Business leaders are faced with dozens of decisions that need to be made every day. As our organizations grow, the decisions generally become more frequent, more complicated, and have more serious ramifications. Sometimes it’s not about making the right decision, but just making a decision at all. The most successful entrepreneurs and business leaders in the world will tell you they have made many wrong decisions throughout the lifetime of their careers, but those failures always lead to valuable learning experiences, so above all, it’s important to find ways to make the tough decisions.
Business owners, executives and managers must master the ability to make good decisions quickly in order to keep the business moving forward. The best leaders, however, know when they need input from the team. Good leaders surround themselves with trusted advisors and subject matter experts, so that they can access a constant flow of data to make better decisions.
There are four basic decision-making styles that leaders can use:
Command: Command decision-making is where leaders make decisions without consulting their teams. This is an effective style, especially when things are moving quickly and the team is looking for immediate guidance. In a business setting, leaders use this style the most effectively on large financial decisions and in crisis situations.
Collaborative: Collaborative decision-making is just what it sounds like. Leaders gather their teams and request feedback and insight. The leader still makes the final call, but is armed with the proper data to make a more informed decision. This can also be referred to as evidence-based decision-making. With this style, and really in all business decisions, avoid surrounding yourself with people that always agree with you. You need people who are able to strongly argue the other side. Whether you use their advice or not, it will help clarify your decision.
Consensus: Consensus-based decision-making is done more like a democratic vote. Leaders gather their teams and everyone votes. Majority rules. This process can work well when the outcome of the decision affects the entire team, and generally won’t immediately affect the bottom line. In a quick-moving business environment, this is not the most efficient way to make a decision, but there are still some decisions that can be made this way. In a business, however, this type of decision-making can help mold the culture when the team is allowed to vote and have a voice. Just remember you generally can’t please everyone.
Convenience: When surrounded by trusted peers, sometimes the best decision a leader can make is to not be the one to make a certain decision. Complete delegation (convenience decision-making) has many benefits including measuring the decision-making abilities of your managers, empowering your team, and maintaining your own sanity! By handing over some decision-making responsibilities, leaders are also building a better management team and giving them the confidence they need as their responsibilities increase. And, convenience-based decision-making is a great way to avoid the decision trap of “we’ve always done it this way.” New decision makers take fresh approaches to solving problems.
How Good is Your Decision-Making?
Each decision presents its own challenges, and we all have different ways of approaching problems. So, how do you avoid making bad decisions – or leaving decisions to chance? You need a systematic approach to decision-making so that, no matter what type of decision you have to make, you can take decisions with confidence.
