Featured image of post The Simple Art of Effective Decision-Making for Managers

The Simple Art of Effective Decision-Making for Managers

A large part of a manager’s role is to make decisions and be responsible for their outcomes. While there is ample advice on how to be successful in many other managerial core areas, such as growing your people, the domain of high-quality decision-making seems less crowded. In this post, I summarize what I have found during my 20+ years as a manager to be a simple and effective way to approach decision-making.

Identify options

The first step in making a decision is to identify that there is a decision to be made to begin with. Ask yourself: Does something have to be done in a particular way, or are there options? If there is only one option, is the decision about timing when to execute it? To be able to drive influence as a manager, one must be able to recognize the opportunities to make decisions.

A manager might also be explicitly asked to make a decision. People might be at crossroads and waiting for a manager to take the responsibility of choosing which way to proceed. In those cases, a manager should also start by finding out what the possible options are beyond what was presented initially.

The ability to grasp a process, break it down into smaller steps, and exhaustively find the options is a skill that can be honed. You can, however, accelerate acquiring this skill by constantly asking yourself, “Are there more options?”

Explore and rank the options to discover what is actually the optimal outcome

Once you have at least two options you can embark on the exploratory phase of collecting data on the various options. During this phase you can still discover more options, and then also explore them.

The reason you need at least two options to explore is that you need to be able to rank them on some metric. Hence, the exploratory phase should also lead you to uncover what are the metrics you actually care about. In addition to discovering options you thus also discover what is the optimal outcome of the decision. The need to make a decision often arises from some sort of problem that was faced, but quite often it is unclear what would actually be the best possible outcome. Effective decision-making hinges both on discovering the options, as well as on discovering what outcome is most valued. The alternative options as external factors dictated by the situation, while the discovery of the desired outcome comes from within and from one’s values.

Once you understand the options and the optimal outcome, it is fairly easy to rank them or use techniques such as a SWOT matrix to compare the options. With complete information, most decisions become clear and most managers would end up making the identical decision. The differentiating factor is thus not the actual decision making given the facts, but mostly at what point are different people content with the data points collected. As a general rule, if you have the time and resources, continue to push for slightly more data points even after you reach a level where you initially thought you had enough information.

When prioritizing data collection, try to think ahead what kind of information would definitely confirm something, or what discovery would disprove an assumption. If you start to strongly lean towards some decision already during the exploratory phase, put effort in specifically seeking for views and information that would disprove it.

Understand severity, urgency and finality

Obviously, when the stakes are high, a manager needs to spend a lot more energy on making the decision. To ensure the correct amount of effort is spent on each decision, be explicit about assessing the importance and urgency of a decision. Small decisions should be made frequently and without a delay. If a decision has significant impact, but is not urgent, use that to your advantage and postpone it to allow more information about options to be collected.

Additionally, consider the finality of a decision. If the decision is easy to revert, there should be less of a reason to delay it. The famous concept of “one-way and two-way doors” helps to understand this well. No decision is ever totally free from consequences if reverted, but understanding where the decision sits on a scale of “picking a hat, haircut or tattoo” significantly helps in making a better decision.

Break your bias

This is probably the biggest challenge, even for very experienced leaders. There is no source of absolute truth and everything we hold in our heads is a result of ingesting decades worth of information with varying degrees of trustworthiness. Even if there were some imaginary filter that ensures we only learn about things that are true, many snippets of information will eventually become outdated and false over time. Our brain is constantly in a flux of multiple levels of different thought processes, emotions and moods. We can make good decisions only by using our own brain, yet at the same time we need to be aware that we can’t fully trust our brain.

Setting aside the epistemological thoughts that there is no absolute knowledge, even when we could have access to the truth we might fail to recognize it if our brain is trapped by unconscious bias. To have a better chance at breaking free, everyone should familiarize themselves with the common cognitive biases in order to recognize when running at risk of any of them. Listening attentively to people with opposing views is also a good way to break bias.

You should be particularly careful in your decision if you feel you knew the decision before collecting enough data points to support it. Don’t let your quick but stupid lower limbic brain system in the driver seat, but instead make a continuous effort to allow your brain cortex to process things and only then make the decision.

Sleep on it

The previous paragraph neatly leads us to the last, but not least, important advice on how to make good decisions: sleep on it. Ask anyone who worked with me and they will remember at least one case where I said this and postponed making the final decision by one extra day.

You should continue working on a decision until you think you have everything you need to make the decision, no further research or consultations are needed, and you could just announce it. However, if the decision is not urgent to the day, rather write down your decision as a draft, keep it for yourself and sleep on it. The next morning look at the draft, ask yourself if you still agree to it, and only then commit. Having that extra night of sleep not only ensures our energy levels are recharged and we are more likely to think clearly, but also allows our brain and unconscious to process the information and thoughts from the previous day. Sometimes you might wake up in the morning having realized that you missed something or that you actually value a certain outcome more than another.

If the decision is urgent and it can’t wait until the next day, you can still drastically increase the quality or at least the confidence of a decision by taking a break, going for a walk or at least taking a couple of deep breaths before committing.

Some decision is better than no decision

The saying “sleep on it” specifically means just one night of sleep, or perhaps a weekend, but not postponing a decision for too long. If a decision is postponed for weeks or months, the circumstances are likely to change, and it is no longer the same decision. Something can of course be postponed, but in those cases the decision should be explicit that the decision is to postpone. Avoiding making explicit decisions is just bad management.

It is said that the Finnish army taught its leaders during WWII that if they don’t know what decision to make, then always just “hook from the right’’. It was considered both detrimental to troop morale and tactically inferior to stay put in the same location on the battlefield. Keeping the troops moving and executing a maneuver, even with incomplete information about the enemy positions on their right flank and taking a huge risk, was considered a superior option compared to not making any decision at all.

Luckily, very few of us are forced to make decisions about matters of life and death, but all managers need to remember that making decisions is a core duty of theirs, and that taking some action that leads somewhere is better than not making a decision at all. If the decision was wrong, one should own it and learn from it, so that the next decision will be better. Indecisiveness is worse, and will eventually lead to a figurative slow death.

If you have principles you follow or anecdotes about making decisions, please share them in the comments!

Hey if you enjoyed reading the post, please share it on social media and subscribe for notifications about new posts!

comments powered by Disqus