At work we tend to obsess over decision making. We like and admire decisive people; one of the most damning things that can be said of a leader is, “they just can’t make decisions.” Organisation dysfunction is often typified by a lack of understanding of who’s responsible for decision making, who should have voice on the issue (before the decision is made), and by the degree to which the organisation’s culture allows ’unpicking’ (the toxic process of water-cooler subterfuge that undermines decisions and fast or slowly erodes the grit and grip required to see a decision through).

But equally, and in reverse, we have a queasy reaction towards ‘over decisiveness;’ a barging in on neutral territory, an imposition of urgency or panic where it’s not required, or of autocratic leaders who make apparently poor judgements, without sharing their ‘workings out’ or discussing the problem or scenario with others.

It would therefore be fair to conclude that making good decisions is a complex skill. But as countless studies of decision making in business call out the rarity of such an ability, it’s surely one worth investing in. Particularly now, in an environment of such political and economic uncertainty and change - why not stand out from the crowd and be that decisive individual who people turn to, and who role models the best ways to decide whether to turn left or right?


Good decisions


First, let’s clarify terms. What is a good decision?

In a business context, key decisions have critical implications that often reach beyond what’s immediately obvious. We tend to be focused on the short term, and on the impact of the decision on the most visible and influential stakeholders (frequently shareholders or owners). Many businesses use ‘balanced scorecards’ to evaluate performance, risks and opportunities against multiple factors (such as the impact on customers, staff and business operations, as well as financial stakeholders, for example). But it’s unusual to hold all these competing factors in balance. It’s usually a very unbalanced scorecard!

So, as a first principle, a good decision must be one that has considered long term consequences as well as short, and understands the impact of the decision on various groups of stakeholders. 

So if that’s what a good decision is, how can we go about making one?


Principles not policies


Most critical in good decision making is the ability to hold on to the values or principles you’re bringing to the process. How often have we been in meetings where after 90 minutes of intense, frustrating discussion, it’s become clear that the people in the room are being guided by different points on the compass?  Someone’s referring to rules, regulations or policies, someone to the company’s values, someone to precedent and someone to their personal agenda or ambitions? Thirty minutes, or three hours later (depending on how unfortunate you are), the meeting’s called to a halt, only to be re-opened on four different floors of your offices, at four different water coolers, with four different factions of demotivated and irritated staff.

"The best leaders can articulate, and live by, the principles that guide their decisions."

This is where the idea of principles can help. The best and most strategic leaders are able to articulate, and live by, the principles that inform their decisions. These principles might derive from their professional background, their personal values, the organisation’s strategy, or a combination of these. Principles that are tied to an organisation’s purpose or beliefs are not susceptible to erosion or fluctuation and so provide a ‘true North’ for decision makers. As a consequence, focusing on principles is likely to result in good, understandable and relatable decisions. Unlike a fixed ‘best practice’ or template, the principles’ application adapts to fit different circumstances or situations. Easy to say, hard to do, particularly in environments where regulation and enforcement have at times inhibited thoughtfulness, common sense, or an orientation to principles. In this context it’s worth remembering the words of Ray Bradbury, author of Fahrenheit 451, “if you learn only methods, you’ll be tied to your methods, but if you learn principles you can devise your own methods.”


Evidence, within reason


Decisions made without evaluation of evidence are likely to be poor. But decisions based solely on ‘tangible’ evidence or data are likely to be poor too. And indecision, based upon a fear of not having enough evidence, is basically a black hole from which it’s a struggle to emerge.

So, how can we balance these competing factors in support of good decisions, where the long and short term consequences have been considered for everyone impacted?

"It’s a truism that critical business (and life) decisions are best evaluated in hindsight."

The variety and scope of information available to us before we take the blue or the red pill can be bewildering. And it’s likely to become more so, as complex algorithms enable deeper and broader analytics. But what will remain elusive is that glimpse into the future; how will this play out two years or a decade from now? Decca Records decided against the Beatles in 1961; no doubt there were heads in hands five years later when John Lennon pronounced the band “bigger than Jesus.”  Bear Stearns decided to go against advice and interest in the subprime mortgage-backed securities market. You know the rest of that story. And we’ve all had friends who’ve fallen deeply in love, promised ‘til death do us part, and broken up within the year.

So the evidence we’ll never have is the insight as to how our decisions play out in the end. But what we can do is create scenarios. We can play forward what will happen if we do nothing, or if we take the most extreme action course available. We can give voice to groups who will be impacted (recalling the words of philosopher David Hume “truth springs from argument amongst friends”). Research shows that managers and leaders tend to be reluctant to give voice to staff likely to be affected by a decision. But done well, it’s an important tactic. Your front line staff are likely to be sitting on insight and ideas that rarely make it onto decision makers’ radars. There’s a skill in creating safe environments where staff can share these perspectives, but it’s one worth fostering if you want your decisions to be good. 

Equally, we need to be conscious of balancing the ‘hard’ data (financial forecasts, customer figures) and the ‘soft’ data (‘is this decision sitting well with me’, ‘if I’m not comfortable, why not?’). Getting to grips with the outer stuff – all the facts that are being presented – and the inner stuff – your gut response to these facts, your observations of your colleagues’ or teams’ responses – can pay dividends. If you’re not comfortable, there’s likely to be a reason why, perhaps a faint memory of a previous, failed strategy, or a transgressing of your ethical code. Remember this latent, internal noise, is evidence too. Suppress it, and your decision may be the poorer for it.

Future technologies will no doubt enable better, deeper and more complex forecasting and analysis. But the process by which this analysis is turned into decisions is essentially human. Worth remembering when you’re being steamrollered by data and charts!


People, profit and planet


Making responsible business decisions that consider people and the environment isn’t a fringe topic any more. Trust in business is frighteningly low. Banks are no longer seen as enablers of growth and commerce but as rapacious monsters; tech companies once considered ‘cool’ now make headlines for their failure to address their enablement of child abuse or radicalisation; drugs companies are held up as the barrier to improving world health. Trust is an essential currency in any civilized society, and businesses operate under licence from society, not independent of society. And once removed or lost, trust is almost impossible to regain.

So think about these simple tests next time you’re making a decision at work that’s going to affect others:

  • What were the principles that drove this decision?
  • What evidence did we have?
  • Have we worked ‘out loud,’ heard as many voices as possible, before reaching conclusions?
  • Does the decision look and feel right?
  • Has this decision reinforced, or undermined my business’s ‘social licence’ to operate?

And always remember, if it all goes wrong, what’s most important is to learn from the failure, and coach others to do so too. From that process, further opportunities will come.