Decision Making

Distinguishing between exceptional leaders and their less remarkable counterparts often comes down to their decision-making ability. They employ a thoughtful approach that involves identifying the problem, predicting future outcomes, integrating past experiences with relevant data and assumptions, considering various options against crucial decision-making criteria, assessing and managing potential risks, and ultimately arriving at the most optimum solution. By using impartial and analytical thinking, leaders can elicit valuable contributions from their team, which enhances the range of potential solutions and garners their buy-in and knowledge for implementing the chosen course of action.
It is crucial to correctly identify the problem before finding a solution. Failing to do so may result in wasting valuable company resources on solving the wrong problem. Unfortunately, decision-makers often overlook the importance of defining the problem and jump straight to finding a solution. To illustrate, imagine your car’s air conditioning is malfunctioning, and you take it to a mechanic. The mechanic estimates that replacing the AC system will cost $1,500 when all it needs is $15 worth of new refrigerant. Misdiagnosing the problem could end up costing you $1,485! Therefore, it is essential to take the time to define the problem accurately to avoid unnecessary expenses and protect you and your company’s reputation.
After identifying a problem, it’s important to envision how things will differ once it’s solved and determine the expected outcome. This framework allows you to draw upon past experiences, known facts, and assumptions to develop possible solutions called courses of action. These courses of action serve as roadmaps to achieve the expected outcome, and it’s necessary to have more than one to decide. If there’s only one course of action, it doesn’t require a decision. The only requirement is to act.
It is crucial to assess each possible course of action based on specific criteria when making decisions. These criteria are the various factors, conditions, and resources necessary to accomplish the desired outcome. In some cases, specific criteria may carry more weight than others. For example, when selecting a car, you may establish price, safety, fuel consumption, and capacity criteria. You may prioritize cost and safety as the most important factors, followed by capacity and fuel consumption. By evaluating each car against these criteria, you can determine your optimal choice.
When making decisions, it’s essential to be mindful of potential risks. For example, when choosing a car based on specific criteria, there’s a chance of purchasing a lemon. Buying a long-term maintenance and warranty package that covers any unforeseen expenses beyond the standard warranty or insurance coverage is recommended to reduce this risk. This can help prevent additional costs if something major goes wrong with the car.
If you want to become an exceptional leader, master your decision-making skills. Adopt a deliberate, repeatable, complete process, then hold yourself and your team accountable for following it. You will achieve remarkable results benefitting you, your team, and your company.
COL Paul A. Raggio (Ret), the owner of Five Star Leader Development, is a fractional CEO/COO who develops C-Suite executives, business owners, and their management teams on leadership, management principles, and best business practices. Contact him to become a Five Star Leader! His email address is paul@fivestarleaderdevelopment.com, and his phone number is (252) 571-7368. Visit his website at https://www.fivestarleaderdevelopment.com.