Which way to go? How to get there? What to do next? These, and many other questions must be made every day. The truth is life is filled with decision-making and how to best manage this process in our businesses takes some forethought. In this week’s Power Idea, Strategic Partner, Diane Janovsky, talks about Deciding How To Decide. This is one you won’t want to miss!

Look at any list of critical skills for managers, and decision-making will always be at or near the top. A track record of good decisions leads to raises and promotions. Too many poor decisions, and a leader won’t be a leader for long.

In the old-school view of management, the boss was the “decider”. Whether the issue was big or small, strategic or tactical, the manager was the sole authority and was expected to make the judgment call. Inputs might be solicited prior to making big decisions, but that was about the extent of employee involvement.

However, today, a more decentralized, agile and team-based approach is required in our increasingly complex world where change happens at light speed. Added to that is the impact of Millennials in the workforce who have high expectations for engagement and influence on the organization.

The result is that the first and most important step a manager should take when faced with a decision is to “decide how to decide”. This may sound ponderous at first, but with experience, the process will become easier, quicker and more intuitive.

In fact, general rules or guidelines can be established in advance and explicitly shared so that everyone’s expectations are better aligned. This, by the way, also factors heavily into shaping the company culture (“how we do things around here”).

There are two main questions the manager should ask:

1) At what level in the business should decisions be made?
Pushing decision-making down to the lowest practical level is an effective approach to speed up the process, increase employee engagement and improve the delivery of products and services. For example, customer service agents can be authorized to make certain types of discretionary billing accommodations up to a certain dollar amount, on the spot, rather than involving a manager each time. Like any act of delegation, the key to success is to clearly define rules, boundaries and accountability for outcomes.

2) What decision-making method is most appropriate?
The answer to this question is a bit more complicated and requires some definitions:

Authoritative – The authority (usually conferred by job title, but can also be a topical or technical expert) makes the decision purely on their own, using their own parameters and knowledge.
Consultative – The authority gathers ideas, evaluates options and then ultimately makes the decision.

Minority – When a group defers to a sub-set of members who possess specific expertise or knowledge.
Majority – Perhaps the most familiar method of decision-making that entails voting by group members. Variations include simple majority, super-majority or (the very difficult to attain) unanimous vote.
Consensus – Reached when all members of a group can support a decision, typically after extensive discussion, even if it is not their first choice.

No decision-making method is necessarily the best in all circumstances. Each one has its own pros and cons, and varies in effectiveness for a situation. Some key considerations include urgency of the issue, the complexity of the issue and the level of buy-in needed for successful adoption of the solution.

Armed with this information, a leader can then decide how to decide. Some examples may be helpful.

* It is completely appropriate for a SWAT leader to be the sole person in command at a crime scene. Depending on the circumstances, they may act purely as the authority or they may consult with others, but when time is of the essence, someone needs to make the call.
* For process changes on a factory floor, the production manager should empower work teams to make group-based decisions. They can use majority vote where the options are fairly simple and there are no major objections, or minority vote if there are a small number of team members who are the experts in that particular process.
* A CEO would be well advised to partner with their executive team to make a group decision via consensus to agree on a significant change in strategy.

The main ingredient for success is for managers to make conscious and intentional choices about who will make decisions and what method will be used, and then communicate that clearly to their organization. This clarifies the rules of engagement for all. And when the leader also consistently demonstrates that decision-making will be shared as much as possible, that creates a culture of transparency, fairness and inclusion.

To learn more about decision-making and other important management skills, contact us at info@hpisolutions.com.