Decision Making Amidst ComplexityAugust 27, 2014
Decisiveness has always been seen as one of the key attributes of a successful leader. Boards and organizations expect the ability to process information, see the forest for the trees, and set a clear course of action. Everything the CEO does affects the entire business. But in a world that is changing faster than ever, and with greater volatility, how does the leader of today demonstrate decisiveness? Based on feedback from our clients, senior leaders today face five recurring themes as they approach efficient decision-making in the face of shifting complexity.
Challenge insular thinking with a fresh perspective. Over time, many companies develop insular environments which come to rely heavily on input from people within the organization and tend to resist accepting new or foreign ideas. However, today’s operating environment of constant change forces a need to consider the world from new angles. What happens when you challenge insular thinking with an outsider perspective? The opportunity to drive true innovation. The inverse of this is true as well, of course — refusal to consider external perspectives has brought more than one multinational to its knees over the past five years. But if a challenged organization can examine the decisions they face through an intentionally different (and broader) lens, solutions evolve that have not previously made it to the table. This is not about scrapping proven innovation processes — too many consultants with no operational experience are advocating today for throwing entire systems in pursuit of the new and shiny. But established companies are driving innovation with renewed vigor by applying proven approaches to decision making but incorporating entirely new contexts.
Involve a number of different people in the decision making process. The science of the last several years has made it clear that the collective intelligence of a team adds up to be more than the individual IQs of its members. At Merryck & Co, we encourage a focus on the cohesive high-performing team as well as high-performing leaders to improve organizational judgment as a whole. It’s important that senior executives and top leaders recognize — as an operating reality, not merely as a point of logic — that they might not have all the answers. Organizations benefit from including multiple people in the decision making process.
In the face of ubiquitous data flows, avoid the temptation to find the “right” answer. As leaders and as humans, we make many of our everyday decisions using heuristics or simple rules of thumb. This saves the brain from working too hard on common or straightforward decisions, but complex problems present another challenge. This has always been true for leaders, and some leaders have failed over the desire for “one more piece” of data that would seal their decision. Today, decision-making problems increasingly arise because there is so much data being updated by the second that it can be difficult to find fixed points to base a decision on. (Not to mention that waiting to collect all the possible inputs is self-defeating as the information continuously changes.) The complex nature of most business challenges means there is almost always more than one “good” solution to a problem. In that environment, looking for the perfect answer can become a trap for a leader. In contrast, a good decision executed well is better than a great decision delivered too late or not seen through at all.
Be agile. The pace and pressure of business life today results in higher levels of stress, and it is well known that stress can reduce our cognitive capabilities, especially when it comes to making important decisions. This stress can also inhibit the leader from functioning at the highest level of reciprocity, which can then have adverse effects on his team and organization as a whole. Finding a happy course between overconfidence (caused by the illusion of knowledge) and paralysis (caused by over-analysis) is no easy task. Yet the responsibility of the leader remains. This is the new reality of ever-changing industries. If circumstances change, plans may need to change too. Purpose, values, and goals should be constant but the route to get to the end result may change along the way.
Be authentic. The days of the “hero” leader are long gone. Genuine curiosity, a collaborative approach, and the ability to embrace ambiguity are more important attributes for the leaders of tomorrow. It isn’t easy to lead in volatile and changing times. The secret is to embrace the uncertainty and create an organization that is agile enough to adapt.
For further insight on the subject, Daniel Kahneman’s book, Thinking, Fast and Slow, is a must read. Click the link to view our recent blog: Why Your Merger Failed, or check back for more on business leadership and senior team effectiveness.
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