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How to make better decisions

Over at Slacker Manager, Phil Gerbyshak has been blogging about how to improve decision-making. As we are in a less forgiving economic environment, it’s all the more important that your decisions as a leader are mostly right. So, here are a few quick ‘sources of power’ on making better decisions:

1. Don’t assume the best decisions come from you. ‘The leader as decision-maker’ who answers everyone’s questions and makes the final decision at the end of every meeting, is old hat and based on the outdated notion of the infallibility of leaders.

2. Gary Klein’s book Sources of Power, despite its title, isn’t about power, but is actually about decision-making. It’s a powerful analysis of decision-making by people in life or death situations – firefighters, soldiers, doctors – and the techniques (often sub-conscious) they use. Klein experimented with getting a bunch of marines to work in a trading pit, applying the military’s decision-making system for battlefield situations. The trader who were also part of the experiment trounced them. No surprise there. However, when he took the same traders and the same marines and put them in a war game exercise…the traders trounced the marines again. Their use of 80% information plus instinct in a fast-moving situation beat the military’s need (at the time: they’ve learnt since) for 100% information before making a decision.

3. Take your time when you can. Yes, I chose the ‘trader’ example in 2., on purpose. The turmoil in the financial markets shows that what looks like great, fast decision-making – if you’ve been in the bearpit of a trading floor, you’ll know how fast and furious it is – can, when scaled up and cumulatively, be disastrous for overall strategy. It can even de-stabilize the structure. So, our third and last thought on this subject comes from Rudy Giuliani, the former Mayor of New York, who is coming to share his leadership insights with us at Leaders in London in a couple of months (naked plug: book by tomorrow – Friday 26th – to save up to £500).

Giuliani advises us not to make decisions until you have to. The ability to reflect and ponder outcomes before acting is a sign of strength, not weakness, he stresses:

“One of the trickiest elements of decision-making is working out not what, but when. Regardless of how much time exists before a decision must be made, I never make up my mind until I have to. Faced with any important decision, I always envision how each alternative will play out before I make it. During this process, I’m not afraid to change my mind a few times. Many are tempted to decide an issue simply to end the discomfort of indecision. However, the longer you have to make a decision, the more mature and well-reasoned that decision should be.”

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