The former Prime Minister of India, Mr. Narasimha Rao, once famously said, “No decision is also a decision.”
He was right. At times it makes sense to avoid taking a stand on a diplomatically tricky issue, a matter that’s politically inconvenient, or where the outcomes of the decision are unclear or inconvenient to handle.
However, in the realm of corporate organizations, a conscious avoidance of dealing with the ‘forks in the road’ – that managers are paid to encounter and to deal with appropriately – won’t take them to positions of greater responsibility. Effective, timely and swift decision-making are essential qualities that capable managers consistently show evidence of. Accordingly, those who are seen to be decisive, have a greater chance of making it to the levels of upper management, especially as we deal with the complexities and the ambiguities of the 21st century.
Decision-making is obviously not confined to just corporate organizations. Every human-being makes decisions: from the very basic, mundane choices related to what we might eat or drink, to the more complicated ones on how best to invest our savings, each one of us uses our cognitive abilities to follow a path that gives us joy, value and a sense of fulfillment in the present.
Every role that we perform, as individuals or as members of teams, also relies on our decision-making abilities to reach desired outcomes. Airline pilots dealing with an engine-flameout, surgeons performing a risky operation, soldiers or army medics working in zones of conflict, all have to think on their feet. In many of these roles the data at hand are insufficient, and the time spans to make a decision are extremely short. Yet decisions have to be taken, since indecision can be disastrous.
Not all decisions yield the outcomes that we may have wished for, but that is precisely what makes being decisive an essential requirement for higher management.
In this piece I will be focusing only on decision-making situations that human managers and leaders – who work in the corporate setting – are exposed to and render. I will not be touching upon the rapidly growing area of Artificial Intelligence, and automated decision-making which are already changing the way machines ( including driverless vehicles, robots and sophisticated aircraft) are functioning.
I believe that humans will continue to play a dominant role in managerial decision-making (within corporations ) for some more time, and their ability therefore, to take effective, timely and swift decisions will play an increasingly important role in the fortunes of enterprises. Not only that, employees are enthused when they see their organizations responding swiftly to opportunities, and consciously avoiding current and future risks. Correspondingly, managerial and employee morale are adversely affected when an organization is perceived to be “slow” in decision-making, or unable to make timely decisions at the right levels.
As the conditions that firms operate in become more complex and uncertain, the need for agility in deciding where to go will become paramount. Employees, investors, vendors and other organizational stakeholders too will demand that organizations demonstrate that they have the ability to “respond flexibly” to rapidly changing conditions in the environment. Timely, effective and swift decision-making by decisive managers alone will ensure that enterprises move ahead on their chosen tracks with alacrity.
Factors that Affect Decisiveness in Organizations
I believe there are four key aspects that influence an organization’s managers and leaders to be decisive. These are:
The culture of an organization refers to the values and beliefs espoused by the organization that guide managerial action. Furthermore, the basic assumptions that underpin the way business is conducted in the organization, how uncertainty is approached, and how power is deployed and used to meet its goals, together frame the cultural and political context in which decisions get taken. Cultures are supportive of swift and effective decision-making when the values and beliefs are clearly written-down, and articulated as unambiguous guides to action – including in situations that are dynamic or changing. The guides could be in the form of protocols, procedures, or guidelines that are to be followed – without exception – even in complex circumstances. These “red lines” that are spelled out in the organization, would serve as the boundary conditions within which decision-makers would need to function. With time it would become second nature to take the ‘right’ call when the choice is to cross a red line or to stay within it.
If the protocols are subject to being violated or not followed consistently – especially by those in authority and who occasionally are known to cross the red lines – it can give rise to “decision-making paralysis” across the enterprise. Managers will try and second guess how the organization ‘actually’ wants them to act. Bits of information which might seem irrational or completely extraneous to the data needed for a sound or a rational decision, can also “crop up” and may be assigned far more emphasis than is needed.
The social architecture is the sum total of the culture, the systems, the processes and the principles that determine the manner in which an employee’s talents, perspectives and behaviour are put to use to achieve an organization’s goals. It also includes those determinants of executive action such as the organization-structure, the recognition reward and punishment systems, the measures of performance and career development, and the learning and development eco-system created to sharpen executive and managerial capabilities.
It is obvious that if effective and swift-decision-making are seen as a “positive precondition” within the organization then the social architecture will be supportive of it. People at the right levels will be encouraged to take decisions that pertain to the areas that they are accountable for. Managers and senior executives will be encouraged to take decisions and not avoid taking a stand. Since no executive can ever be a clairvoyant, some decisions might not turn out to be the best for the organization. Would the “social architecture” of the organization punish “errant” employees, or applaud them for their swift decision-making? In the latter situation the organization may also endeavour to learn from the failed decisions – making the system more resilient and robust in the process.
Smart enterprises rely more and more on business intelligence for effective decision-making. In this era of data mining, big data analyses, and real-time information collection from critical processes, there are vast amounts of data – and powerful analytical tools – available to help managers take informed decisions. The analytical tools are able to pick up trends that might readily be missed without the powerful computing processes that support useful analytics. This provides managers a “glimpse into the future” and would enable them to take decisions today, that could affect the trajectory of their firms in a salutary and beneficial manner.
However, not all enterprises have mastered the science and the expertise of making available the right information to the right levels in the organization. This impacts decisiveness adversely. Sound, and swift decision-making needs analytical support systems that use both qualitative and quantitative data to provide decision-makers with answers to their “what if” questions. Data also help to define trade-offs in terms of what’s valuable to the organization, eliminating certain branches of a potential decision, and saving valuable time and managerial resources.
Many managers consider themselves to be ‘intuitive’ decision-makers, and shun the use of data and information as an aid to their decision-making process. While intuition is a powerful cognitive process of knowing (as is relying on one’s feelings) the nature of decision-making today calls for even intuition to be backed and fully supported with information. Analytic support systems are a critical requirement for managerial decisiveness.
Despite the enormous advances made in the development of Artificial Intelligence and machine learning, humans will continue to play the role of ‘decision-maker’ when it comes to making complex decisions in enterprises. Unlike machines, each one of us is “programmed” differently and we all bring our unique capabilities, biases and preferences to the workplace. Decision-making will thus depend on the competence and the cognitive abilities of managers. To be effective and swift in making the right calls therefore, the quality of an individual’s cognitive processes and capabilities need to be well above average. More about what we can do about this, is shared in the following section.
Making Managers Decisive
Organizations that are keen to be in the forefront of being able to make the most of opportunities, and lead the pack in their chosen industry will consciously need to willfully cultivate the capabilities of decisiveness in their managers. Not only that, they will also need to work on the remaining three factors ( enunciated above ) and create conditions where appropriate and effective decision-making becomes the hallmark of all key personnel in the organization.
Here are the specific skills and cognitive elements that the enterprise will need to cultivate in its managers. The aim of any intervention aimed at making people decisive is to enable them to take responsibility, and be accountable for, whatever role they might be in –even if the social architecture and other elements do not always encourage such an orientation.
Typically entrepreneurial thinking is associated with being able to completely “short-circuit” and do away with bureaucratic thinking. Bureaucratic thinking, in turn, is characterized by employees and managers involved in tardy decision-making, seeking approvals from “higher management” and a general uncertainty about how to deal with any forks in the road. Most leaders want their people to be empowered and decisive, but if a person’s own choices – along with the social architecture – make a person vulnerable to the “ways of the firm” and create a sense of helplessness, the organization will not show evidence of effective or swift decision-making.
Cultivating entrepreneurial thinking requires managers to be empowered. They need to be encouraged to make personal choices, where their roles and responsibilities in the organization are shown to have a direct bearing on the fortunes of the department, the division or the processes that they are accountable for. Too often this important connection is overlooked during a delegation of authority, where someone who is responsible for an outcome, may not have the authority to take a decision because the culture, the politics or the social architecture just do not enable it. To that extent, there has to be a conscious alignment of the Principles, the Performance Metrics and the Actions of managers, so that swift and timely decision-making is recognized and appreciated.
Often managers flounder in their ability to take effective decisions swiftly and appropriately on account of “ethical confusion”. Ethical confusion is the result of having ulterior motives that are not aligned with the best interests of the enterprise, or being uncertain about what sources of value the enterprise truly wishes to leverage. Often such motives might also hasten the decision-making process to unprecedented levels, dispensing with the essential due diligence that comes from thinking through the decision.
Helping managers work ethically – and take the right decisions in a proper manner – is a critical requirement for enhancing the efficacy of decision-making. Having clear and unambiguously communicated red-lines and boundary conditions are essential too, but if those are in place, the need for compliance has to be inculcated. This can be achieved through regular training and development interventions, using case studies to enhance the use of decision-making skills even in ethically complex situations, and monitoring the performance of managers regularly so as to help them iron out “wrinkles” in their abilities.
iii. Eliminating Biases
Our judgments are a function of our upbringing, our life-experiences as well as the way our brains are “wired”. All of us have biases that can adversely affect our decision-making. Decision traps are pitfalls that we do not notice, and hence fall into, because our minds force us not to look in their direction carefully enough. Diminished emotional intelligence capabilities accentuate our biases, and can cloud good decision-making abilities. A lack of awareness of the conditions underlying the data on which we are to base our decision, can also affect our judgment.
Many of these internal “judgment flaws” affect the quality of our decisions. Many times the outcome of the decision occurs after a lag of a few years and flawed-decisions are not traceable to one person or committee. Yet, poor judgment calls are a cause of bad decisions and economic losses, and need to be consciously eliminated through suitable interventions.
Organizations thrive and continue to create value for their stakeholders, when they operate decisively and with alacrity. Timely, effective and swift decision-making skills therefore are an essential pre-requisite for business leaders in the 21st century. Successful companies will need to put in place the factors that lead to the efficacy of decisions of executives, even as managers are systematically trained in the essential elements of deploying sound judgment.
© Bharat Wakhlu, 2017. Based on sections of the author’s books, “Total Quality” and “Navigating the Maze”.