How To Make Good Decisions

How To Make Good Decisions 

A client CEO asked me to recommend a framework that would help his middle managers to make good quality decisions. His company was growing rapidly, and he wanted to delegate more decision-making authority to his people to free up his time.

Here is a summary of my email to him: 

Our ability is ultimately judged by the quality of decisions we make, and the quality of the results we achieve. Yes, living the core values of the organization is important. Yes, working hard and having a good attitude is important. But at the end of the day, our decisions and results are what ultimately define our contribution.  

Decision-making is simply making choices; choosing between alternative courses of action. There are many different methods, and you need to pick the right decision-making model for the situation you face. For example, strategic decisions require a very disciplined thought process. What I am proposing here is a generic framework that your people can use for day to day decision making in all roles. 

Option 1.

When you want people to think through the issues and recommend a course of action (as opposed to just asking you what to do), I recommend the GROW framework

Option 2. 

When you want to give people full autonomy to make and implement decisions independently, I recommend the decision-making approach recommended by Peter Drucker in his pioneering book The Practice of Management published in 1955. His six-step process has stood the test of time. 

  1. Define the problem (What is happening?)
  2. Analyze the problem (Why is it happening?)
  3. Develop alternative solutions (What are my options?)
  4. Select the best solution (What will I do?)
  5. Convert the decision into action (What action can I take right now?)
  6. Check results (How effective was my decision?)

Here is my modified take on Drucker’s approach: 

1. Define the problem (What is happening?) 

“A problem well stated, is a problem half solved” (Charles Kettering) 

  • What is happening?
  • Is it a fact, or is it an opinion?
  • What proof do I have?
  • How long has the problem existed?
  • What is the impact of the problem?
  • Do I need to take action?
  • If so, by when?

 2. Analyze the problem (Why is it happening?) 

  • What caused the problem to occur? 

Rushing to treat the symptoms may not be the best solution. Take a step back to identify the root cause of the problem. A technique developed at Toyota called “The 5 Why’s” can help. Very simply, when a problem occurs, you keep digging below the symptoms to uncover the root cause by asking “why” no fewer than five times. Here’s an illustration of the concept from Wikipedia 

Q: What is happening? 

A: The vehicle will not start. (the initial problem/symptom)

  • Why? – The battery is dead. (first why)
  • Why? – The alternator is not functioning. (second why)
  • Why? – The alternator belt has broken. (third why)
  • Why? – The alternator belt was beyond its useful service life and not replaced. (fourth why)
  • Why? – The vehicle was not maintained according to the recommended service schedule. (fifth why, the root cause)

 3. Develop alternative solutions (What are my options?) 

  • What are my options?
  • What happens if I do nothing?
  • What are the pros and cons of each option?

 4. Select the best solution (What will I do?) 

  • What will I do?
  • How will I communicate my decision?

 5. Convert the decision into action (What action can I take right now?) 

“Plans are only good intentions unless they immediately degenerate into hard work” (Peter Drucker) 

  • What tasks will I assign to myself (or others) to put the decision into action?
  • How will I make sure these tasks get done?

6. Check results (How effective was my decision?) 

I have written previously about the importance of After Action Review (AAR) meetings. The aim is to conduct a facilitated “post-mortem” session to capture the lessons learned so that the quality of decision making and implementation can be improved in the future. 

  • What was the goal (the decision / the mission)?
  • What actually happened?
  • What went well and why?
  • What could be improved and how?
  • Next steps?

To Conclude:

I applaud you for wanting to give people more authority to make decisions in their roles, but the onus is on you, the leader, to provide regular coaching and feedback. You can’t just give people decision making authority and hope for good results. 

Use the After Action Review process to discuss performance and provide coaching to grow the decision-making capabilities of your people. 

“Delegation without follow-up is abdication” (Andy Grove) 

I hope you find this framework useful. Give it a try and let me know how it goes.

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Until next time…
Stephen

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