Someone has said this so well, “It is in your moments of decision that your destiny is shaped.” Nokia decided to stay committed to feature phones while Samsung and Apple were focused on smart phones. Kodak stayed committed to its film cameras while Nokia was taking the market away with its phones on mobile phones. Apple brought Steve Jobs back and emerged to be one of the most valuable companies in the world as they pursued his vision. Our history is replete with numerous such decisions which have impacted our lives in a significant way. The argument holds good for an individual as well as an organisation irrespective of its size, location and industry. How do we get most of our decisions right and made in the right way?
We make various kinds of decisions:
There are some situations which are driven by rationality and hence, it is not a big challenge. For example, the decision of carrying an umbrella is straightforward if the weather forecast shows, one is venturing into open spaces and one does not want to risk getting drenched. This is an example of a programmed decision, easy to take and a regular affair in all our lives. There are many rule-based decisions we take every day and make mistakes sometimes due to oversight or lack of attentiveness. Sooner than later, we will see automation taking over these aspects of our lives. The smart devices which surround us will make these decisions and keep us updated, pretty much like a piece of news or a notification.
Human prowess is needed and can be deployed meaningfully when we deal with unknowns and uncertainties. We have forecasts and projections, but all of them do not work as accurately as the weather forecast. Secondly, the correlation between carrying an umbrella and protecting one against the risk of getting drenched is well-established. In life, often there are multiple parameters which control the outcome. Firstly, the visibility into the future is hazy and hence, possible scenarios are unknown. Secondly, one does not know for sure if the choice made today will address the scenario effectively. Thirdly, there are endless possibilities before us and hence, the process of choosing is much more complex!
How do we deal with this complexity?
Let us say that the economy is doing well and the market for the company’s offerings is responding well. The top leaders see opportunities of doing better and must decide how they go about it. Should they enter into new territories, introduce new variants of their offering, diversify, strike new alliances, innovate methods to cater to higher-end segments, expand the share in the bottom of the pyramid or anything else? There are several options before them! Should they pursue a few of these or just one? The company will have information about its own performance and some about the market. However, one is not sure how the next few years will be for the segments they are catering to, the ones they are leaving underserved and how their competition will behave. Surely, it is a complex decision to make!
It is important to keep the information in sight and at the same time, one has to think of the future. This is where the process comes in. Leaders follow various methods while making these critical decisions. It is rooted in the organisation’s culture. While we know that our employees are closer to the market forces, some of us do not involve them in this crucial step of looking into the future. Some organisations involve their employees but do not do it meaningfully where they are able to air their views without the fear of being reprimanded or mocked. Organisations know that some of the decisions made about the future do not yield the desired results, yet they do not permeate a sense of empowerment for their employees to innovate and contribute new ideas or share their views. It is the top-level leadership team that sets in place the methods and practices to tap into the energies of their workforce, the views of external experts and thought leaders.
There are a few other aspects which are beyond collaboration which is the most critical aspect in making a decision. Do we study the data, study the trending of the key parameters of not only our industry but also peer group sectors? Some leaders trust their gut-feel a lot and do not consider the patterns suggested by the data in front of them. Sometimes they end up with the right decision and hence, believe that their gut-level decision works well. Whenever their decision doesn’t work, they tend to externalise the reasons and live in a make-believe world where the gut-feel is a sign of greatness. The fact is that leaders have to trust their instinct and judgement, however not at the cost of ignoring the data and analytics.
Secondly, in today’s business environment, speed is very critical and hence, there is no room for procrastination. If one faces a mental block to take a final call, it is worth acknowledging it and recognising it. Then it is easy to seek help from colleagues, peers, consultants and experts to arrive at a decision and go ahead with the implementation.