How an organization makes decisions affects whether it will have sustained levels of success. Any company can get lucky every once in a while but relying on ad hoc judgment is not a good strategy. One of the most important things a leader does is make decisions. They must create a culture that also knows how to make sound judgments without relying too much on any 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 has to do with the mission and vision of the company. If you don’t have this clearly defined, then you are already at a disadvantage. It all starts with who you are as an organization, why you exist, and what you are hoping to accomplish. All major decisions should be easily justifiable through the lens of how they advance the core purpose and direction of the company.
The second filter is related to your organizational values. Every business needs to have clearly defined expectations of behavior that drive daily interactions and decision-making. I advise no more than 5-7 core values that should act as a checklist to guide performance and establish firm boundaries of what is acceptable and what is not. As an organization and leader, you are and always will 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 it when this happens and factor in the risk appropriately. Ignorance about the financial implications of your decisions is leadership malpractice.
The fourth filter has to do with fit within your organizational skills and capabilities. One of the biggest traps that organizations fall into is trying to do things they are ill equipped to accomplish. You cannot be good at everything and can typically be expert at only a few things. Once again, you may decide to stretch beyond your comfort zone, but you will need to make the requisite investment 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 simply 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 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 level of passion and enthusiasm in-house to be successful?
- 7 Questions To Ask Yourself Before Making Any Big Decisions (capacity-building.com)
- Leaders Are Paid To Make Hard Decisions (capacity-building.com)
- 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)
- Todays 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)