In the age of big data, it is critical that leaders become better decision makers. In the past, good decision making was based on knowing what wasn’t there and how to better manage between potential risks and rewards. As we enter the age of big data and artificial intelligence, leaders are overwhelmed by how much information is available before they make a decision.
What I have discovered is that decision makers today are frequently frozen into inactivity because they are overwhelmed by the amount of information and potential opportunities in front of them. Good decision making is even more important to entrepreneurs today as they choose where to invest their organization’s time and resources
Today’s blog shares several reasons people make bad decisions. Later this week, we share several tools to help you and your organization become better at making decisions. I have spent many years helping clients become better at decision making. Before we start, I should make sure you understand there is no way to bat 100% in decision making. The best decision makers I know have become very good at making decisions and then adjusting as they see the situation changing.
The first reason people make bad decisions is because they are not getting the right information from key members of their teams. In many organizations, people prefer to give incomplete information to their leaders. For many years, shoot the messenger became the normal operating procedure for executives who got bad news. As a leader, you must become more open to getting bad news if you want good information. This doesn’t mean you are happy to get bad news, but you learn to accept the news and then work to correct it. If people fear you, they don’t trust you and the decision making process fails if you cannot build trust.
The second reason people make bad decisions is because they do not understand how complex organizations have become. It is very easy for mid-level managers to only see part of the picture when discussing what’s going on in their departments. This could be because they have limited access to information across the organization or because they are only focused on the results they are responsible for. Who can blame them? Typically, their compensation is tied to their team’s performance so they don’t look at the bigger picture. The thinning ranks of middle management have created a condition where people are not exposed to different parts of their organizations. In many situations, senior leaders are left with incomplete information because they don’t know what they don’t know.
The third reason that leaders make bad decisions is the rise of technical specialists. These individuals can use information as a weapon. They don’t answer a question completely unless pressed. Today’s leaders need to be able to ask the right questions of these specialists. Without this capability, they are making decisions without critical information. When dealing with this type of gatekeeper, it is critical that you are able to separate the bluster from the muster. When I worked in advanced materials, it was not unusual to have individuals with multiple PhDs working on my team. They made it a habit to feed me BS and keep me in the dark so they could control of their programs.
I’ve made it a practice to build stronger relationships with a number of key technical resources around the organization to make sure I got the truth out of these challenging individuals. I also made it clear that if I caught them omitting things during our briefings that I would call them on it.
There is nothing worse than being called out by the slowest team member on something an individual is supposed to be an expert. When managing strong willed technical specialists my rule of thumb is to bend without breaking them.
The fourth reason leaders make bad decisions is they are not very good at trusting their intuition. I’ve found brilliant people incapable of making decisions with all the information at their disposal. When you ask them what they feel, they seem uncomfortable to express why or admit that their intuition can help them make a better decision. I believe that leaders must become better at helping their people develop intuition when the decisions are smaller. Intuition, like many other leadership skills, can be developed by helping your team become more conscious of their own biases and those of others on their teams.
Finally, the biggest reason I’ve found that people make bad decisions is they are not trained to make decisions. I worked with a very successful entrepreneur in several industries who shared with me the secret of his great decisions. He trained his teams not to have him make all the decisions. He spent significant time teaching the engineers make more decisions. The fewer lower level decisions he had to make, the more time he could invest in looking at the bigger issues for our organization. I watched many of the leaders in our organization go to him with a challenge and he would refuse to make the decision for them. Over time, our team members became better decision makers in their own right. As an added bonus, their new confidence provided our CEO with a sounding board for bigger decisions he had to make. His team became very good at making the right decisions.
Later this week, on Thursday, I’ll share several tools to help you and your teams make better decisions.