronger in the “new normal” that awaits.
To discuss how your organization is navigating its decision-making during challenging times, contact us today.
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