Strategic Decision-Making for Managers

"In any moment of decision,  the best thing you can do is the right thing, the next best thing is the wrong thing, and the worst thing you can do is nothing."  Theodore Roosevelt

The further up you get in the management hierarchy, the tougher your decisions will get.  In fact, if any easy or obvious decisions reach your desk, you may want to rethink the level of authority you've given your employees.  Anything that is easy or straightforward should be decided at lower levels of the organization.  While that makes your team (and the organization) more efficient and effective, it also means you'll be confronted with ambiguous, complex, no-good-answer types of decisions.  If you're not careful, you can get "analysis paralysis" and make things even more difficult by procrastinating on making the tough calls.  A process for dealing with these situations can help you move forward even in the face of uncertainty.

In Why Good Leaders Don't Take Yes for an Answer, Michael Roberto points out that the success of a particular decision comes down to two components: the decision quality and the implementation effectiveness.  What we often think of as "the decision" is about the first component.  Managers often get stuck because they are worried about the decision quality and want to have more information than is actually available.  They are afraid of making the wrong choice.  However, how the decision is carried out can be just as important, if not more so, than the substance of the decision itself.  You are very rarely going to have all the information you want.  (See above re: easy decisions and poor delegation practices)  What you do have control over is how the decision is carried out and how you mitigate the risks and uncertainty associated with your decision.  Sometimes, you may need to stop obsessing over trying to get more data and just figure out how best to proceed based on the possible outcomes.  

Improving Decision Quality

1.  Define the decision

First, you need to clearly define the decision to be made.  In some cases, this alone will help you move forward.  Teams can flounder for weeks or even months when something needs to be done or changed but no one has stopped to define what that actually is.  In one question, what is it that needs to be decided?
Should we postpone the launch of Product A or scale back the feature and keep the original date?
How can we improve our service response times?
What information do we need to determine whether we should start targeting customers in the X sector?
Where can we cut costs with the least negative impact to customers?

2.  Define the process.

Second, determine to what extent you will involve your employees (and others, if relevant) in the decision process.  Clarifying this up front can prevent frustration on your employees' part.  Whatever you do, do not ask for input you don't plan to use.  If you know for sure that you're going with a particular option, don't ask which option they think you should go with - ask them what potential obstacles or risks they see with the option you've chosen.  The Tannenbaum-Schmidt Continuum of Leadership Behavior (Harvard Business Review, 1958) provides several options for you to choose from.  Don't choose based on what kind of manager you want to be in general (although that might be a consideration).  Choose based on what is being decided and what makes sense for this specific situation.  

  • Tell: make the decision yourself and let the team know
  • Sell: make the decision yourself and provide the case for the decision to the team
  • Consult: share your ideas and get their input
  • Agree: decide together with the team
  • Advise: provide input and context to help employees make the decision
  • Inquire: ask employees to make the decision and then discuss it
  • Delegate: allow employees to decide for themselves within the limits you've defined (without discussing specific situations)

Source:  How to Choose a Leadership Pattern, Harvard Business Review May 1973, quoting the 1958 original article)

Ideally, you will use all seven levels at various times.  The idea isn't to move toward the end of the spectrum, as that can create inefficiencies and frustrations for your team.  The key is to determine which level makes sense for particular situations  or topics, and then clearly communicate how the decision will be made.  You may even get to a point where you can use the shorthand labels with your team:

"Sorry, guys.  This has to be a "Tell" decision because senior management has made this a top priority.  Let's just get it done."  
"I'd like this to be an "Advise" decision. There is important political context I need to give you, but ultimately you're the one who has to live with the revised process so I'd like you to make the decision."
"For all future customer issues that will cost less than $500 to resolve, you can use a "Delegate" approach and just inform me afterward."

Once you've defined the decision and how it will be decided, you can use various models such as those mentioned in a previous post to help you (and the team, if relevant) in making the decision.

Improving Implementation Effectiveness

Once you've chosen the path, it's important to think ahead to ensure that the decision is as successful as possible.  It often makes sense to involve your employees in this step, as they have first-hand experience with the work and can more easily identify potential risks and obstacles.  This can also be a way to involve them and get their buy-in when you are not able to involve them in the actual decision itself. 

You can do a quick exercise on a whiteboard during a team meeting for this.  

  1. Divide the whiteboard into four columns.
  2. Make a list of the possible risks and obstacles that could come up.  Have everyone think of worst-case scenarios and list the items on the left side of the whiteboard.
  3. Now determine how likely each thing is to happen.  Depending on the length of your list, you could just mark things as high, medium, or low, or you could rank them from most to least likely.  Whichever approach you use, put the rating next to each item.
  4. Next, determine the level of impact each item would have on the team and/or the project.  Again, you can either mark things as high, medium, or low, or you can rank them from most significant to least significant.  Put the rating in a third column.
  5. Circle the five to seven items that had the highest probability and/or highest impact.  If you have more than seven, focus on the highest impact items.
  6. In the fourth column, note for each circled item whether or not there is anything that can be done to mitigate that item.  Put a Y for any items for which there are actions the team can take and N for any things that are completely outside of the team's control and can't be mitigated in any way.

The circled items with a Y are the items you will need to put in your risk mitigation plan.  That sounds intimidating, but it can be as simple as two columns, one for the potential risk/obstacle, and one for the steps to take to mitigate each one.  You can get fancy with an issue tracking log if that makes sense for the situation, but it doesn't necessarily have to be complicated.  The key is to think ahead and identify any easy prevention strategies you and your team can use to help ensure that the decision (and the overall project or initiative) is as successful as possible.

Having a structured process for making and implementing decisions won't guarantee that you won't make bad decisions, but it will help alleviate some of the stress that comes with having to move forward in the face of uncertainty, and it will help your team be more successful in the long run.

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