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4 Key Components of Effective Decision Making for Leaders

Thursday, February 14, 2019
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The decisions leaders make every day present countless opportunities to positively (or negatively) impact their organizations. There are numerous variables that go into making business decisions, so how can leaders truly distinguish a “good” from a “bad” decision? Many times it is only after the decision has been made that the true impact shows; and whether a decision was right or wrong can’t always be determined from the outcome alone.

Fortunately, there are techniques leaders can adopt to perfect their decision-making process and increase the likelihood that their decisions will lead to a positive impact for their organization.

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At Abilitie, we utilize immersive leadership simulations that place professionals in teams, add a competitive element, and ramp up the intensity to mimic the real-world challenges business throws at leaders every day. This creates an ideal “sandbox” environment to observe and analyze what makes successful teams tick and what strategies top leaders exhibit when it comes to effective decision making. Over the past three years, more than 20,000 leaders have participated in one of our simulations, allowing us to consolidate the four ingredients of effective decision making. Here is what we have seen effective teams do that allowed them to make the better decision and pull ahead in the competition.

Identify the Problem—Then Simplify It

As soon as a potential problem comes to light, some teams tend to spring immediately into problem-solving mode without knowing at the most basic level what the problem actually is. What is the underlying issue at hand? What needs to be fixed or changed? Where did the problem originate? What implications does it have? Effective leaders don’t overcomplicate or add layers to a problem; they identify it, then simplify it to its most basic form. This allows them to create an effective path to determine the most appropriate solution to a problem and make the best decision even with imperfect information.

Embrace the Pre-Mortem

Effective leaders take time to consider the potential negative outcomes before deciding what action to pursue. They ask what failure would look like if the resulting outcome went down a specific path. Many teams and leaders wait until the dust settles after the decision has run its course and then conduct a post-mortem. Effective teams take a run at a pre-mortem to explore the reasons why something could potentially fail and what failure would look like. This reframing will keep the team flexible and open to adapting plans as needed. We have many times observed teams that are too focused on why and how an idea could lead to success and neglect to ask what could go wrong.

Welcome the Pivot

A change in organizational direction, or pivot, is an inevitability in today’s business world. An organization with no change mechanisms in place will quickly become stagnant and regress. The same principles apply to the individuals who are making decisions as leaders of a team. Every leader must be prepared to change course when necessary. Becoming locked into one approach and refusing to alter it, even when the key indicators are pointing in a different direction, often leads to bad outcomes. Successful teams realize that the best path forward almost always requires a detour—if not many.

Think Differently

The most successful teams in our simulations consistently consider alternative viewpoints. Many times, success is possible only when it disrupts the status quo. Teams that ensure their decision-making process is open to thinking outside the proverbial box typically succeed more than teams that follow the same recipe in every simulated quarter. Effective leaders consider each problem individually, from multiple angles, often playing devil’s advocate against themselves to make sure they’ve covered all the bases.

Decision making doesn’t come with an instruction manual, and leadership is not a one-size-fits-all discipline. They key is to find a process that works for each individual. Our hope is that leaders can take the four techniques above and integrate them into their own process when considering the pros and cons of important decisions.

About the Author

Matt Confer is the VP of Strategy at Abilitie, an Austin-based company that has been an accomplished leader in management and executive education since 2015. Abilitie’s road-tested solutions, certified, global facilitators, and seasoned implementation teams have delivered value to leading organizations, including over 40 members of the Fortune 500, in over 20 countries.

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