I feel my client’s pain when we talk about making strategic decisions. The conversation will start with their asking: How do I balance the need for speed in decision making with my partners’ desire to be cautious and always right?
Contrast the law firm environment with corporation culture. When I ran new product development teams the goal was to bat 400% – Hall of Fame numbers. You need to take risk to achieve competitive advantage and win in the marketplace. Not always right but always making informed and calculated decisions. There was added value was learning from failures.
Track down a copy of the book Judgment by Tichey and Bennis. They argue that to speed the decision making process with less risk, break it down into understandable and actionable steps. Their approach is based on three types of judgment calls you need to make: People, Strategy or Crisis decisions.
To be successful in today’s marketplace leaders constantly need to make decisions and judgment calls. The essence of leadership is to make good judgment decisions more often than not in the face of ambiguous data, conflicting demands and uncertainty about what’s happening in the environment. Judgment calls can be managed with a greater chance of success by creating a culture where the leadership team, other partners and the business staff are always vigilant for clues about changes occurring around them. To exercise effective leadership you must have a methodology or approach to creating the knowledge necessary for you to make good judgment calls.
There are four “knowledge” repositories you can tap in the decision-making process:
- Self-Knowledge. Be aware of your personal values and motivations. What are your aspirations and how do they affect your judgment calls. “Watch” your behavior as it signals your values to everyone in the firm, your clients and others. What does your “gut” tell you are the right decision?
- Social Network Knowledge. Be aware of the skills, experiences, education and the performance track record of those people on your team and their surrounding matrix of support people: How do they fill in your knowledge gaps? What support do they provide? How does their presence further your efforts in making good judgment calls? What’s their advice? How good have their decisions been?
- Organizational Knowledge. Be aware of the culture within your organization. How do things get done, how do people expect decisions to be made and how do they support these decisions. What is the normative culture? Who are the acknowledged leaders, i.e., those who are watched for their response to new initiatives and who are the followed within the organization’s functional areas? How will the decision be received and accepted? What do the key influencers advise?
- Contextual Knowledge. Be aware of the environment surrounding the issues requiring a decision. What are the impacts to internal and external stakeholders, competitors, the overall marketplace? Anticipate the reactions and have scenarios in place for dealing with negative fallout from your decision.
Leadership Behavior That Leads to Better Decision-making
Good leaders exhibit personal attributes that contribute to good judgment. These attributes include their curiosity and a driving desire to continually scan their environment for any possible early warnings of change. They monitor competitors closely and are ready to make decisions to counteract changes in the marketplace.
Character and courage are key supporting pillars in building good judgment. Character is the ability to use one’s accumulated experiences, knowledge and wisdom to know intuitively and instinctively right from wrong in any situation. It is self-awareness of your values and motivations. What your goals are and making a commitment to make the right decision to achieve those goals. The leader’s character is part of the normative environment of an organization. Predicating how leaders will react and what decisions they will make are parts of the everyday guiding principles of the firm. To make decisions consistent with your character while accepting the consequences makes for good leaders. It is the substance part of leadership.
Courage is the process part of good leadership. You may know the right thing to do but without taking action, without making the call it does not matter. It is the willingness of the leader to act on the standards they have set as part of their character. Many decisions are close calls with supporters and detractors. In some cases the decision can be career threatening. The unflinching willingness of a leader to make a decision that is right in face of significant opposition takes the courage to act with conviction. Courage can distinguish great leaders from people who have been asked to lead and fail.
Leaders who make good judgments maintain networks of people across their organizations, in their professional services industries, with current and former clients and in their communities. The best leaders are known for their character and their consistent behavior based on their articulated and observed values. They exhibit the courage necessary to act on their values and, when necessary, make decisions that may be unpopular. Good judgment requires measuring the results and taking responsibility for what happens. Leaders encourage people to be forthright, tell the truth and be honest about their opinions.
Better to ‘Redo’ Than Backfire
Finally, good leaders have to have good self-awareness and the confidence that permits them to acknowledge the need for a “redo” whenever a decision seriously misfires.
The concept of “redo” at the various stages within the leadership judgment process is one that I recommend. Understanding that it is acceptable, sometimes essential, to stop the decision process and “redo” important steps in either the preparation phase or the judgment call phase. Stay focused on having the correct stakeholders aligned with proposed decisions and ensure they understand the framing of the issues, the story around the decision, the resolution and what is needed from them to enhance the decision.
In today’s business environment having a judgment process can help you be quick with your best-educated and calculated call. Making the “best” decision trumps being cautious, mostly right and slow to make a call. The goal is to win and to do that you’ve got to make the call as quickly as possible.