Are you tired of your team struggling to make crucial decisions? Looking for better results? Effective decision making can mean the difference between surviving and thriving as an organization. Here are 5 essential elements of a success decision-making process.
- Don’t approach all decisions the same. In a recent global survey, McKinsey looked at how ‘winning’ companies approach decision-making. They differentiate decisions based on three criteria:
This combination of factors helps define the decision, who’s involved, the level where the decision should be made, and which tools will help ensure the best decision is being made. Decisions can be:
- Big bet: infrequent and high risk/high importance
- Cross-cutting: frequent and high risk/high importance
- Delegated: frequent and lower risk/lower importance
- Define clear objectives: Before making any decision, ensure that everyone on the team knows the objectives and goals that the decision is meant to achieve. Too often we assume everyone is on the same page only to find out the opposite. Have explicit conversations about the goals and objectives it will achieve.
- Balance psychological safety with intellectual honesty. Jeff Dyer et. al. discuss how intellectual honesty and psychological safety are key to incremental and breakthrough innovation and learning – both outcomes of decision making. Create a decision-making environment where people feel comfortable sharing their concerns, questions, and ideas while also allowing for difference and ideas to be debated and explored.
- Be aware of decision bias. We all have biases. It’s part of how our brain functions. However, we need to be aware of those biases and push against them. Common decision biases include the sunk cost bias, confirmation bias, and the herd mentality.
- Evaluate and learn. After making a decision, take the time to evaluate the outcome and learn from it. This will help your team make better decisions in the future.
It’s important to note that decision-making, especially at the strategic level, should follow a process that fits your organization and culture. With few exceptions, the process should be followed consistently, so that everyone knows how it works, shortcuts aren’t taken, and that consistency creates efficiency over time.
If you’re not happy with results of your decision-making, no matter how long you’ve been doing it that way, or how recently you changed the process, don’t be afraid to review and revise the process. Most organizations can benefit from a third party to help them understand their strengths and weaknesses and how to re-engineer their decision-making. At the very least, start with these 5 keys.