How an organization makes decisions greatly affects whether or not it will have sustained levels of success. Any company can get lucky every once in awhile, but relying on ad hoc judgments is not a good strategy. One of the most important things a leader does is make decisions. He/she must also create a culture that knows how to make sound judgments without relying too much on any one individual. In essence, you want to foster an environment where you, your management team, and other key employees use decision making filters to increase the likelihood of making the right choices.
The first filter has to do with the mission/vision of the company. If you don’t have this clearly defined then you are already at a disadvantage. It all starts with who you are as an organization, why you exist and what you are hoping to accomplish. All major decisions should be easily justifiable through the lens of how they advance the core purpose and direction of the company.
The second filter is related to your organizational values. Every business needs to have clearly defined expectations of behavior that drive daily interactions and decision making. I advise no more than 5-7 core values that should act as a checklist to guide performance and establish firm boundaries of what is acceptable and what is not. As an organization and leader, you are and always will be what you tolerate.
The third filter relates to financial objectives. Every business should have some basic economic goals in terms of growth, profit, return on investment, payback period, net present value, etc. This doesn’t mean you won’t take risks beyond your economic comfort zone, but it does mean you will be fully aware of it when this happens and factor in the risk appropriately. Ignorance about the financial implications of your decisions is leadership malpractice.
The fourth filter has to do with fit with your organizational skills and capabilities. One of the biggest traps that organizations fall into is trying to do things they are ill equipped to accomplish. You can’t be good at everything and can typically be expert at only a few things. Once again, you may decide to stretch beyond your comfort zone, but you will need to make the requisite investment in addressing any existing skills/talent gaps.
Finally, the last filter has to deal with passion and enthusiasm. Is this something that excites a core group of people within the company? Will key employees put forth the extra effort because the want to not just because they have to? To be great at anything you need to genuinely care about doing a good job and believe the effort required is worth it.
If you simply as the following questions before making any important decision, I guarantee you will end up with better decisions:
- Is this a good fit with mission and vision of the company?
- Is this aligned with our organizational values?
- Does it meet our economic objectives?
- Is it a good fit with our core skills and competencies?
- Do we have the requisite level of passion/enthusiasm in-house to be successful?
- When Core Values & New Ideas Collide (inc.com)
- Judgement Calls: a book review (blogs.gartner.com)
- What You Don’t Know About Making Decisions (beckersbest.wordpress.com)
- Leadership, Democracy and Decision-Making (llpathways.wordpress.com)
- Strategic Leadership and Decision Making (lifeissublime.wordpress.com)
- Leadership Thought #304 – Be Wary Of Making Assumptions And Jumping to Quick Conclusions (edrobinson.wordpress.com)
- Todays Meditation word: Judgment (dailythoughts89.wordpress.com)
- At the table – or not – with executive decision makers (theglobeandmail.com)
- Five Critical Questions About Organization Culture That People Avoid Asking (futurelab.net)
- Fact-Based Decision Making: Driving Cultural Change (openviewpartners.com)