This blog is part of a 16-part series focused on what capabilities make a strong leader. Sounding Board has identified 16 leadership capabilities that the strongest leaders possess. These were developed from research-backed leadership theories, leadership competencies used for evaluation from top business schools, and 25+ years of practical coaching application.
Great leaders understand how to balance emotion with reason, and have the decision-making skills to positively impact themselves, their employees, customers, stakeholders, and their organizations. Making good decisions in difficult situations is no small feat. They often involve change, uncertainty, stress, and sometimes dealing with others’ unfavorable reactions.
Having good decision-making skills also means building critical thinking skills with which to ascertain the problem, and come up with a solution that is beneficial to the company and employees. Further, leaders have to maintain fairness when making decisions. They should be unbiased and communicate appropriately for the situation.
As a leader, making decisions is one of your key responsibilities The choices you make steer your team and organization toward success or failure That’s why decision-making abilities are among the most vital skills for effective leadership.
This article will examine why decision-making is such an essential leadership skill and provide tips to enhance yours.
Leaders Make Countless Important Decisions
Leadership roles involve constant decision making As the head of a team or organization, you decide
- Which initiatives and projects to pursue
- How to allocate resources like budget and staff time
- When and how to expand operations
- If and when to pivot strategies
- How to handle conflicts
- Whom to hire or promote
- Where cost-cutting is needed
While you may consult others, the ultimate choices fall on your shoulders. Your decisions chart the path forward.
Decisions Directly Impact Success
The judgment calls leaders make have cascading effects. Good choices set your team up for success. Questionable ones put goals at risk. Bad calls can devastate morale, productivity, and results.
For instance, correctly identifying and investing in a new growth area could significantly increase sales. But opting to rest on your laurels rather than innovate? That could cost you customers.
Carefully weighing whether to hire another manager now or wait six months might propel your division forward. Rushing to fill the role could mean making the wrong choice.
Your decisions direct the trajectory of your team and organization.
Decision-Making Abilities Can Be Learned
The thought of holding your team or company’s fate in your hands through decision making can seem daunting. But the good news? These critical skills can be strengthened.
While some people may naturally possess better judgment, decision-making is not an inborn trait. It’s a competency acquired through:
- Education and training
- Experience
- Mentorship
- Self-analysis and improvement
Plus, there are proven systems and frameworks to enhance the way you approach choices. Leveraging them in your leadership toolkit can sharpen your abilities.
6 Ways to Enhance Your Decision-Making Skills
Here are tips and strategies to improve your judgment calls as a leader:
1. Seek Diverse Perspectives
Getting input from different people before deciding prevents insular thinking. You may believe there’s an obvious choice, but listening to alternative views encourages you to see options you’d otherwise miss.
Tap people who offer varied lenses like:
- Team members with different roles and vantage points
- Cross-functional partners
- Higher-ups with a strategic outlook
- External advisors like consultants with specialized expertise
2. Define the Problem Clearly
Before weighing options, clearly articulate the issue or decision to be made. Sum it up in a succinct problem statement.
Fuzzy understanding of the dilemma leads to poor solutions. Taking time to frame the challenge crisply focuses your thinking.
3. Consider Both Facts and Intuition
Good choices balance hard data with “soft” gut intuition. As a leader, consider:
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Quantitative facts – Analyze relevant metrics, projections, financials, polls, statistics, etc.
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Qualitative inputs – Hear different opinions. Trust your instincts gained from experience.
Let the data inform your intuition, not override it. Synthesize both for integrated thinking.
4. Weigh Pros and Cons
List the potential upsides and downsides of each option on paper. Visualizing them together lets you compare objectively.
Include both tangible and intangible effects. Assign weights if some factors are more important. The side with greater total benefit typically prevails.
5. Aim for “Good Enough” vs. Perfect
Leaders can get stuck chasing the perfect solution, delaying action. The right choice often isn’t obvious. Have the courage to make a good enough call you can revisit.
Harvard Business School Professor Max Bazerman’s concept of “good enough decision making” recognizes perfection is unattainable. Determine your minimum thresholds and choose from options that meet them.
6. Learn From Experience
Reflect on the outcomes of past choices to sharpen your judgment. What worked? What didn’t? Why? How might you decide differently next time?
Keep a decision journal to capture takeaways. Review it often, so lessons learned become instincts guiding your future calls.
Decision-Making Frameworks and Models
Beyond tips, proven decision-making frameworks used by leaders worldwide can strengthen your abilities. Here are three top models:
The OODA Loop
This four-step approach was created for military strategy but applies to business. OODA stands for:
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Observe – Collect data and inputs from various sources.
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Orient – Analyze information to understand circumstances fully.
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Decide – Weigh options quickly based on analysis.
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Act – Execute the choice decisively.
Then cycle through OODA continuously to evaluate and adjust.
The Pareto Principle
Known as the 80/20 rule, this principle states 80% of outcomes result from 20% of causes. Identify and focus your choices on the vital few factors versus trivial many.
For example, 20% of your customers may generate 80% of your revenue. Choices tailored to them warrant more weight.
Six Thinking Hats
Devised by Edward de Bono, each metaphorical “hat” symbolizes a mode of thinking. Switching hats broadens perspective.
- White – Objective facts
- Red – Intuition and emotion
- Black – Caution and risk management
- Yellow – Optimism
- Green – Creativity and new ideas
- Blue – Process control and organization
Trust Your Instincts
With structured approaches and self-improvement, your decision-making can progress from good to great. But also have faith in your leadership experience. Go with your gut sometimes when logic can’t indicate a clear winner.
Not every judgment call will be perfect. But by honing your abilities, you will choose the best course far more often, leading your team to shared victories.
Decision making is an essential leadership skill that directs organizational success. While tricky, it’s a competency that can be enhanced through knowledge, practice, and learning frameworks. Leverage the tips here to make sound choices gifted leaders consistently make.
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Why is good decision making so important?
A leader must be prepared to make a host of different types of decisions, and the following results often follow effective decision-making:
- They help you deal with problems: When challenges arise — whether individually or organizationally motivated — creating a positive outcome often depends on a leader’s final decision. Businesses run more smoothly when leaders make sound decisions at the right time, and without delay.
- They can be motivational: A leader’s primary job is to empower talent to work as productively as possible. When employees see that their manager has consistently great decision-making skills, it gives them a skill to emulate as they grow in their own development. It can also encourage discretionary effort, communication, and collaboration.
- They save time: We’re all extremely busy these days. Schedules are packed, and it’s tough to manage a team. Making effective decisions can ease delegation, reduce errors, and employees won’t need to wonder and waffle over what to do. Sound decision-making provides clear direction.
- They improve productivity: Effective decisions can propel work projects forward, which increases employee productivity. Most working professionals have been frustrated by a stalled task when they can’t get a decision from management. This slows down work and creates inefficiency. However, when a leader can weigh the pros and cons of a task and give decisions more quickly, it allows the employees to start work faster.
You can build good decision-making skills
Everyone is not born with good decision-making skills. Many have to cultivate them, and leadership coaching is a great way to do that. The right coach will challenge you, invite new thinking, promote new skills acquisition, and support lasting behavioral change. Then, with thoughtful practice, it becomes easier to consistently decide what is the right thing to do, at the right time, for the right reason.
Three critical decision-making skills great leaders find essential include:
Strategic decision making requires leaders to analyze all the facts presented in a situation. Leaders need to use logical reasoning to weigh the pros and cons of their potential course of action. In order to improve decision-making skills, leaders need to be self-aware, and understand their emotions to ensure they make objective and rational decisions.
Leaders can employ problem-solving skills to make crucial decisions for their business, talent concerns, or most anything. It requires that they factor in different viewpoints, and consider different variables — timing, barriers, strategic priorities — in tandem with a detailed scope of the problem at hand. Then, they must use all of the information to make a thoughtful decision.
To develop strong decision-making skills, leaders need to be aware of, have control over, and express their emotions in a healthy and measured way. Leaders should not let their emotions take over when making informed decisions. They must have high emotional intelligence to effectively process and convey their decisions and point of view to others during the decision-making process.
Leadership coaching can help to build all of these skills. When done well, using a leader’s current challenges and responsibilities as the backdrop, a skilled coach can help to align new behaviors to productive and profitable decision-making.
Decision Making in Leadership
Why is decision-making an important leadership skill?
Leadership may require managers to make decisions that impact employees. To make effective decisions as a leader, it may be helpful to understand how decision-making skills can help you make tough choices. In this article, we discuss why decision-making is an important leadership skill and tips you can use to make decisions in the workplace.
What is decision-making in leadership?
As we progress in our leadership journey, decision-making is a way people know us as leaders. Are we methodical, impulsive, inclusive, slow or fast; do we look at the data or go by feel; and how are we accountable for our decisions? As we progress in our leadership journey, our decisions grow in importance and consequence.
Why is decision-making important?
The critical skill of decision-making derives its importance from its wide-ranging impact. Think of your typical day as a manager and the number of decisions you consciously and unconsciously make. It could be about sharing a message with your team, adding a new strategy to your plan, or choosing a new way to manage deadlines.
What is a key task in leadership and decision-making?
A key task in leadership and decision-making is finding ways to encourage employees at all levels to make better decisions on the organization’s behalf in negotiations and beyond, according to a new book. What is the role of leadership in an organization?
