When I was CEO at Thomas Nelson Publishers, we spent half a million dollars to attend an annual trade show. For several years, we invested in this event without stopping to ask whether or not it was the best use of our resources. Everyone assumed it was an essential expenditure. After all, our competitors would be there. Then I realized our assumption might not hold up to the facts. Upon quick investigation, the numbers revealed we had burned thousands of critical dollars on an ineffective marketing move. Ouch!
Decision making may be the toughest part of leadership. You are responsible for crucial choices that affect the livelihood of the business and your employees. Often, each dilemma is packed with conflicting information.
Sound familiar? If that hits home, you may be wishing for a formula to become confident in your decision-making. Through agonizing stories like the one I shared above, I’ve learned a thing (or three) about making better decisions.
I’ve narrowed it down to these three essential elements of a great decision.
Element #1: Information
Get the facts. When I reviewed the facts for the trade show, I found that we could host our own event for 20% of what we’d been spending as a vendor. At a fraction of the cost, we paid for our top customers to join us in our own space with our best authors. In the end, this investment was one hundred times more effective.
Sometimes it’s hard to get to the facts, but it’s absolutely essential. The facts are friendly. Even when they tell a story you don’t want to hear. Without them, you make bad decisions.
As you consider the facts, be wary of data limitations and confirmation bias. Your job is to separate the relevant facts from the irrelevant. It’s tempting to arrange the facts to tell a positive story. Instead, get the facts on the table before assembling your conclusion.
Element #2: Counsel
Get advice. You’re not good at everything. Face this reality and invite outside voices into your decision-making process.
Leaders get derailed all the time because of arrogance and single-minded decisions. The higher you rise, the greater your risk for disconnecting from essential perspectives on the ground. Counter this issue by asking for recommendations from trusted experts in other departments. You may not end up implementing their ideas, but you will be better informed for your verdict. This also increases the likelihood of team alignment for whatever direction you take.
Another route for wise counsel is through an outside consultant. Some leaders are skeptical about spending money on input. But think about it this way: it’s cheaper to pay an outside consultant than to use your time to solve the problem.
There’s nothing more expensive than a bad decision. When you add outside perspectives to the facts, you are well on your way to an effective solution.
Element #3: Intuition
Trust your gut. Data and input from others will not get you to 100% certainty on your decision. You must look inward and ask yourself what feels right.
Your intuition gives you permission to make the call—even if it opposes the other elements. As you move up in your organization, you will realize the limitations of data and biases in perspectives. Decision-making becomes grayer with every promotion. You have to tap into your gut instinct for complex problems.
When the next decision comes down the pipe, follow this framework. Ask yourself, “Do I have the right data? Have I sought the advice of trusted experts? What does my gut say?” Once you arrive at those answers, you can confidently state your decision. And I bet it will be a great one.