How to Make Decisions Like a CEO
September 14, 2016
The fate of your career will come down to your ability to make decisions.
When most people start their career, they spend time mostly on execution. But, as people start gaining experience and moving up the ladder, it comes less about execution and more about making decisions.
At the highest levels of business, such as the C-suite, it is all about making good decisions. And the leaders who make great decisions will build great organizations, whereas the leaders who make poor decisions will build poor organizations.
So, how do great leaders make great decisions? In his Lynda.com class Decision-Making Fundamentals, leadership coach Mike Figliuolo laid out a winning decision-making process. And part of that is asking yourself these nine questions, as they all impact your decision and force you to think through each part of it.
The nine questions you should ask yourself before making any decision are:
1. How big is this decision?
And, the follow up question, “Can I break this decision into smaller decisions?”.
A common fallacy is that you think you have to go all-in with one decision. That occasionally is the case, but more often, there’s the potential to break it into smaller decisions. Then, you can see one decision performs, before making the next.
2. How irrevocable is this decision?
Sometimes, there is no coming back from a decision. For example, you can’t reverse a layoff – once you let someone go, you let him or her go.
However, other decisions aren’t as set in stone. You can make a decision and see how it performs. If it doesn’t perform well, you can change course.
3. What is the cost of being wrong? And what’s the value of being right?
Obviously, you don’t want to make a decision that could cost you a lot, but could win you very little. Ideally, it would be the exact opposite, where you have little to lose and a lot to gain. Most often though, both the value of being right and the cost of being wrong is substantial.
4. How long do you have to make the decision?
One common mistake when making a decision is that people put up artificial deadlines for when the decision needs to be made. Ask yourself, when do you really need to make the decision?
That said, you shouldn’t delay making the decision for the sake of delaying it. You should only delay it to collect more information and get more data. But, if you can delay it and get more data that’ll help you make a better decision, than you should absolutely hold off on deciding anything.
5. What’s the cost of waiting? What’s the value of deciding now?
This goes with the previous question. Is there a real cost to waiting? Is there real value in making a decision now?
If there’s great value in making the decision right away, than it’s probably better to do it then. But, if there is little-to-no cost in waiting a bit and collecting more data, there’s no need to make a rushed decision.
6. What are my personal biases that might be affecting this decision?
We all have biases that affect our ability to make an objective decision. For example, maybe you are overly passionate or too close to some part of the situation that’s affecting your ability to see it clearly. You need to be aware of those.
7. How do I mitigate those biases to make a better decision?
This goes hand-in-hand with the last point. Once you’ve identified your personal biases, you need to find ways to mitigate them. Often, that means bringing in other people with other backgrounds and viewpoints, and legitimately considering their opinion.
8. Who do I need to involve in the decision and how do I need to involve them?
Furthering the last point, you want to get as much relevant data as you can, before making any decision.
So, yes, you need to talk to people who will mitigate your biases. But you also need to talk with people who have information and points-of-view germane to the decision: marketing, sales, product, etc.
That said, you also need to be careful in how you involve them. For some people, it’s best just to get the facts from them. And then there are others you’d want to play more of a part in helping you make the decision.
9. Who needs to know I made a decision and how should I inform them?
Communicating the decision can be just as important as the actual decision itself. You need to determine who needs to be notified of the decision and how they should be notified – is email okay, or should you tell them in person?
Tying it all together
Asking yourself these nine questions will likely alter your decision, at least slightly. Also, just asking them forces you to consider all aspects of the decision and ensure you’ve fully thought it through.
Bottom line, your career is going to come down to your ability to make good decisions, particularly if you strive to advance to leadership positions. The more structured you can be in your decision-making process, the better those decisions are likely to be.
*Image by the World Economic Forum