Making Good Decisions as a Leader
Making sound decisions stands as the single most important responsibility of a leader.
Your words mobilize resources, and it’s crucial to ensure that you’re steering in the right direction. Not only must you mobilize resources effectively, but also your ability to make sound decisions is critical for earning the trust of those you lead.
Decision-making involves multiple layers and dimensions.
Framework for Decision-Making
Today, I’ll walk you through the framework I use for making decisions. I am continually learning and refining this approach. Here are the specific questions I assess:
- Is it the right thing to do?
- Is it doable?
- How do we do it?
- Who should do it?
Is It the Right Thing to Do?
Determining whether something is the “right thing” to do involves several aspects:
Moral Considerations
Is this decision morally sound?
This may seem irrelevant to business but I would argue it is critical to building trust and trust is foundation of effective leadership.
In fact, John Maxwell has this as Law #6: The Law of Solid Ground within his book 21 Irrefutable Laws of Leadership. John states that “Character and good values make trust possible. And trust makes leadership possible. That is the Law of Solid Ground.”
“Character and good values make trust possible. And trust makes leadership possible. That is the Law of Solid Ground.”
– John Maxwell, The 21 Irrefutable Laws of Leadership
Consistently making immoral decisions can erode trust and drive away those with a strong moral compass. Eventually, you are left with employees with weak moral compasses. Are those really people you can trust?
Leading immorally is a losing strategy.
Focus
When my wife suggested we check out a Nespresso machine, I was pretty skeptical. I thought it’d be a waste of money, but I agreed to go with her anyway.
We walked into the Nespresso store, and the salesperson started showing us how the machine works. Apparently, each coffee pod has a barcode that the machine scans to brew the coffee just right. I was genuinely impressed by how smart and precise the whole system was.
Curious, I asked the salesperson if Nespresso developed this tech themselves. He said, “Nope, we outsource the tech because we’re all about coffee.” I was really impressed by their focus. They know what they’re good at and stick to it, which made me trust that their coffee quality would be top-notch.
How often do we see companies that try to branch out but end up messing up their original products and the new ones? Nespresso’s approach showed they really know their stuff and stay focused on what they do best.
At some point, a Nespresso leader had to ensure that every decision stayed true to the company’s vision and focus, steering clear of distractions and hype.
This is key to making a great company. Knowing when to say ‘Not yet’ and using metrics to reevaluate is essential to maintaining that focus.
This is a key tenant within James Collin’s classic Good to Great.
“Enduring great companies preserve their core values and purpose while their business strategies and operating practices endlessly adapt to a changing world. This is the magical combination of ‘preserve the core and stimulate progress.’”
– James C. Collins, Good to Great: Why Some Companies Make the Leap…And Others Don’t
Knowing what the core business is enables a laser focus on not only direction but also when to incorporate new technology and practices.
Is It Doable?
After establishing that this is the right direction, the next step in making a good decision is to assess its feasibility:
Resource Availability: Do you have the capital, expertise, and technology necessary to support this effort? Evaluate whether you need to reallocate resources from other projects.
Feasibility Assessment: Especially when there is technology involved it is critical you consult with your technical leaders to determine if the effort is feasible. Assess whether similar efforts have been done in your industry and understand the risks involved.
How Do We Do It?
Once confirmed that the decision is the right one and feasible, dive into the tactical aspects:
Options and Trade-offs: Engage those who will implement the solution to explore different options. Understand the trade-offs related to:
- Timeline: When can we complete this?
- Scope: What is the total amount of work involved?
- Cost: How many people and resources are required?
Economic principles teach us that trade-offs are inevitable. Given limited resources, optimizing two out of three constraints—timeline, scope, and cost—is often necessary.
In tech, my role in technical product management focuses on defining the ‘why’ and ‘what,’ which sets the scope.
Then I collaborate with software architects, who establish technical constraints to align with our architectural strategy and avoid duplicating work. The principal engineer or technical lead assesses implementation details. Together, they determine the effort or ‘cost’.
From there, we discuss timelines and negotiate by adjusting the scope, resources, or timeline as needed.
This is where having a clear focus is critical for leaders to make good decisions and determine appropriate priorities.
Who Should Do It?
With the strategic and tactical aspects clear, determine who will execute the work:
Expertise and Coordination: Assign a leader with the necessary expertise or the ability to quickly gain it. Focus on putting your best people on your greatest opportunities, not just your biggest problems.
Internal vs. External Hiring: If internal skills are lacking, consider external hires. However, they might lack company context. Ideally, pair an external expert with someone who understands the company and maintains a growth mindset.
Few things are as demoralizing as working with someone who constantly says, “We tried that 5 years ago, and it didn’t work.”
See how details on how to navigate “We tried but it didn’t work.”
Conclusion
Decision-making is an evolving process where strategic considerations should remain stable, while tactical decisions may shift more frequently.
When you make a decision, document the key reasons behind it and the conditions that might prompt a reassessment. This practice is essential in a fast-changing business environment. Without a clear understanding of what would trigger a change, adapting to new circumstances becomes challenging.
Moreover, transparency in your decision-making fosters trust. When you clearly articulate why a decision was made, others can provide valuable input, and if circumstances change, you’ll be better positioned to pivot effectively and in a timely manner.