Decision Making
Decision Making
Decision Making
Icebreaker – - Your style of Influence card - Which picture card talks about your
Influencing Style
Life is made up of countless decisions. Some have major consequences, others not so much; some are
simple, others are frightfully complex. In the business world, decision-making mechanisms have been
studied extensively and we are now beginning to get a clearer idea of best practices in this domain.
Suited to stable environments, these be st practices are often based on the assumption that the
decision-maker possesses a decent amount of information on the situation. However, in uncertain
situations, information is scarce. How can we make decisions without sufficient data or points of
reference?
Grid Activity –
Leaders are faced with many challenges, but one of the most important is making
timely decisions. In a rapidly changing world, leaders need to make decisions quickly
and efficiently to maintain a competitive edge. But, of course, this is easier said than
done. Leaders need to balance the need for speed with careful planning. If they move
too quickly, they may make careless mistakes. If they move too slowly, they may miss
opportunities. Instead, leaders must find a happy medium between these two extremes
to succeed. By making decisions promptly, leaders can keep their organizations
moving forward and stay one step ahead of the competition.
Context setting –
“It is often said that a wrong decision taken at the right time
is better than a right decision taken at the wrong time.”
When you think about it, your day is a continuous cycle of choices and decisions.
In fact, research tells us that the average person makes an estimated 35,000 decisions
every day!
Before we dive in, let’s reflect on some of the reasons that cause indecision,
procrastination, poor and delayed decision-making.
Flip chart & sticky notes exercise:
• Ask participants to write on the wall, the skills for effective & efficient
decisions & barriers (reasons that cause indecision, procrastination, poor and
delayed decision-making.)
Understanding the causes is the first step to nipping them in the bud, conquering
them and changing our mindset about how we approach decision-making.
Barriers – have these sticky notes handy
Lack of confidence
Lack of information
Conflict with personal values
Too much info
Outcome of the decision is unknown
Fast paced change
Decision fatigue
Decision in a lose-lose situation
1 flip chart
How Do Poor Leadership Decisions Happen?
(reasons that cause indecision, procrastination, poor and delayed decision-making)
Recognise which decisions require more thorough consideration and which can be made
with less information and analysis.
Take care in separating facts from opinions, and consider both to the appropriate degrees.
For more complex decisions, take an appropriate amount of time to gather and analyse as
much relevant information as possible to use in forming a conclusion.
Evaluate options, and make sure you understand the reasons why some are better than
others.
Accept the need to make some decisions in circumstances where information is lacking or
vague.
Ask for suggestions, advice, guidance, or other support from experienced people.
Use side-by-side evaluation of the pros and cons of the strongest-seeming options.
Clearly define the problem and the predictable effects of your decision for all
stakeholders.
Analyse and interpret relevant data and information (such as in available tables, charts,
graphs, etc.) in your evaluation of options.
Identify reasonable alternatives and possible acceptable compromises.
Keep in mind that others’ strong opinions are not foregone conclusions. Listen carefully,
but use your own decision process.
Learn from mistakes, failures, and successes of others in previous similar decisions.
Identify critical peripheral factors that could compound the consequences of a decision.
Consider the possible advantages in not acting at all, of delaying making a decision to a
later date, either to let a situation resolve itself or to wait till more information can be
obtained.
Escalate thorny decisions for collaboration with, guidance from, or deferral to higher
authorities.
Engage stakeholders in your decision-making process. Collect as much input as feasible,
in cases in which decisions will have significant impacts on employees, investors, and
other stakeholders.
Expect disagreement, due to varying levels of consideration given to facts and options
during collaborative decision-making processes.
Factor in your intuitions about the choices you think are most and least likely to lead to
the best outcomes.
Ask what’s wrong with the option that makes the most sense to you, and what you may be
overlooking in your thought process.
Make sure every decision you make is within the boundaries of your own ethical
principles. Ensure your boundaries align with your organisation’s ethics.
Accept that every decision you make bears the risk of being wrong, and do not allow that
reality to intimidate you into indecisiveness
Say this, after the activity - The important thing is to recognise which of the above
obstacles or combination of them is impeding your ability to make a certain decision
at any given time. You can
then use the relevant strategy required to overcome it.
Recognising where your weak points lie with decision-making must be followed
up with developing an efficient decision-making mindset.
Actor-observer bias: This is the tendency to attribute your own actions to external
causes while attributing other people's behaviors to internal causes. For example, you attribute
your high cholesterol level to genetics while you consider others to have a high level due to
poor diet and lack of exercise.
Anchoring bias: This is the tendency to rely too heavily on the very first piece of information
you learn. For example, if you learn the average price for a car is a certain value, you will
think any amount below that is a good deal, perhaps not searching for better deals. You can
use this bias to set the expectations of others by putting the first information on the table for
consideration.
Attentional bias: This is the tendency to pay attention to some things while simultaneously
ignoring others. For example, when making a decision on which car to buy, you may pay
attention to the look and feel of the exterior and interior, but ignore the safety record and gas
mileage.
Availability heuristic: This is placing greater value on information that comes to your mind
quickly. You give greater credence to this information and tend to overestimate the probability
and likelihood of similar things happening in the future.
Confirmation bias: This is favoring information that conforms to your existing beliefs and
discounting evidence that does not conform.
False consensus effect: This is the tendency to overestimate how much other people agree
with you.
Functional fixedness: This is the tendency to see objects as only working in a particular way.
For example, if you don't have a hammer, you never consider that a big wrench can also be
used to drive a nail into the wall. You may think you don't need thumbtacks because you have
no corkboard on which to tack things, but not consider their other uses. This could extend to
people's functions, such as not realizing a personal assistant has skills to be in a leadership
role.
Halo effect: Your overall impression of a person influences how you feel and think about
their character. This especially applies to physical attractiveness influencing how you rate
their other qualities.
Misinformation effect: This is the tendency for post-event information to interfere with the
memory of the original event. It is easy to have your memory influenced by what you hear
about the event from others. Knowledge of this effect has led to a mistrust of eyewitness
information.
Optimism bias: This bias leads you to believe that you are less likely to suffer from
misfortune and more likely to attain success than your peers.
Self-serving bias: This is the tendency to blame external forces when bad things happen and
give yourself credit when good things happen. For example, when you win a poker hand it is
due to your skill at reading the other players and knowing the odds, while when you lose it is
due to getting dealt a poor hand.
The Dunning-Kruger effect: This is when people who believe that they are smarter and
more capable than they really are. For example, when they can't recognize their own
incompetence.
Halo effect—The tendency to think everything about a person is good because you like that person.
Reactive Decisions
In contrast, reactive decisions are based on what has happened in
the past, or what is currently happening in the business. These
decisions might be based on a review of financial statements,
current operating problems, or customer and employee feedback.
Many times, these are "knee-jerk" reactions to counter some type of
problem that surfaces.
In every business, there are always opportunities for improvement and growth. The
challenge lies in determining the right time to make decisions that will enhance
operational efficiency and lay the foundation for sustainable growth. Businesses
often face critical decisions: should they anticipate the future and act now, should
they act when problems arise, or wait until their competition gains an upper hand in
the market, etc.? It's essential to take proactive measures before becoming a weaker
competitor and falling behind. By anticipating challenges and making strategic
choices ahead of time, businesses can stay competitive and maintain their foothold
in the marketplace. Waiting until it's too late can be detrimental to a company's
success. It is prudent to make the right decisions now, stay ahead of the competition,
and secure the business’s position as a strong contender in the market.
Same goes for the uncertainty that you encounter when making decisions. What is normally a
seamless choice process, uncertain decisions are inherently more effortful. That in turn clouds your
judgement and slows down your ability to think clearly.
You feel like you don’t have control → You get anxious about lacking control → Anxiety clouds your
judgement → Your decision making is impaired → you feel like you don’t have control → and on
and on it goes. It’s
a vicious cycle that starts with the feeling of not having control;
the emphasis here being on feeling.
A key point to applying the CB decision making model is that feelings of
control are necessary for effective decision making.
Conflict Management
Highball/Lowball: This strategy involves one party making an initial offer that is
much higher (or lower) than what they are actually willing to accept. When done
correctly, this may result in the other party making a counteroffer that is closer to
the initial offer than they would have otherwise. An extreme example would be
offering $1,000 for a brand new pick-up truck when the real value is closer to
$30,000.
Bogey: This tactic involves one party pretending to be interested in something that is
not actually their main concern. This can be used to distract the other party from the
real issue at stake and force them into making concessions.
Snowballing: Snowballing is a negotiating tactic of presenting the other side with an
overwhelming amount of data and information in an attempt to obscure the real
issue at stake. This tactic is often used to exhaust the other party and pressure them
into making concessions they would not otherwise make.
Good Cop/Bad Cop: In this tactic, one party takes on the role of the "good cop" while
the other takes on the role of the "bad cop." The good cop is typically more
reasonable and understanding, while the bad cop is more forceful and demanding.
This tactic can be used to create tension between the parties and pressure the other
side into making concessions.
Take-it-or-leave-it: This tactic involves one party making a final offer that the other
party must accept or reject. This can be an effective way to pressure the other side
into making concessions but also often leads to an impasse when the offer is not
reasonable.
Situational Leadershiip
All of this may sound a little complex, but to help clear things up, we have put
together six examples of situational leadership to illustrate how this strategy
works in the real world.
Instead, the book argued that assessing the leader’s personal characteristics
alongside the capabilities of the team was essential. While there is some
intricate classification used by Blanchard and Hershey to determine when
different styles were most appropriate, it comes down to leaders choosing
between four basic management styles. These are:
Telling: The most autocratic of the styles, this works best when a manager
needs to get the best results from a group with a lesser skill set. Commonly
seen in military situations, telling helps leaders with more experience to
manage new team members.
With some idea of how situational leadership works, let’s view some examples
of how real-time leaders have used these strategies in the past.
Jobs’ famous product launches were not only a way to get consumers excited
about new products. The launches were also a method for Jobs to sell his
vision to employees. Jobs had a unique way of motivating teams to pursue
ideas that were unpopular internally, despite the massive success they would
eventually meet.
He was also capable of using a delegative approach to leadership. Jobs
wanted to hire the best people in areas he was not necessarily familiar with.
He did this with the hope that they would be able to create success even
without his direct intervention, as with his massive success in founding the
Pixar movie studio.
2) Colin Powell
The former United States Secretary of State and four-star general had an
exceptional career in which he interacted with a vast variety of leaders
including Richard Nixon and Mikhail Gorbachev. Throughout that career, he
worked with a wide variety of teams, from units of soldiers to teams of
statesmen.
In an interview with Forbes, Colin Powell stated that situational leadership was
the key to managing different teams. He elaborated, saying ‘I adjust my style,
within limits, to the strengths and weaknesses of my subordinates so that I
understand what they can and can’t do.’
3) Phil Jackson
As the most successful coach in NBA history, Phil Jackson has won 11
championships. The successful teams he led included international superstars
including Michael Jordan, Shaquille O’Neal, and Kobe Bryant.
However, this idea is not entirely accurate. Patton was not only a successful
military leader but an excellent analyst who produced several essays on war
strategy and leadership. The most important idea which derived from these
papers, and one that would form a foundation of military readiness in the
coming decades, was that to win a conflict an organisation must always
analyse a situation and adapt.
Patton applied this approach to his leadership style, embodying many of the
most important principles of situational leadership. Some of his most important
pieces of advice were to use cooperation and collaboration to lead a team,
earn the teams trust by positive motivation and to always be flexible with
different groups.
5) John Wooden
Another excellent example of the value of situational leadership comes again
from the sports world. This time, the arena is college-level basketball. During
his time as head coach of UCLA, John Wooden won ten championships.
Seven of those championships were consecutive, the longest winning streak
in NCAA history.
To lead his team at the high level of success that Wooden achieved, he
needed to constantly evaluate how his team worked together. He identified not
only the most successful players but also how the weaker ones needed his
support. This leadership, and the success it brought the team, was only
possible through a situational approach.
6) Jack Stahl
As the president of Coca-Cola from 1978 to 2000, Jack Stahl was tasked with
leading a successful organisation and ensuring that it stayed at the top. In an
interview discussing his leadership priorities, Stahl said that he viewed the
best leaders as situational, able to approach a circumstance and determine
the level of involvement needed from them.
Stahl says that he learned this from an issue that occurred early in his career.
Asked to prepare a prospectus for a public offering, Stahl delegated the
project without correctly determining the amount of oversight needed. The
project failed, and Stahl realised that he needed to know when to dive in and
lead.
The new global economy and the diverse workforce that comes along with it
means that organisational requirements are different in every environment.
Developing the ability to modify your leadership approach to specific
challenges is an important strength in today’s complex business world.
Decision-making styles refer to the individual approaches and preferences people have when
faced with choices or problems. Different decision-making styles can be influenced by
personality, experience, and situational factors. Here are some common decision-making
styles:
1. Autocratic Decision-Making:
Description: The decision is made by a single individual without consulting
others.
Appropriate Situations: Urgent decisions, when a leader has superior
knowledge or expertise, or in hierarchical structures.
2. Democratic Decision-Making:
Description: Group members participate in the decision-making process,
often through discussions and voting.
Appropriate Situations: When diverse perspectives are needed, fostering
team collaboration, or when the decision affects the entire group.
3. Consensus Decision-Making:
Description: Group members work together to reach an agreement that
everyone can support.
Appropriate Situations: Important decisions that require buy-in from all
team members, building unity, or when the decision impacts the entire team.
4. Intuitive Decision-Making:
Description: Decisions are made based on gut feelings, instincts, or intuition,
often without a formal analysis.
Appropriate Situations: When time is limited, for routine decisions, or when
individuals have significant experience in a particular area.
5. Analytical Decision-Making:
Description: Decisions are made after careful analysis of information, data,
and potential outcomes.
Appropriate Situations: Complex problems, situations where accuracy is
crucial, or when the decision requires a thorough examination.
6. Directive Decision-Making:
Description: Decisions are made quickly and efficiently, with a focus on the
most critical aspects.
Appropriate Situations: Crisis situations, when there is limited time for in-
depth analysis, or when a leader needs to take charge decisively.
7. Collaborative Decision-Making:
Description: Individuals work together to make decisions, leveraging the
strengths and expertise of each team member.
Appropriate Situations: Cross-functional projects, when diverse skills are
needed, or to encourage shared responsibility.
8. Avoidant Decision-Making:
Description: Postponing decisions or avoiding making choices altogether.
Appropriate Situations: When more time is needed for information
gathering, when the decision is not urgent, or when there is uncertainty.
9. Hierarchical Decision-Making:
Description: Decisions are made by individuals at the top of the
organizational hierarchy.
Appropriate Situations: In highly structured organizations, when a clear
chain of command is required, or for strategic decisions.
10. Emotional Decision-Making:
Description: Decisions are influenced by emotions, feelings, or personal
values.
Appropriate Situations: When decisions have a significant personal impact,
for ethical considerations, or when dealing with interpersonal relationships.
It's important to note that individuals may exhibit a combination of these decision-making
styles, and their preferences may vary depending on the context and the specific decision at
hand. Effective leaders often adapt their decision-making style based on the situation and the
needs of their team or organization.