The CEO’s Guide: Increase Profitability Through Critical Decision Making
The challenge of the modern executive is not only how to make the best business decision possible, but also how to communicate that message in the most expedient and effective way possible. Unlike the days of old, when executives could ponder the problem for a while before making an official announcement of their decision, today’s leaders must execute critical decisions in real time. So how do you, as a leader, go about this decision making process? How can you execute a decision while also leading people at the same time?
“The first step is understanding your personal decision-making comfort level. What is your leadership style? Do you believe in a top- down, hierarchical system, or one of collaboration, regardless of position? Do you prefer to empower others to make sound decisions, or do you believe in a stronger sense of oversight? No one strategy is better or worse than another, but the key is to acknowledge your own style and play to your strengths. If you attempt to apply a strategy that is not consistent with your personal comfort level, then your employees will inevitably question you and your leadership decisions.
Second, you need to assess the internal process for how your organization will make decisions. Long gone are the Looney Tunes days when you shift your papers from the in- to the out-pile. Now you must separate and define your processes for non-critical and highly- critical decisions. For example, you must create a “sandbox” for how you make the day- to-day tactical choices. If your daily sales meeting requires you to decide which leads to pursue first, you could ask your salespeople to assemble reports on which potential clients called, accessed the website, downloaded a whitepaper, etc.
For a very strategic decision that could have a major impact on the organization, however, you should build a business case outline template in an executive summary format. In this report, you’ll collect all necessary data on how the decision aligns with your company’s priorities, both short- and long- term. You’ll analyze the direct and indirect costs of the decision; the benefits and risks; the success measures and opportunity losses; and the best timing to execute the decision. By researching and uncovering all the data available, you will find yourself able to make a more informed — and likely more successful — decision.
Now you must separate and define your processes for non-critical and highly- critical decisions. For example, you must create a “sandbox” for how you make the day- to-day tactical choices. If your daily sales meeting requires you to decide which leads to pursue first, you could ask your salespeople to assemble reports on which potential clients called, accessed the website, downloaded a whitepaper, etc.
The most difficult part of the process, in turn, is crafting and defining your decision to your organization. It’s no longer possible to make a decision without transparency and support within your organization. Try using a “town-hall forum” to share your decision with your employees. Not only does this provide them an opportunity to ask questions and better understand your thought processes, but it also guarantees that all of your employees hear the same information at the same time. You might also establish “lunch-and-learn” sessions with your departmental managers so you can discuss the decision-making process for your organization. Listen to their feedback and allow them to invest themselves further in both the decision and the decision process.
Lastly, you must, must, must plan “decision check-ups” during your monthly or quarterly review meetings. This piece of the puzzle is all too often forgotten or ignored. You should evaluate your decisions on a report card, grading yourself on how the company is doing, what is/isn’t working, what returns the organization is receiving, and how responsible were other team members for making the plan a success. This will allow you to give credit where credit is due, and also help you uncover the success and failures of your method. You’ll be able to reinvent your decision-making process, discovering which employees offer the best insight and execution and which part of the process needs the most refining.
There is no single way to make a good decision, but there is a process that will give you the opportunity to make them more often and more consistently. If you follow a checklist about your own leadership style, your strategic decision process, your executive communication strategy, and your ability to review your decisions again and again, your organization will avoid financial failure and internal strife. Good decisions can be hard to make, but with a good process bad decisions can be easy to avoid.
Teresa Spangler is on Twitter by @composerspang or follow @plazabridge. Teresa is the author of the Game of Life Book Series, A contributing author to OpenForum. You Click to learn more about Plazabridge Group.