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Essential Leadership Skills: Decision-making

Essential leadership Skills: Decision-making  · 

Decision-making is one of the defining skills and responsibilities of all the successful leaders. It is an essential skill through your whole career, as the decisions you make (or don’t make) in your work and in your personal life will in the end define who you are, and what you will achieve. You will also need the decision-making skill to be able to prioritize your work and to choose new additional responsibilities to extend your expertise and impact while building your career. When we speak about essential leadership skills, decision-making has to be mentioned, and you will learn all the basics you need in this article.

The decision-making is always a balancing act between facts, timing and feelings. It is a skill that can be trained, and it improves with experience. Fully objective, fact-based decisions are often considered essential in business situations, but the fact is that decisions made by humans are never completely objective. Even the toughest business decisions are coloured by our personal worldviews, and we weigh the value of risks and rewards with our human feelings, such as fear and hope.  Our decisions reflect our underlying values and principles, and thus very much show, who we really are. Good decision makers understand all this, and they have tactics and tools in place to make sure they have the best chance of making good decisions.

The biggest problems in decision-making occur when people let their personal feelings to take over and ignore the facts: Either the situation is not analysed correctly, and essential facts are missing, or the decision maker just ignores the facts, and proceeds to decide based on his own feelings despite the facts. Both cases will end up with a decision that is most likely not optimal, and can in fact be catastrophic. To avoid these problems, most effective decision makers have a framework that guides their work and ensures that they consider all the essential things.

Decision-making skill: Ability to use an effective decision making process

To become an effective decision maker, you need to have a framework for decision-making.  Here is a basic decision-making process that is proven to work in most situations. It is important to understand that the decision-making skill is in the end just an ability to use a solid decision-making process or framework to effectively analyse all the available options and then choose the best one of them.

  1. Identify that there is a decision to make: Be clear what you are exactly deciding, and what is the goal of the decision.
  1. Understand what kind of decision-making is needed for which situation: Is a fast decision more important than a very accurate one? These two are always on the separate ends of the scale, and you have to find the right balance. Don’t use endless information gathering to postpone hard decisions, and don’t make too quick decisions when something important is on the line, and you clearly don’t have enough information to make the correct decision yet.
  1. Get as analytical as is needed, and check the facts, but don’t waste time for anything that is not essential.
  1. Remember to think from different perspectives, and ask for different people for diverse opinions, if needed.
  1. Define your options and possible solutions. For each decision there are always at least two options: “Yes” or “No”.
  1. Think of possible different outcomes for different decisions: Having 3 basic outcomes is usually enough, the best case, the worst case, and the expected outcome.
  1. Weigh the risk/reward ratio objectively for each option.
  1. When you have everything you need, decide immediately, and start to execute.

There are a couple of additional factors that you should also consider when making decisions or preparing things to be decided within your team:

  1. If there are too many options to decide from, you might encounter a phenomenon called decision paralysis: When you have many options to choose from, it becomes impossible to choose anything. Also, among too many options, the bias to choose the most obvious “default” option becomes extremely strong, just to end the feeling of uncertainty that the very existence of too many options presents. This might lead into some quick but bad decisions when all the options weren’t really even considered. Also, if there is an option to do nothing among the several other options, it becomes quickly the default option, regardless of the fact that it is often not the right choice.
  1. Making decisions takes mental strength and willpower. The more tired you are, and the more decisions you have already made this far, the harder it becomes to make more sound decisions. When you have exhausted your willpower, your mind will just want to end the uncertainty quickly, and choose again the most obvious “default” option, regardless if it is actually the best choice.
  1. It is important to know that our brains are biased on maintaining the status quo and securing the already attained benefits. They tend to avoid making even small risky bets to gain new possibilities and greater benefits if it puts in risk something that we already have and could lose. Thus, we most often tend to make the safest possible decisions and avoid the discomfort of taking any risks. We tend to do this, even if the possible gain outweighed the possible loss significantly. If we don’t intentionally balance this bias, we will end up passing many good opportunities just because of our skewed risk avoidance-mindset.

If you are not aware of these factors, your decision-making is in risk of becoming as “satisficing” action: You choose the first seemingly good enough option, without really even trying to find the optimal one just to satisfy the need to decide something.

As you keep using the same framework, your decision-making starts to turn into an automatic process that you will run for every decision. You won’t need this heavy process for your trivial decisions, but it is good to use it for more complex and important decisions to make sure you consider all the necessary facts and perspectives. The decision-making is really a skill that gets better once you know the basics and it improves with the experience.

Action: Check your decision-making process

Your personal decision-making process has been probably well established already, whether you know about it not. Check your current process against the one above and see if you are missing anything. Make adjustments if needed, and write down your process, so you can check it whenever you encounter a significant decision.

No decision is also a decision – and usually a bad one.

Essential leadership skills: decision-making

Whenever you avoid making a decision or delay it with no reason, you are actually making a decision. It is just a decision to give up your power to decide and to avoid the responsibility. You will just take a passive role and watch how the things will play out. I talk about ownership in this book, and part of it is owning your decisions: Making them, and living with them.

Not making decisions is avoiding responsibility and accepting the mentality of a victim who is not in control of his actions and outcomes, and this is exactly opposite to the mindset that this book promotes. Lack of career success and achievements in life is often caused just by a missing decision to make things happen and then committing to the decision. So, when a decision needs to be made, and you have the facts to make it, just make it and commit to it.

Different people, different decision-making process and skills

It is also good to understand that different people have different tendencies on their decision-making. Some rely more on their gut and like to pull out fast decisions based on their hunches. Some rely only on the facts, and will not make important decisions until they have exhausted all the resources for gathering data and making analysis. The effective decision maker can balance between these two and choose the right mix for each decision he is faced with.

Another aspect of the decision-making is how inclusive the decision maker is. Does he let everyone to have a vote in the democratic way, or does he dictate the decisions without anyone else? For most business situations the sweet spot is in the middle, where the leader lets stakeholders to voice their opinion, and then decides by himself.

The last important thing to remember is, that nothing starts without a decision. To be effective in execution, you need to first be effective in your decision-making. Decision making is truly an essential leadership skill, and it will separate the good leaders from the rest.

There is a lot of information available for effective decision-making. If you feel that you need some additional help on becoming and effective decision maker, please seek out books such as Decisive: How to Make Better Choices in Life and Work by Dan Heath and Chip Heath, or How We Decide by Jonah Lehrer.

If you want to learn more about most important leadership skills, you should also read this article:  Become a Leader: 12 Most important leadership skills

If you want to learn how to do everything discussed in this article, check out my best-selling book on Amazon!

7 Principles of Becoming a Leader – The definitive guide for starting and building your management career by Riku Vuorenmaa will teach you this and everything else you need to know to build your dream career.

Do you want to lead?
 

7 Principles of Becoming a Leader is the only book of its kind that covers everything you need to do to become a leader. The comprehensive method outlined in this book will guide you through all the essential principles of building a successful management career:

Professional development: Personal excellence and productivity 
Leadership development: Mindset and essential leadership skills 
Personal development: Your identity and character as a leader 
Career development and management: Get promoted and well paid 
Social skills and networking: Work with the right people 
Business and company understanding: The big picture 
Commitment: Decide and commit to become a good leader  

7 Principles of Becoming a Leader starts from the very beginning of the leadership journey and takes you through every step to becoming a leader who is in control of their work, career, and life.

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