Why decision making is so important in leadership and business?

Decision making is a critical component to people in positions of leadership and in any business. The ability to make effective decisions can be the difference between success and failure. I will tackle this question in two parts:

1. Importance of decisiveness
2. Leadership decisiveness: Non-business & business

Importance of decisiveness

In short, decisiveness in all areas of our life is essential and the lack of it can be dangerous and damaging. There are two types of decisions that we make every single day:

1. Quick and decisive
2. Change driving

Quick and decisive decisions are ones that are made every day. These decisions are usually informed but lacking detailed information. Quick and decisive decisions are made using a combination of experience, judgement and preconceptions. As a leader we need to make these decisions to provide people with guidance, clarity and direction. For example, deciding to look both ways when crossing a busy street to save your life because experience tells you that you might get hit by a car, or what shirt to wear to a meeting with a client because you may be judged as unprofessional if you turn up in a torn t-shirt. Category one decisions are part of the masses of decisions we make daily. Quick, decisive and for most people, easy.

The second type of decision is change driving. These are very well-thought out decisions. These are highly informed where information can be gathered from a few hours to a few months. These decisions are ones which typically create major change and can even shift a person’s entire direction in life. Change driving decisions occur less than quick and decisive decisions.

Spending too much time focusing on category one decisions create what is known as decision fatigue, making overall decision making harder. Mark Zuckerberg, CEO of Facebook, is famous for wearing the same type and colour clothing almost every day. He explains that it’s something he does to reduce the number of key decisions every day. It may sound trivial, but we have all been there, stressing over what to wear. It can be exhausting. It is important to know which type of decision you are making to know how much time and effort needs to go into making said decision.

Firstly, it is important to understand which type of decision is being made and then follow a process to make those decisions. If a person spends too much time or cannot make decisions which come under category A, then category B will become difficult. The ability to simply make Cat A decisions frees up time and energy for Cat B decisions.

A lack of being able to make decisions in either category can be damaging as it can lead to:

• Confusion
• Dawdling and delays
• Inaction
• Emotional distress
• Fear of being left behind
• Loss of money
• Reduction in opportunity for greater success

Leadership Decisiveness: Personal and Business

Personal

In our personal lives we face many decisions every day, from what to wear to which job to apply for from where to invest our money. Simply put, our decisions shape our reality, that’s it. Nothing else. When you are 80 years old and look back on your life you cannot look to external influences as to why your life turned out the way it did, you can only look back to your decisions. Note: There are extenuating circumstances of course.

If you spend 2 hours then night before a big interview worrying about what to wear your energy will be diverted away from the interview. You will end up stressing and having a bad night’s sleep, leaving you with less energy and focus for the interview. You flop in the interview and blame the stress of an interview.

Or, imagine you and your friend have saved up £20,000 each and are considering whether to invest in a property. You cannot decide and leave your money in the bank, whereas your friend does and invests. 5 years later you find out house prices increased and your friend has been earning rental income. Whereas, for you, inflation has risen and your money is now worth less.

The key point to understand from these examples is that the majority of people in the world today are responsible for their outcomes, no one else. A lack of decisiveness in our personal lives leads to stress, anxiety and regret.

Business

In the business environment people look to leaders to be decisive. When we’re confronted with a decision. Here’s a list of what not to do:

1. Scream
2. Panic
3. Shut down and freeze
4. Run away
5. Not make a decision

All jokes aside, I have witnessed this before and it creates more confusion and distrust than just doing something. You may have head this saying before:

• “Just do something, anything.”

Leaders behave differently – leaders must be the compass – the calm within the storm.

For decades, when there is crisis and panic, the world looks to the President of the United States. The world wants to know what the greatest superpower will decide to say and do. Barack Obama, the 44th President of the United States and arguably one of the greatest leaders of modern times, demonstrated how to do this with grace and poise. The public also rated him highly in comparison with other recent presidents. A Quinnipiac University poll released in late January 2017 found that 29 percent said he was the greatest president since World War II, just one point behind Ronald Reagan.

Mark Bowden, in his book ‘The Finish’, in which he has access to Obama to understand the complex story of how SEAL Team Six was sent in to Pakistan to kill Osama Bin Laden, explains of an extremely tough decision which Obama had to make. “This is fifty-fifty” said Obama, speaking to his administration on whether the evidence they had on Bin Laden’s location. According to Bowen, the confidence of the evidence ranged from 10% to 95%. Hardly an easy decision to make. Even after a key figures of the administration, the Vice President Joe Biden, suggested that failure would mean Obama losing his second term as President, Obama had to make a call. In the midst of confusion, lack of information and intense pressure, Obama made the call. Obama’s state of mind had to be clear and concise so that he could provide clear and concise direction to give guidance and instruction. He became the calm within the storm. He became the compass.

To become the compass, leaders need to be decisive. Without a decisive leader we experience most if not all of the negative effects I previously mentioned. Additionally, when leader a group, a lack of decisiveness will amplify the aforementioned negative effects.

Thank you for reading, JT