Effective Decision Making Steps for Leaders

Effective Decision Making Steps for Leaders

Effective Decision Making Steps for Leaders
Indecisiveness hinders many organizations. When leaders and teams struggle to effectively make, balance or follow through on decisions, both short – and long-term performance suffers.  Effective decision making steps for leaders matters.

The Higher the Stakes, The More Decision Making Matters
Decision making may be the most critical job of a leader. The higher the stakes, the more decision making matters and teh more important it is for organizations to understand and agree to effective decision making steps for leaders.

Decisions
Decisions—who makes them and how they are made—are the basic building blocks of every business.  If you are going to succeed, you need to make the right decisions fast enough and consistently enough (often with limited information) to keep the organization moving in the right direction.

Just think about it – every positive move and every failed move is the result of a decision that was rightly or wrongly made.

What Our Research Says About Effective Decision Making Steps for Leaders
Based upon our Organizational Alignment Research of 410 companies across eight industries, effective decision making is one of the seven most influential factors in achieving organizational alignment and higher performance.  And in case you think alignment doesn’t matter, pay attention: highly aligned companies grow 58% faster and are 72% more profitable while, at the same time, significantly outperforming their unaligned peers in terms of:

  • Retaining customers 2.23-to-1
  • Satisfying customers 3.2-to-1
  • Effectively leading 8.71-to-1
  • Engaging employees 16.8-to-1

An 8x Difference – Effective Decision Making Steps for Leaders 
If you are looking to outperform your peers, be sure decisions are made effectively throughout your organization in a way that balances short- and long-term priorities. The research found:

  • 88% of respondents from high performing companies reported decision making
    that company decisions demonstrated a healthy balance of short- and long-term focus.
  • Conversely, only 11% of respondents from under-performing companies reported that decision-making was effective.

Effective Decision Making
At the most basic level, good decision making is a three-step process:

  1. Priorities: Knowing what matters most and why.
  2. Accountability: Ensuring that people live up to their commitments.
  3. Responsibility: Assigning responsibility for implementing the decision.

1.  Priorities
Effective decision making steps for leaders starts with knowing what truly needs to be done and why it is important compared to other priorities.  Many leaders and teams struggle with decision making because they allow too many priorities to creep into the performance environment.

Effective priorities:

Effective priorities represent the short list of the 2-3 things that you and your team believe will enable you to succeed in a way that makes sense.  Some should be achievable in the short-term (90-days); and some should have a longer time horizon.

You will know your priorities are clear enough when the entire team:

  • understands them
  • believes that they are the right ones to move the plan forward
  • has confidence that they can be achieved in your unique organizational culture and marketplace

That means that you need to involve and consult with others.  Only then will you be able to make an informed choice and get the buy-in required to get things done.

2.  Accountability
Once everyone involved understands and believes in the priorities, your next effective decision making step for leaders is to create a performance environment that enables people at all levels to make well-grounded decisions that align with your priorities. We find that the more people feel in control of decisions and responsible for the related consequences, the more likely they are to exercise the judgment necessary to make effective decisions.

To create an environment of accountability, make sure that you:

  • share information openly
  • surface and resolve conflicts quickly
  • address poor performance
  • share resources
  • give honest feedback and discourage indecisive behaviors
  • involve the appropriate levels of leaders and subject matter experts
  • recognize contributions
  • follow up on commitments
  • monitor and measure performance
  • make sure every meeting ends with a clear understanding of decisions and next steps

3.  Responsibility
Thirdly, there should be one person in charge of ensuring proper execution. Good decisions that are poorly or too slowly implemented lose their value. So this role is as critical as getting the priorities right and creating the right level of accountability. Select someone who is totally committed to the decision and has the expertise and the influence needed for successful execution.

Then make sure that they and their team can all answer the following five questions:

  • What specific decision needs to be made?
  • Why is this decision important?
  • Who needs to be involved in making the decision?
  • How will the decision be made?
  • When does the decision need to be made?

The Bottom Line
Highly aligned organizations a have a well-established process for decision-making that is understood, accepted and practiced across all functions.  Follow these three effective decision making steps for leaders if you want to outperform your peers.

To learn more about getting aligned, download 7 Immediate Management Actions to Create Alignment with Goals

 

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