Companies Fail to Make Good Decisions: Why & What to Do

Companies Fail to Make Good Decisions
Our organizational culture assessment consistently show that healthy, decisive decision-making is one of the strongest indicators of an aligned, high-performing organization. Yet many companies still struggle to make consistently good decisions. How leadership teams decide shapes everything — from resource allocation to organizational thinking and action. We define an effective decision as one that delivers the intended outcomes while balancing strategic alignment, cultural integrity, speed, quality, trust, and confidence.

Data from leadership simulation assessments and people manager assessment centers confirm that consistently making good decisions is challenging. A recent McKinsey study found that nearly three-quarters of executives reported that poor decisions were as common as good ones. The good news: with clear guidelines and disciplined processes, organizations can improve decision quality and its impact across the enterprise.

4 Companies Fail to Make Good Decisions and What to Do About It

We know from strategic decision making simulation data that leaders and managers (especially new managers) wreak havoc on effective decision making because they:

1. Fail to Establish Agreed-Upon Decision-Making Processes
   Different types of decisions — tactical, operational, or strategic — require different approaches. Each situation varies in importance, urgency, and risk. However, our experience shows that actively involving team members in the decision-making process consistently boosts engagement and strengthens commitment to outcomes.
   
   Action to Take
   Meet with your team to define how various types of decisions will be made. Clarify how authority will be shared, who is accountable for the process and results, and establish consistent decision-making protocols.
   
   The Payoff: Alignment
   Investing in decision-making training ensures everyone is aligned and equipped to contribute effectively, creating a foundation for better decisions and stronger team ownership.
2. Seek Perfection
   Many leaders fall into the trap of seeking too much information and delaying decisions out of discomfort with ambiguity. They wait for near-perfect certainty, believing it will guarantee the “right” choice. In reality, perfection is rarely attainable — and waiting for it often undermines needed progress and learning.
   
   Action to Take
   Agree upon the amount and type of information you need to make a an effective decision.  Once a decision is made, establish a process to monitor outcomes, learn, and adjust as needed, ensuring momentum without sacrificing thoughtful oversight.
   
   The Payoff: Momentum
   Effective decisions are made when you have sufficient context, alignment and commitment, and understanding to act — roughly 70% of the information needed is a practical guideline for most situations. 
3. Don’t Follow Their Own Rules or Evade Accountability
   Too often, managers advocate for transparency, accountability, and collaborative decision-making — yet undermine the process by making unilateral decisions behind closed doors. Even worse, they may shift blame to the team when outcomes are unfavorable.
   
   Action to Take
   To improve decision quality and team trust, model a culture of accountability and transparency. Do what you commit to and hold others to the same standard. When you solicit input, listen carefully and explicitly incorporate team perspectives into the final decision.
   
   The Payoff: Trust
   This consistency builds credibility, reinforces engagement, and ensures decisions are both informed and owned collectively.
4. Seek Consensus Rather than Alignment and Commitment
   Making good decisions does not require 100% agreement. For complex, high-stakes decisions involving diverse stakeholders, striving for full consensus is often impractical and time-consuming — and that’s perfectly acceptable.
   
   Action to Take
   Focus on achieving alignment and commitment once the decision is made, ensuring it can be executed effectively and sustainably across the organization.
   
   The Payoff: Clarity
   Lack of support is one of the primary reasons decisions fail.The key is to engage stakeholders enough to secure their commitment to support the decision, even if they don’t fully agree. 

The Bottom Line
Sound decision-making is a cornerstone of high-performing organizations. If your company is among the 75% where poor decisions are as frequent as good ones, it’s time to critically examine your decision-making process. Improving how decisions are made is essential for driving consistent results, building trust, and sustaining long-term success.

To learn more about why companies fail to make good decisions, download 3 Steps to Set Your Team Up to Make Better Decisions

by Tristam Brown: CEO

Tristam Brown is an executive business consultant and organizational development expert with more than three decades of experience helping organizations accelerate performance, build high-impact teams, and turn strategy into execution. As CEO of LSA Global, he works with leaders to get and stay aligned™ through research-backed strategy, culture, and talent solutions that produce measurable, business-critical results. See full bio.