Practice #4: Manage Decisions Well

Practice #4: Manage Decisions Well


Decisions are the day-to-day inputs and outputs of an organization. To build trust, leaders must build systems that result in good decisions being made throughout the organization. They need to teach people how to manage decisions effectively— to design a decision process. They need to reframe how difficult decisions are communicated and made. Delegations must be clear. Otherwise, bureaucracy creeps in and paralyzes the organization. Most important, people must shift their orientation to making and managing their decisions.

Decisions: The Heart and Soul of the Organization

Decisions are the atoms of every organization. Every new product launched, every new service offered, every process made more efficient and reliable is a result of hundreds of decisions. Effective leaders view their worlds through this lens, rather than through the lens of hierarchies, org charts, or chains of command. To build high levels of trust, teamwork, and innovation, effective managers focus on clarifying decision-making responsibilities. (Note that I didn’t say “roles and responsibilities,” which is a common mistake.) Once you know the decision-making responsibilities, you’ve defined the role.

Effective leaders and managers are constantly on the lookout for opportunities to clarify decision-making authority.

This means difficult conversations often need to occur. First of all, it means clarifying for people their precise decision-making role, which sometimes translates into less responsibility than they think they have. The manager of a large publishing company asked me to lunch one day and said:

“I need help learning how to be a better leader. What do you see as the most important thing I need to do?”

Without missing a beat, I replied:

“Be clear about delegation. Which decisions do you want to make? Which are you delegating to others? You can’t be afraid to have those discussions.”

Our research shows few leaders pay much attention to managing decisions.

They don’t know the appropriate vocabulary—for example, they confuse collaboration with consensus. They fail to design decision processes with the right sequence of goal setting, data collection, input gathering, stakeholder engagement, and brainstorming. As a result, they fail to leverage themselves as leaders. They go too far or not far enough in empowering others. They fail to achieve the optimum balance of engagement and efficiency in making the decision.

To build trust, you need to focus on becoming a superb decision manager.

This means teaching people the vocabulary of decision making; it means designing effective decision processes; it means avoiding the trap of faux consensus. Above all, it means being clear about delegations.

The Five Types of Decisions

Let’s begin with one of the most important tools of successful decision management—understanding the five types of decision processes: autocratic, consultative, consensus, delegated, and democratic. Each implies dramatically different roles for the people involved.

Autocratic Decisions

The easiest type of decision is autocratic: it’s a decision you make yourself. You pick out your shirt in the morning. You respond to your email. No one else gets involved. There are two subtypes:

  • You make the decision by yourself using the information you have available.
  • You obtain information from another person (or other people), and then decide by yourself.

Leaders who want to build an organization operating with high levels of trust and spark should not make important decisions autocratically. Instead, they need to use one of the other four processes.

Consultative Decisions

A consultative decision means you recognize that you don’t have all the information you need and you want to actively engage other people in the process. You literally consult with another person or persons. At the same time, you make it clear that the final call is yours—it is most definitely not a consensus decision (more on that in a moment). Again, there are two subtypes:

  • You involve other people individually by sharing the issues and obtaining their data, ideas, and recommendations. Then you decide.
  • You involve other people as a team by sharing the issues and obtaining data, generating ideas, and developing recommendations. In other words, it is a highly collaborative process. But it is not consensus—it’s clear from the outset that you have the final say.

Consensus Decisions

A consensus decision is a group decision. In general, it means that the vast majority of the group supports a particular course of action, and no one in the group is opposed to it. Consensus involves a lengthy process of sharing data, brainstorming options, and thoroughly airing all relevant information and viewpoints. It requires that the group be deliberate in managing the decision process collectively—if someone feels the process is unfair, the group needs to stop and take stock and repair the process so that no one feels left out. The two subtypes:

  • You and another individual share the issues, and then you both generate and evaluate alternatives and reach a decision that you mutually agree on.
  • A larger group shares the issues, collects data, generates options, evaluates alternatives, and reaches a decision.

Delegated Decisions

The delegated decision also has two subtypes:

  • You determine that another individual has the judgment necessary to make the decision, so you delegate it and in so doing acknowledge that you will accept and support the decision he or she makes. This makes it a delegated consultative decision. (As someone who’s affected, you should be consulted before the decision is made—but you recognize that your point of view may not prevail.)
  • You determine that a team or group has the judgment to make the decision, so you delegate it to the group and accept and support the decision the group makes. This makes it a delegated consensus decision. (Again, you may be consulted, but your opinion may not carry the day.)

Most managers think they know what it means to delegate. But let’s be clear. When we delegate a decision to someone else, we are giving that person (or that team) the authority to make the decision. We’re not holding back a trump card. If we do, it’s a faux delegation. If you delegate the decision, then you trust the other person to make the decision—and you are going to support it in most cases.

Democratic Decisions

In some instances a decision is decided by vote. These are democratic decisions, and they also have two subtypes:

  • A group of people working together gathers information, discusses alternatives, and then makes a decision by vote. This is typical of an elected body, such as a city council.
  • A group of people largely unknown to one another gathers information and then makes a decision by vote. This is typical of a group of citizens in a democracy.

Conclusion

Complex decisions are typically “nested”—meaning that several different types of decision processes feed into one final decision. It’s like a set of wooden Russian dolls that slip neatly one inside the other. In deciding to purchase a new IT system, for example, a team may be delegated responsibility to reach consensus on a recommendation to forward to the senior management team, where the decision will be made consultatively by the CEO, who will in turn take the plan to the board for a final, ratifying, democratic vote.

To manage the decision well, this process needs to be well understood by everyone. By being transparent about the process, you can help people behave more effectively and efficiently. In the example above, the team of engineers may figure that it doesn’t need to spend time reaching consensus on a single option, knowing that the final decision will be up to the CEO and the board. Rather, it can reach consensus on the two best options and forward those for their consideration.

Effective leaders help people see the implications of the “assumption of competence.” They train themselves and others to question their assumptions and to keep an open mind. In so doing, they model the kind of open and collaborative communication that is so important to developing a high-performing organization. When faced with a tough “right vs. right” decision, effective leaders see themselves as stewards. They look to the core values, consult deeply, reach a moment of resolve, communicate the decision, and move on. We should do the same—and move on to learning about how your personal qualities as a leader can help inspire trust.

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