How an organization makes decisions affects whether it will have sustained success. While a company may occasionally experience luck, relying solely on ad hoc judgment is not a sound strategy. One of the most important things a leader does is make decisions. They must create a culture that knows how to make sound judgments without relying too much on one individual. You want to foster an environment where you, your management team, and other key employees use decision-making filters to increase the likelihood of making the right choices.
The first filter concerns the company’s mission and vision. Without this information, you are already disadvantaged. It starts with your organization’s identity, purpose, and goals. All major decisions should be easily justifiable by how they advance the company’s core purpose and direction.
The second filter pertains to your organizational values. Every business needs to have clearly defined expectations of behavior that drive daily interactions and decision-making. I recommend having no more than 5-7 core values that serve as a checklist to guide performance and clearly define the boundaries of acceptable behavior. As an organization and leader, you will always be what you tolerate.
The third filter relates to financial objectives. Every business should have some basic economic goals in terms of growth, profit, return on investment, payback period, net present value, etc. This doesn’t mean you won’t take risks beyond your economic comfort zone, but it does mean you will be fully aware of them when they occur and factor them in appropriately. Ignorance about the financial implications of your decisions is leadership malpractice.
The fourth filter concerns whether it fits within your organizational skills and capabilities. One of the biggest traps organizations fall into is trying to do things they are ill-equipped to accomplish. You cannot be good at everything and can typically be an expert at only a few things. Once again, you may decide to stretch beyond your comfort zone, but you must invest in addressing any existing skill and talent gaps.
Finally, the last filter deals with passion and enthusiasm. Is this something that excites a core group of people within the company? Will key employees put forth the extra effort because they want to, not just because they have to? To be great at anything, you need to genuinely care about doing an excellent job and believe the effort required is worth it.
If you ask the following questions before making any major decisions, I guarantee you will end up with better outcomes:
- Is this a good fit with the mission and vision of the company?
- Is this decision aligned with our organizational values?
- Does it meet our economic objectives?
- Is it a good fit with our core skills and competencies?
- Do we have the requisite passion and enthusiasm in-house to succeed?
Related articles:
- When Core Values & New Ideas Collide (inc.com)
- What You Don’t Know About Making Decisions (beckersbest.wordpress.com)
- Strategic Leadership and Decision Making (lifeissublime.wordpress.com)
- Today’s Meditation word: Judgment (dailythoughts89.wordpress.com)
- At the table – or not – with executive decision makers (theglobeandmail.com)
- Five Critical Questions About Organization Culture That People Avoid Asking (futurelab.net)
- Fact-Based Decision Making: Driving Cultural Change (openviewpartners.com)