An executive in a knowledge organization is making decisions every day. The nature and scope of these decisions vary from small approvals to making strategic long-term choices. But what is always there in an executive’s life is plenty of decision-making. The thing worse than making wrong decision is making no decisions. An executive with a stalled decision-making capability – potentially always in an analysis-paralysis mode – is headed nowhere.
Decision are also very obvious and public. You see world leaders announcing their picks for key appointments or a major foreign policy decision very publicly. Business leaders make sure their organization’s key strategic decisions of going into a new market or making an acquisition are known to everyone.
This sometime can make one see decisions as events rather than a process. Making a decision is the end of a process, not just execution of an event. There is a lot of homework and evaluation done behind every major decision. Announcing or communicating those decisions to stakeholder is the event that potentially completes the process.
So what does that process entail – or should entail?
Evaluating at the highest conceptual level While what may come to an executive’s desk for a decision may be the result of a specific situation – news of a competitor’s buy-out, a bad review of a product, a request for a meeting, an unexpected resignation – it needs to be evaluated at the highest conceptual level. What does this event relate into? Which compartment of the organization does it belong to? An executive, while thoroughly triages the event or situation, connects it to a ‘bigger picture’ and makes a decision based on how he believes and has planned to do in the bigger scheme of things. The response is part of a bigger policy rather than an ad-hoc and arbitrary response to a situation. For example, how does the company generally handle bad news? what is the company’s policy to respond to bad press? how does the resignation of an employee fit into company’s year long employment plans?
This ability to raise from the chaos and smoke of the battlefield to a strategic location with a wider view is critical to effective decisions. There is no such thing as an independent and isolated decision. Every decision fits into a bigger whole.
Evaluating the alternatives Every good decision is made after evaluating the alternatives. Explicitly crafting and thinking them out is critical to a balanced decision. An executive mind’s runs through parallel decision paths before converging on one. It is never a linear process. For example: how would the top three candidates do in a particular role? how does a decision to invest in a particular market compares to alternate decisions to invest in another market or to not investing at all.
The challenge is that these alternatives are mostly not obvious. They have to crafted out, imagined, brought to life and made part of the decision-making process.
Defining actions to implement Drucker said that decision are merely statement of intentions unless they are associated with actions to implement them. At least an action to get started. That is what happens everyday. Decisions are made, declared and hyped – but they never get implemented. Immediately defining and associating a set of actions along with the decision will entail effective implementation. For example a decision to expand a team is associated with release of budget and communication to HR; or a decision to meet an executive from another business unit is immediately followed by sending the request to schedule to his staff.
Communicating the decision Every decision has stakeholders – people who are or can be affected or those who need to be informed. One of the most logical immediate ‘action items’ associated with a decision is to communicate the decision to the stakeholders. For example, updating HR about a decision to hire or informing the company’s shareholders about a strategic business direction. Communication is part of the task.
Follow up Most decisions require a long-term implementation or monitoring. Many decisions get lost in organizational chaos if not properly followed up or checked on for progress and input. All systems and processes move towards chaos – unless they are checked upon, followed through and refined and energized as required.
Another nice piece of extract from an experienced pro… I really like the part under “Evaluating at the highest conceptual level”…
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