5 Ways To Improve Your Decision-Making

Great leaders have to get outside their comfort zones and force themselves to make tough decisions even when they don’t have all the information they would like. One CEO shares his strategy.

When I have the opportunity to promote one of our employees into a company president role, it is always exciting for both me and them. I love giving people opportunity, especially an opportunity as big as a president role, and often, it is a dream opportunity for the person being promoted.

There are a few things I always discuss with the leader before they assume their new role, but at the top of my list is sharing something for which they cannot prepare: the weight of responsibility that comes with being the top leader. When someone moves to the top of an organization’s hierarchy, there is often a realization that the responsibility they have previously shared with a boss is now all theirs. Of course, they still report to me as Correct Craft’s CEO, but I give our presidents a lot of autonomy; it makes them better leaders if they feel both responsibility and accountability.

Leaders with a conscience realize that their decisions have a big impact on employees, the employees’ families, and a host of other people. The weight of that responsibility feels heavy. When you combine it with another common challenge—the fear of being wrong—the sense of responsibility can almost paralyze a leader, and the repercussions are felt by both the leader and their team. Good leaders are willing to get outside their comfort zones and force themselves to make tough decisions even when they don’t have all the information they would like.

I also like to remind them that their success is much sweeter when they have made the decisions necessary to achieve it.

Probability and Resulting

Ever notice that some people have a knack for making the right decision? Do you wonder if they are lucky, smart or intuitive? Or a combination of the three? Ever notice that others seem to consistently make bad decisions? Do you wonder why they cannot catch a break?

I was thinking of these questions as I finished former President Obama’s book, A Promised Land. In this interesting book, the former president shares his perspective on the 2008 election and the first three years of his presidency. While reading the book, something Obama wrote jumped off the page at me, something most readers may not have noticed. He wrote that as president, he very rarely had simple decisions to make and that he was always dealing in probabilities. It was the word “probabilities” that made me think about the process leaders use in decision-making.

As leaders, while we may not be required to make the consequential decisions of a U.S. president, we are still making decisions that will have a big impact on organizations and people. Sometimes those decisions end up being wrong even though they seemed right when we were making them. Often that is because of probabilities.

For instance, even if we make a decision that is the right decision 80 percent of the time, one out of five times, that decision will turn out to be wrong, and the negative impact of being wrong may be significant. We often label someone who gets caught by the 20 percent probability a bad decision-maker when that may be untrue—80 percent of the time, they would have been a hero.

Sometimes the opposite also happens. A leader may make a bad decision, but the low-probability result occurs, and they are labeled an “expert” or “guru” when they’re clearly not. People think the bad decision-maker saw something coming that others didn’t when they actually just made a bad decision and got lucky. That’s why it’s smart to make sure you’re not taking too much advice from a “one-hit wonder.”

In her excellent book, Thinking in Bets, professional poker player Annie Duke deals with this conundrum, which she calls “resulting.” Resulting is when we determine if a decision was good or bad based solely on the outcome and overlook the process used to make the decision, thereby ignoring probabilities and luck, either good or bad. Many of us much prefer to use resulting because it is simple and, frankly, we often don’t care how the decision was made; we just want the right outcome.

Improving Your Decision-Making Process

Fortunately, a good decision is still generally a result of a good decision-making process, and there are some things we can do to improve our ability to make the right choice.

Below are five ways to improve your decision-making process and become a better decision maker:

• Clearly identify what you need to decide. This seems obvious, but frequently, it is the biggest decision-making challenge. Often, our team will frame this as, “What is the problem we are trying to solve?” Creating clarity around what is being decided and what problem is being solved will significantly improve the odds of making a good decision.

• Use broad data. The foundation of a good decision is good information. When speaking at conferences, I have often held up a beach ball to make this point; I explain that whatever slice of the beach ball we are standing on will color our perspective. Good decisions need good information from different perspectives. But often, leaders who don’t want to make a decision make the mistake of asking for more and more information, frustrating their team. We should be sure to brainstorm while also being aware of diminishing returns and avoiding paralysis through analysis.

• Think past the immediate impact. Sometimes when we are deciding something important, it is hard to get out of the moment and immediate concern. We need to consider possible unintended consequences. We also need to consider the worst-case impact of our decision, keeping in mind that a low-probability, huge-negative-impact worst case may want to be avoided while even a high probability, but low impact worst case may be within the leader’s risk tolerance.

• Have someone play devil’s advocate. The devil’s advocate was a position first used in the 1500s by popes of the Catholic church to argue against the canonization of a candidate up for sainthood. The devil’s advocate’s job was to find reasons not to move forward with the canonization. This process is also important in business decision-making and described well in Edward de Bono’s book Six Thinking Hats.

• Decide based on principle, not emotion. This is probably the toughest way to improve decision-making because when leaders are making decisions based on emotion, they are usually totally blinded to what is happening. Emotion can make our thinking seem very clear, even though it is extremely clouded. Emotion trumps logic every time.

The best ways for a leader to avoid this is to be self-aware and surround themselves with a team who not only sees things differently but also is willing to speak up when the leader is emotionally hijacked.

I suspect there are some leaders reading this thinking it might be good for others, but they have a great track record of making good decisions on their own. I understand that feeling. However, I also know that probabilities will catch up with even the best decision-makers. Using the steps above will help leaders ensure they have a good process even if the outcome is negative.

One of our key values at Correct Craft is the idea of being both “right and fast.” It is easy to be right if you have enough time, but being both right and fast provides a competitive advantage. Sometimes even with the best process, you will still be stung by an unlikely probability; however, the above steps will help improve the probability of making good decisions and ensure that your organization is both right and fast.

 

Excerpted, with permission, from Education of a CEO: Lessons for Leaders, by Bill Yeargin (Ignite Press, May 2021).


Get the CEO Briefing

Sign up today to get weekly access to the latest issues affecting CEOs in every industry

upcoming events