BY ROBERT MANDEYA
Just recently at the King IV Corporate governance seminar I shared with some leaders the essence of crisis in every organisation. My take was that every crisis situation presents leaders with the opportunity to choose between two paths. Either to remain stuck in a system which is fast overtaken by events or to take the opportunity to improve our situation.
However, making sound decisions is a preserve of leaders who have clear leadership criteria. In the absence of a clear leadership culture in an organisation most leaders end up taking advantage of the absence of such standards to establish their own self-serving criteria for what effective leadership means.
I will contend here that measuring our leadership against ethical criteria is one sure way of assuring ourselves that we meet the universally accepted standards of effective leadership.
Making sound judgments and decisions is not a walk in the park. Most organisations are faced with serious dilemmas when it comes to making decisions. Here are some scenarios; Do you find that in your organisation it takes forever to make a decision? Do you face an environment where everyone feels like they need to be included in the decision-making process, and we can’t make a decision until everyone says yes?
Learning the art and science of business decision-making will certainly improve the quality of your decisions. In this installment I will explore the four styles of decision making—autocratic, participatory, democratic and consensual—and reveal which styles are best suited for specific situations. Recognising that ambiguity is a part of any decision-making process, I will also attempt to highlight the four types of ambiguities you’ll face so that you can recognise what you don’t know in order to reduce risk and plan for contingencies.
Firstly, it is important to realise that decision making is actually a process, and it’s the process of selecting a choice from a range of possible options, with the goal of achieving a very specific objective. Now contrast that with judgment. Judgment is the ability to form an opinion or reach a conclusion based on available information plus prior experience. So as you go to make a decision, there are some important principles to keep in mind. First, be clear about the objective. You need to understand what you are optimising for or trying to achieve as you make that particular decision.
Rationality does not always win
Oops! Did I just say that? In 1957, Herbert Simon laid the groundwork on the limits of rationality when he attacked classic economics and game theory. His work demonstrated the need to take into account the real world messiness and irrationality when making decisions.
Research indicates that people are myopic in their decisions, may lack skill in predicting their future tastes, and can be led to erroneous choices by fallible memory and incorrect evaluations of past experiences.
The research of neuroscientists also provides proof that, more often than we realise, our brains are influenced by subconscious emotional reactions from their more primitive centres. We are not in control of our rationality and reasoning as much as we would like to think
A framework for leadership judgment
It is important to realise that a judgment call should not be viewed as a single-point-in-time event. At some juncture, leaders do make the call, but this is only one moment in the middle of the judgment process.
The process begins when leaders recognise the need for a decision. They consequently frame and name the issue, align people and continue through successful execution.
Leaders are said to have good judgment when they repeatedly make calls that turn out well, largely because they have mastered a complex, constantly morphing process that unfolds in several dimensions. More often in our seminars we have often subjected leaders to some real decision-making scenarios and the experience has been amazing.
There is a decision-making flowchart that we usually make reference to in these sessions and again it has emerged that this works in certain situations whilst it does not work in others.
Some of our actions have taken an ethical twist. Here is what Norm Augustine says: “The toughest of all ethical cases is where you have two principles you strongly believe in, that appear to be absolutely in conflict: loyalty to a friend and a total repulsion, revulsion by the notion of spying, basically on a competitor in that fashion.” He concludes by saying: “The people who think they are helping by cheating end up hurting the company”
Making the decision
During a crisis, leaders must have clear values and know their ultimate goals. Crises handled poorly can lead to an institution’s demise. The first step in the decision-making process is clearly defining the decision you’re going to make.
There are some key questions you should be asking as you’re defining the decision. First, what’s the desired outcome? Is there a specific metric that you’re trying to drive? What are the choices that we’re trying to make? And, what are the possible choices that we can choose from? You need to articulate when do we have to decide? As well as thinking through, who is this decision going to affect? If you don’t go through these steps of defining the decision, you’re going to have unclear objectives.
Mandeya is a certified executive leadership coach, corporate education trainer and management consultant and founder of Leadership Institute of Research and Development (LiRD). — firstname.lastname@example.org/ or email@example.com, Facebook: @lirdzim and Mobile/WhatsApp: +263 719 466 925.