Senior executives who rise to the C-suite do so largely based upon their ability to consistently make sound decisions. However while it may take years of solid decision making to reach the boardroom it often times only takes one bad decision to fall from the ivory tower. The reality is that in today’s competitive business world an executive is only as good as his/her last decision. In today’s post I’ll provide some tips for making consistently good decisions…
Nothing will test your metal as an executive or entrepreneur more than your ability to make decisions. I happen to be the type of person that would rather make the decision than have to live with someone else’s decisions. In fact I absolutely love to make decisions and whether it is in my role in the business world, or my role as a husband and father, I want to be the one making the tough calls. That being said, nobody is immune to bad decisioning We have all made bad decisions whether we like to admit it or not. Show me someone who hasn’t made a bad decision and I’ll show you someone who is either not being honest or someone who avoids decisioning at all costs.
For more than 20 years I have either served in the capacity of a principal owner or senior executive and have generally been highly regarded for my decision making ability. Like everyone else I have also made some regrettable decisions along the way. When I reflect back upon the poor decisions I’ve made it’s not that I wasn’t capable of making the correct decision, but for whatever reason I failed to use sound decisioning methodology. Gut instincts can only take you so far in life and anyone who operates outside of a sound decisioning framework will eventually fall prey to an act of oversight, misinformation, misunderstanding, manipulation, impulsivity or some other negative influencing factor.
The complexity of the current 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 decisioning is put into place. If you incorporate the following metrics into your decisioning framework you will minimize the chances of making a bad decision:
- Perform a Situation Analysis: What is motivating the need for a decision? Who will the decision impact (both directly and indirectly)? What data, analytics, research or supporting information do you have to validate your decision?
- Subject your Decision to Public Scrutiny: There are no private decisions Sooner or later the details surrounding any decision will likely come out. If your decision were printed on the front page of the newspaper how would you feel? What would your family think of your decision? How would your shareholders and employees feel about your decision? Have you sought counsel and/or feedback before making your decision?
- Conduct a Cost/Benefit Analysis: Do the potential benefits derived from the decision justify the expected costs? What if the costs exceed projections and the benefits fall short of projections?
- Assess the Risk/Reward Ratio: What are all the possible rewards and when contrasted with all the potential risks are the odds in your favor or are they stacked against you?
- Assess Whether it is the Right Thing To Do: Standing behind decisions that everyone supports doesn’t particularly require a lot of chutzpa. On the other hand, standing behind what one believes is the right decision in the face of tremendous controversy is the stuff great leaders are made of. My wife has always told me that “you can’t go wrong by going right” and as usual I find her advice to be spot on…Never compromise you value system, your character or your integrity.
- Make The Decision: Perhaps most importantly you must have a bias toward action and be willing to make the decision. Moreover as a senior executive you must learn to make the best decision possible even if you possess an incomplete data set. Don’t fall prey to analysis paralysis but rather make the best decision possible with the information at hand using some of the methods mentioned above. Opportunities and not static and the law of diminishing returns applies to most opportunities in that the longer you wait to seize the opportunity the smaller the return typically is. In fact, more likely is the case that the opportunity will completely evaporate if you wait too long to seize it.
Decisions can, and usually will, make or break an executive. Those that avoid making decisions solely for fear of making a bad decision will rarely rise above mid-management, and those that make decisions just for the sake of making a decision will likely not last long. If you develop the appropriate blend of a bias to action with an analytical approach to decisioning your stock as an executive will surely rise.