One of the biggest paradoxes in business is that good leaders can make bad decisions. You can’t possibly choose the right solution every time, and with the benefit of hindsight, you recognize market dynamics and internal challenges that should have been considered. Most leaders recognize this challenge and have a natural predisposition to ‘get things done’ and ‘make a call’ because they know ambiguity and indecision can paralyse an organization. Leaders make good leaders largely because they are comfortable being uncomfortable – they have the personality to make tough, sometimes impossible decisions that other people would run a mile from. However, while they are often confident in making the tough calls, there are critical factors that can improve their odds of choosing the right solution.
Global experts, such as Professor Sydney Finkelstein from Dartmouth's Tuck School of Business, have researched and written about decision-making for decades. They have found that cognitive biases, misleading experiences, and prejudgements, as well as inappropriate attachments to people, places, and things, can all affect the decision-making capability of even the most experienced leaders. McKinsey research highlighted that only 28 percent of executives touted the quality of their company’s strategic decisions, while 60 percent reported that bad decisions are about as frequent as good ones. While there are many ways for leaders to improve the quality of decision-making and enhance innovation and creativity, fostering better collaboration and lower levels of conformity when choosing solutions to problems is foremost.
A Queens University of Charlotte study found nearly 75 percent of employers rate teamwork and collaboration as “very important,” yet 39 percent of employees said their organization doesn't collaborate enough. Plenty of leaders will read these statistics and think, “we just don’t have time for over-collaboration, we need to get on with it!”, seeing collaboration as redundant to letting ‘the experts’ make a call. The tendency to view collaboration as a time-suck is countered by McKinsey’s research, which suggests that employees save an average of 50 minutes daily due to efficient collaboration. Additionally, organizations with collaborative leaders are four times more likely to outperform their competitors, according to the Harvard Business Review.
While many people think about decision-making and problem-solving as ‘choosing’ solutions, the ability to make good choices relies on earlier stages of accurately identifying and understanding the problem at a deep level. If the problem is poorly understood and potential solutions are suboptimal, then you’re choosing from a bad bunch. Assuming a business has quality processes in place for identifying and understanding problems, as well as generating effective solution options, the third stage, ‘choosing’ the right solution, involves two vital elements: ‘Dialogue’ and ‘Decisions’.
Dialogue for Better Decisions
Leaders with high levels of experience and confidence can often make the mistake of ‘going it alone’ and trusting their gut in major decisions, saving the team the time and hassle of disagreement. But having the right dialogue to enable the right decisions requires healthy conflict – genuine, robust discussion and debate. This is often a major risk area for businesses, as high levels of conformity and a fear of conflict can lead to poor collaboration, limited innovation, and false alignment – people saying they agree when they really don’t. Agreement without alignment erodes engagement and future accountability when people need to take action. Organizations need to make the best choice, but also choose it in the best way to ensure alignment and commitment to executing the solution.
The first step in choosing the best-fit solution to solve the problem is ‘discussion’. When teams are functioning well, there is a high level of psychosocial safety, allowing different individuals and teams to hold diverse opinions. There should be a big, immediate red flag if there’s no debate. The various solution options need to be discussed and debated by people with different perspectives, experiences, and cognitive styles, asking lots of questions: “How did we arrive at this option? What are the pros and cons? Who does it advantage? Who does it disadvantage? What if we do the opposite? What evidence and past experiences suggest the chosen option is the best option?”. Leaders must encourage individuals and teams with high levels of curiosity and courage to constructively challenge all options until they are aligned on the best decision.
Psychosocial risk factors such as anxiety, ambiguity, and conformity all pose major risks to robust discussion. If the team is anxious, they will tend to steer the discussions towards questions and options that lower their anxiety but aren’t necessarily solving the problem, sometimes referred to as ‘moving deckchairs on the Titanic’. Ambiguity harms the discussion process as people may waste valuable time discussing the wrong things because they are unclear on the options, the problem they are trying to solve, who they are solving the problem for, or the outcomes to be achieved.
Conformity is the ‘silent killer’ of innovation and creativity in discussions. Leaders who don’t actively implement strategies to encourage collaboration will limit the quantum of new ideas, and a leader who lacks the ability to listen to feedback and take on board different points of view will drown in their own echo chamber and finish with false alignment. An effective leader with the right personality will lower conformity by role-modelling and encouraging healthy conflict amongst the team and genuinely take on board feedback. While millions of leaders around the world have taken courses and been coached in how to give feedback, very few have actively developed the unique skill of receivingfeedback.
Decisions, Decisions, Decisions…
After healthy dialogue and debate, it’s time to decide. It might seem simple to say; “just make a decision”, but how do you decide? If the discussion has been honest and robust, there is likely to be more than one option available. These options create choice which requires the right economic and ethical decisions, which raises questions – “What process does the team go through to decide? Do they pass it to the leader to make the decision? Is it decided by a democratic vote from a shortlist of options? Should the customers decide? Does the business run options in an A/B comparison design and see what the market says?” There are thousands of questions to facilitate the choice, which can lead to ‘analysis paralysis’, endless discussion, and no decision without effective leadership.
Conformity, stimulation, and anxiety are key risks in the decision stage. Conformity impacts the quality of the decision as well as the level of genuine alignment. When individuals or teams choose to give in or feel they should conform to one view rather than applying a decision-making framework. Many leaders successfully apply the strategy of ‘speak last’ so the team is unaware of their position and can’t conform to it. Stimulation compromises the process of deciding as it drives people to make quick, snap decisions rather than engage in methodical decision making. And unless the leader allows people to disagree, make mistakes, and invest time in quality decisions, anxiety may impact the decision process, as many people will choose the safe or easy option rather than the best option as a way to lower their anxiety.
For a team to truly be a high-performing team and function at a high level, the leader must possess the personality to create truly collaborative environments that allow for healthy discussion and quality decisions that foster innovation and engage the team. The modern leader needs to be socially aware and protect the psychosocial safety of their team, minimizing anxiety and ambiguity, creating the right stimulation and energy, and ensuring low levels of conformity so people collaborate and feel free to disagree.
There is more to leadership than simply ‘making the tough calls’ – in fact, good leaders often make bad decisions when they go it alone. To gain a genuine competitive advantage organizations must measure how capable their leaders are of enabling robust and effective decision making across their teams. To find out more and measure the problem-solving potential of your leaders and their impact on the psychosocial safety of their teams, check out the science behind The GreyScale Leadership Assessment tool and find helpful resources at http://tgsleadership.com
