How can business Leaders make Better Decisions?

Leaders know that making good & fast decisions is challenging under the best of circumstances. But the trickiest are those we call “big bet”, unfamiliar, high-stakes decisions. When you have a crisis of uncertainty such as the COVID-19 pandemic, which arrived at overwhelming speed and enormous scale, organizations face a potentially paralyzing volume of these big-bet decisions. But when the environment is uncertain—and defined by urgency and imperfect information — waiting to decide is a decision in itself.

So, can be said that Decision Making is simply a process of making a choice.

According to McKinsey research, executives spend a significant portion of their time—nearly 40 percent, on average—making decisions. Worse, they believe most of that time is poorly used. People struggle with decisions so much that they get exhausted from having to decide too much, a phenomenon called Decision Fatigue. But decision fatigue isn’t the only cost of ineffective decision making. According to a McKinsey survey of more than 1,200 global business leaders, inefficient decision-making costs a typical Fortune 500 company, equivalent to about $250 million in annual wages.

There are three main decision categories that are most essential for Leaders:

1. Big-bet decisions are infrequent but high risk, such as acquisitions.
2. Cross-cutting decisions, such as pricing, can be frequent and high risk.
3. Delegated decisions are frequent but low risk and are handled by an individual or working team with some input from others.

In most companies, specific decision-making authority is rarely spelled out. The question of “who has the decision” can send teams and individuals running in different directions looking for approvals, and, as a result, important business decisions can end up being stalled. This can be especially problematic during times of crisis or disruption, when business leaders are aiming for both Speed and Quality when it comes to decision making, often without understanding that it’s not an either/or proposition. To accelerate their decision making, leaders should pause to distinguish among the types of decisions (big bet, cross-cutting, delegated) they may be required to make, as well as the level of risk involved, and adapt their approaches accordingly.

In addition, business leaders can take the following four actions to help sustain rapid decision making:

1. Focus on the game-changing decisions, ones that will help an organization create value and serve its purpose.
2. Convene necessary meetings only and eliminate lengthy reports. Turn unnecessary meetings into emails, and watch productivity bloom.
3. Clarify the roles of decision makers and other voices. Who has a vote, and who has a voice? Are you with the right person on the room? Push decision-making authority to the front line—and tolerate mistakes.

Decisions should be classified according to their Frequency, Risk, and Importance. Delegated decisions are the most mysterious for many organizations: they are the most frequent, and yet the least understood. The key to better delegated decisions is to empower employees by giving them the authority and confidence to act. That means not simply telling employees which decisions they can or can’t make; it means giving employees the tools they need to make high-quality decisions and the right level of guidance as they do so.

Moreover, when Leaders have to make tough decision, they should think most the three elements below: (3 C’s)

• Clarity
• Confidence
• Courage

Leading by considering the above elements will drive you to build trust and support by enhancing a transformative influence.

• Clarity: Seeing Through the Fog. If things are unclear in our minds cause us stress that slows down our decision-making process. And if we lack clarity we cannot communicate clearly to others, which cause stress to the entire organization. To provide clarity in the era of uncertainty, leaders first have to attain clarity themselves.
• Confidence: Followers need to believe that we believe otherwise why they should follow you? People want to follow leaders who are realistic about their challenges and humble enough to see for some advice.
• Courage: Facing the scurry staff. Leaders have to overcome their fears that holding them back and to quote the Nike slogan “Just do it”.

Thus, can be said, that Leaders today do not have the luxury of time as there are too many variables and rapid change to know that any decision is bullet proof as you can never be sure in a VUCA environment. When Leaders creates a sense of certainty in themselves and across their organization, they relief fears and build trust, then they will be able to build & follow a proper decision-making process.