How Companies Can Make Better Decisions

You have to love the Harvard Business Review great information without all the glitz and glamour of PBS. This week's video is an interview with Marcia Blenko of Bain & Company. She is discussing decision making as the building block of leadership effectiveness. This means that ultimately that change management will also need to be build on effective decision making.

Marcia Blenko argues that decision effectiveness correlates positively with employee engagement and organizational performance. How do you think that employee engagement relates to decision effectiveness?

To put it bluntly and in non-academic terms...people know when their leaders haven't a clue. There can be a tendency for managers to exist in a fog where they think their ineptitude is some how transparent to the people at the bottom of the organization chart. In my personal experience the people at the bottom of the chart are often more in tune with how the company is living and breathing than the people at the top. It is my firm belief that productivity follows morale. Poor morale makes people work just hard enough not to be fired. That link will be the best part of this blog. However, when people feel that effective decisions are being made, even if they are not always in line with what a given person wants, they are more motivated and engaged. This may mean that leaders need to actively listen to what their people are telling them. People are generally wanting to be heard so badly that they are willing to pay for the privilege.

What are some impediments to good decision making?

Marcia lists a few in her interview and I could just refer back to that but instead I will give an example from my own organization.

Leadership in an organization is a learned art. There are very few natural, charismatic leaders that also make effective decisions. Within my organization there are very few trained managers. Sure they are highly educated doctors, psychologists, and the like but having a PhD in psychology doesn't always equate to effective leadership. Add in a healthy does of bureaucratic tomfoolery (family friendly blog here) and you have a recipe for completely ineffective decision making. I feel that being properly trained to handle managerial tasks is crucial and lack of that training is an incredible roadblock to good decision making. I often use the argument that in order to manage three doctors I would need to have a great grasp of doctoring. In order to manage a healthcare system I need to know how to lead.

Blenko suggests that there are four elements of good decisions: quality, speed, yield, and effort. In your opinion, is there anything missing from this list?

Good decisions are no bigger than they need to be in order to get the job done. I would argue that precision would be a fifth element of decision making, and no I am not going to link to two movies in one blog post.

To elaborate I feel that some decisions can be too sweeping in scope. In order to overhaul an entire system one must fully understand all the variables in play. It may be that smaller, more targeted decisions towards one variable can have bigger ramifications down the road. The Law of Unintended Consequences should always be considered when making decisions. There are times bold strokes may be needed but careful leadership will always encompass the downstream effect of decisions. In other words, make a change, measure results, make a change, measure results. Rinse, Repeat. If one does not measure the results of an action before taking another you can wind up chasing the gauges to what can be called an unintended air-frame/ground interface.