Hundreds of books have been written about leadership and high-performance teams, but rarely do they adequately address the art of great decision-making. But one very important aspect of governance for teams and organizations is decision rights.
Who gets to decide what? Where is shared decision-making required for success?
Almost every team we engage falls short in this area – on how a group of senior leaders (typically composed of 10‒15 people) refines the traits and discipline that lead to great decision-making for their organization.
Possibly the most important aspect for any senior team to align on is the level of risk that’s appropriate. It’s essential to balance the need to make fact-based decisions with the urgency to act. A key part of this balance requires agreeing on the appropriate risk level. If you wait until you have 100% of the data to make a decision, you’ll miss the window of opportunity, and the decision will make itself.
Align with your team on the level of confidence you desire. Don’t wait for everything to be perfect before you make a decision. Many teams establish a risk by saying, “We want a 66% level of confidence – and then we’ll accept the risk associated with that ratio of knowing-to-not-knowing.” In many cases, the key isn’t to be perfect but to firmly move forward – and then to learn from that decision sooner rather than later.
Roman statesman and philosopher Marcus Cicero said it well: “More is lost by indecision than by making the wrong decision. Yes, the wrong decision is better than indecision.”
The biggest issues teams face when making great decisions include:
- A lack of clarity and alignment on what decisions should be made by a team. Senior teams often lack clarity what decisions should belong to their team and what decisions should be sent back to lower levels of the organization.
- Knowing what the team is solving for. This question is often weakly assumed and not robustly challenged. Ask, “What exactly we are solving for?” and “Is it the right question?”
- Understanding fact bases and risk level. Teams sometimes rely on opinions rather than facts, and facts can be overwhelming. Ask for up to six fact stories that need to be considered to make this decision. In many cases, teams making key decisions are drowning in information and starving for perspective. What are the six fact stories that create that perspective?
- Finding alignment on accepted risk. What facts are needed? What level of risk are you comfortable with to make this decision as you balance the need to know with the need to act with urgency?
- Identifying top alternatives. Describe all the possible strategic alternatives with brief descriptions of the strengths and weaknesses of each alternative. Make sure the decision process doesn’t become a lobbying process for a decision that has been chosen before truly considering all possible options.
- Asking clarifying questions only. With your team, go around the table. Have each person ask only clarifying questions to understand the problem they’re solving, the facts, the alternatives, and the implications. Withhold observations, recommendations, or comments. The team will learn the most from listening to each other’s questions.
- Making recommendations and decisions. Each team member should share their concerns and their recommendations for reaching the best decision. The decision-maker who brings the decision to the group should summarize what they heard and be clear on the decision based on the recommendations. Rarely does a vote need to be taken in this situation, as the wisdom typically comes out in an aligned and clear fashion.
Great decision-making requires aligning on risk, following a rigorous process, and ensuring that the wisdom of the entire team is equally considered and utilized in making the final decision.