(Originally published in Forbes on November 15, 2021)
What makes someone a great senior leader? One of the defining characteristics has always been the ability and willingness to make decisions – effectively, quickly and in a variety of conditions.
But the real question is, what makes someone a great senior leader – today? The way that leaders need to make good decisions in today’s environment has radically changed in the last few years. What’s caused the need for a “new and improved” form of decision-making?
There are several forces that have come together in a similar time frame to create the need for change:
- New dynamics in decisions. Decisions are now more complex, dynamic, and intense, often requiring innovative solutions that depend on others’ expertise and diverse perspectives. Look no further than the pandemic to see how leaders have had their decision-making skills tested like never before.
- Different employee expectations. Given dramatic recent shifts in the employer-employee contract, employees expect to have a significant voice in decision making if they are to remain engaged in execution.
- A better understanding of our own biases. Behavioral economists like Nobel laureate Daniel Kahneman have shown through research over the past 10 years that our ability to make objective decisions is often impaired by cognitive biases that affect our behavior and decision-making. We now know that leaders sometimes take shortcuts on the analyses that should be done or the integration of other perspectives to make effective decisions.
In short, what has changed in recent years is the how of decision-making. Leaders need to be more aware of their own decision-making styles and biases, and more inclusive in order to better engage and motivate others. So, how should senior leaders adjust their decision-making to thrive in today’s business environment?
Here are four key actions to upgrade your leadership decision-making process:
- Identify your default decision-making style. Are you someone who typically likes to make decisions quickly and independently, or do you prefer to take the time to involve others? Do you maximize the information gathered, or do you tend to be a “satisficer,” content with “good enough” information? How comfortable are you in taking risks versus taking a tried-and-true approach? Once you are aware of your natural style, consider what style of decision-making is best suited to your organization and environment. For example, one of our client organizations highly values engaging a wide array of stakeholders in decision-making. Leaders in this organization need to balance their industry’s need for quick decisions with the organizational necessity to build consensus. Consider how your natural style syncs with what will maximize your performance where you are, and adjust your baseline decision-making style as necessary.
- Choose the most effective approach. Regardless of your natural style of decision-making, different situations call for different approaches. In what’s considered a “Harvard Business Review classic” article, researchers Tannenbaum and Schmidt identified different types of leadership approaches, some of which include:
Tell-and-Sell: These are leader-led decisions in which the leader takes full accountability for the decision. Once they make it, they “sell” it to the team and others.
Consult: The leader first gathers input from others with certain expertise or perspectives, then makes the decision themselves.
Delegate: The leader delegates the decision to a subset of the team, or an individual. it needs to be made quickly and doesn’t require broad input.
Consensus: The decision is a critical one and needs broad input from the team to ensure that the outcome is jointly owned and supported.
Given the rapid changes and uncertainty faced by today’s leaders, decision-making agility is key. This is best achieved by using different decision-making styles situationally. Whichever approach the leader chooses (and all have their place), it’s important to be clear about what kind of decision fits that particular situation and to be transparent about why.
- Use data effectively. Google Chief Decision Scientist Cassie Kosyrov warns that most executives misuse or underutilize data when making key decisions. Confirmation bias is our tendency to seek data that confirms what we already believe and to reject or minimize data that contradict our inclinations. We need to systematize our use of data to counteract our natural confirmation bias. Kosyrov advises that leaders ask themselves two questions before making a decision: 1. What is my default decision? That is, what decision would you make if you had to make it now, without any new information? 2. What information would you need to change your mind? While some might argue that stating your default decision anchors the leader in that position, Kosyrov would argue that it’s simply making the unconscious conscious so that we can gather and use data effectively to make more effective decisions.
- Communicate the decision, again and again. Communicating the decision requires the same degree of intention as making it, especially in today’s world. Who needs to know? Who will be impacted? What will be their concerns or questions, if any? What do you need them to do next? How can you best motivate them to act on this decision? A simple framework for what to communicate contains three elements: What (is the decision)? So what (what is the implication of that decision)? Now what (what do you need them to do)? High-performing senior leaders understand that context is key, and when communicating their decisions, they focus on the intended impact of the decision and how it involves or impacts others. And knowing that decisions today are increasingly evolving and shifting, leaders need to communicate the what and why in an ongoing way, keeping their teams up to speed as they progress down what is often a winding road.
Modern leadership decision-making requires the right blend of setting direction and involving others. Being clear about how to make the best decisions given the situation, understanding (and potentially resetting) your own natural style and biases, and leveraging ways to engage others is what sets great leaders apart in their decision-making abilities. Senior leaders who adapt their decision-making to today’s realities will distinguish themselves from their peers, modeling outstanding leadership in dramatically changed business conditions.