Better Decision Making at Executive Level
21 May 2021
The primary role of an executive is making decisions.
A single day sees most executives arrive at several resolutions regarding:
- Information exchange
- Innovation and creation of ideas
- Data review
- Evaluating alternatives
- Implementation of directives
Decision-making can be challenging at an executive level.
Styles of Decision-Making
There are two fundamental ways in which decision styles differ:
- How you use information: Some managers analyse reams of data before they make a final decision. The outcome is a well-informed decision. However, it is not overly efficient because it consumes a lot of time.
- How you come up with options: Managers believe in undertaking one course of action, while their colleagues design several lists of possible options.
The above dimensions give birth to four styles of decision-making:
Managers who uphold this style value:
Once they roll out a plan of action, they adhere to it and swiftly move on to another issue. The executive values loyalty, honesty, clarity, and brevity when dealing with other individuals. Time is of the essence in this mode.
The executive does not rush to make a decision. He/she analyses large bulks of information and expects maximum contribution from others. They challenge the analysis, resolve, and views of others. The decision-maker believes that decisions should hold out against the test of time.
Flexible style upholds speed but puts more emphasis on adaptability. If a problem arises, an executive who uses this mode gets sufficient data that helps him decide on an ideal solution. He or she can change course if necessary.
Decision-makers who use this mode weigh up several options before deciding on the best solution. They frame any incident broadly and analyse the various elements that may lead to the overlapping of related situations.
Decisions here are broadly defined and incorporate multiple courses of action. They work with others, regardless of the various viewpoints, before making a valued decision. Decision-making in this mode tends to be a process, not a timed event.
Crucial Keys to Executive Decision Making
Individual executives may have their decision-making techniques. However, there five crucial universal keys to this. They include:
1. Understand the Problem
The most significant decisions made by executives always begin when a large problem arises. For example, your company may be experiencing a sharp drop in market shares. Or some of the employees are complaining about the working conditions.
When such situations emerge, knowing that the problem exists can never be enough. You need to dedicate your time and understand why the issue exists and evaluate the repercussions if you fail to resolve the matter. You can only make a decision if you comprehend the underlying factors that prompted the issue.
2. Involve the Right People
More often than not, the decisions you make at the executive level directly or indirectly affect a majority in your organisation. Before you make the ultimate decision, call for a meeting involving all the leaders in the various departments. Inform them about the solutions you are about to roll out and listen to their feedback.
Feedback is crucial because you will know some of the areas in your solutions package to change. Additionally, you make the decision knowing that every department in your company is satisfied.
3. Information Gathering
You might have robust knowledge about your company, but always remember that comprehension has no limits. Explore and learn.
- How your company resolved similar issues in the past
- Effective and ineffective solutions
- Steps that other stakeholders in the company have taken to reach an amicable solution
- Costs associated with proposed solutions
- Associated risks
Quality information helps better your ability to make effective executive decisions.
4. Align Goals
Everyone is tempted to resolve the problem in the shortest time possible. However, you should ensure that the solution aligns with every department's goals.
Never promise to achieve a long-term goal that you feel is impossible. Adjust your goals in such a way they align with other goals set by your colleagues.
5. Commit to Your Decision
Uncertainty undermines your authority and effectiveness. Make a decision and pursue it forcefully. When you commit to your decision, you cultivate confidence and motivation for your workers to execute the work that needs accomplishing.
If you are uncertain about your decision, take your time and carefully analyse all the dimensions. There is no point in making the decision today and change after a few days.
6. Set a Deadline
Avoid procrastination by coming up with a self-imposed deadline. It helps you decide without taking too much time.
7. Ethics Play a Significant Role
When you have a set of guiding values, you make decisions quickly and easily without having a guilty conscience.
Before you make your decision, review all the legal ramifications. You can hire a legal advisor to review the implication of a particular decision. It helps reduce the uncertainty of legal trouble.
A Look into the New Approaches of Decision Making
Traditional approaches to decision-making have been bolstered by contemporary technology and present-day research. As a decision-maker, take time and try these approaches to improve your decision-making.
1. Small-Group Processes
You make effective decisions by consulting groups.
- Arriving at a premature decision is unlikely
- You get to examine multiple alternatives
- You assign clear responsibilities
- Since there is a likelihood of debates, they can be emotional instead of rational
- In some cases, not everyone will accept the decision.
You use quantitative analysis and data to support the decision-making process.
- Since it is a scientific method, it adds rigor
- High probability for the decision to be correct
- Gathering sufficient data may be time-consuming and challenging
- You may make incorrect assumptions
You learn from brain research, consequently illuminating decision-making.
- You can know when to utilise the emotional brain
- You train yourself to perform more rationally and effectively
- You may give a lot of value to individual decision-making, increasing the chances of an uninformed decision.
- There isn’t much understanding about the human brain.
As a decision-maker, you rely more on your experience and guts to make a decision.
- Easy and require no analysis
- The subconscious can be productive at weighing options
- The least accurate decision-making approach
- One can get swayed by context
5. Behavioural Economics
You incorporate research on economic patterns and then think into decisions.
- Exposes biases and irrationality areas
- Can sway decisions in a specific direction
- Field findings are still sketchy
- Wording and context can get utilised to manipulate decisions
6. Wisdom of Crowds
You use surveys to cater to decisions or inputs by a large group of individuals.
- People with experience on the issue may provide vital information
- Crowd-based decisions tend to be very accurate
- Members of the crowd can influence one another
- Difficult to maintain ongoing participation
You use algorithms and decision rules to automate decision processes.
- Criteria for decisions are explicit
- Difficult to develop
- Decision criteria may change
Just like you’d expect, each method has distinct advantages as well as drawbacks. Choose wisely.
Roadblocks to Better Decision Making at the Executive Level
Some of the challenges faced by managers include:
- Worrying that the decision will be unpopular among their counterparts
- Fear of making a fallacious decision
Fear can lead to indecisiveness, do not allow fear to be the cause of your indecisiveness. Such delays can lead to serious financial consequences. When you feel you have collected all the information you need – about 80%, decide.
On the other hand, if you are overconfident and fail to seek the opinions of your counterparts, you may end up creating problems. First, listen to the input of others before offering your suggestions. You bolster innovation and creativity, leading to an informed decision.
The steps and tips highlighted in this article will help you formulate an amicable solution for the various problems that may affect the company. However, you always remember that more exposure leads to better decision-making skills. Always aspire to adapt to change.
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