If you think that you're the only one hesitant to make major decisions at work, you might be surprised to learn that you're not alone. A lot of c-suite executives have been there too.
For example, in a ten year long longitudinal study of more than 2,700 executives by Harvard Business Review, 57% of newly appointed executives said that making decisions was more complicated and difficult than they expected. And you've probably heard stories of how even the most hardened executives sometimes put off making hard decisions because they're afraid to be the ones to make that decision on behalf of the entire company.
That deep-seated fear actually boils down to human nature. As humans, we're hard-wired to be afraid of facing the consequences of a bad decision that we've made, be it at work, in school, or practically any other setting. Understandably, these perceived negative consequences are amplified in the corporate world because your survival is at stake here. You may end up missing out on that promotion you were eying, getting demoted, or even losing your job just because of a moment's folly, and then what next?
You need to realise that these fears are, for the most part, irrational ones. Organisations are not looking to fire people for bad calls. In fact, I know of one CEO who jokingly shared that if he had fired the person who had caused his company to suffer a huge business loss in the first year, that person wouldn't have been able to go around sharing his retirement stories with others today! Make no mistake, most organisations will support you as long as you have done your homework prior to making that decision and your intentions are clear.
Personality plays a huge role in decision-making. An empathetic leader is likely to take their employees’ feelings into account to a greater extent, as compared to a go-getter who is more likely to want to get things done, and fast.
So it is important for you, as a decision-maker, to understand your own personality, as well as the dominant personality traits of those around you to nip potential conflicts in the bud. To test this hypothesis out, ask your team to give established personality tests such as the Myers-Briggs Type Indicator or the Keirsey Test a try. You'll quickly realise how even the most subtle personality differences can manifest in everyday decision-making. Gaining a better understanding of the personalities of your subordinates will also help you empower them to make decisions when the need arises.
Regardless, you should embrace two key character traits before making any tough decision yourself: courage and integrity. I call the combination of these two traits "courageous integrity". "Courageous" here is simply your confidence in making that particular decision that is derived from your knowledge of the expert domain and the prior data that you've collected, while "integrity" refers to you knowing that you made that particular decision for the betterment of your organisation.
Before you can act with confidence knowing that your decision will likely turn out well, you need to collect as much available data as possible. This will place you in a better position to make that particular decision as you’ll be better informed of the pros and cons. Now is also the time for you to be creative and look at the available data you have. Visualise the unknown risks. What could possibly throw a spanner in your plans?
Here's an example to illustrate the importance of data collection: did you know that HSBC has a very rigorous process of making decisions only when certain data is available? This method of data collection worked when technology was applied in business tools for consumer loans, but it also worked beautifully for all loans.
When HSBC first launched its consumer loan business in India, it soon became apparent that its consumer loan business would not be as successful as its home loan business. The reason for this was simply due to consumer psychology.
Unknown to HSBC, most consumers would rather engage in rash purchases than wait for 72 hours for a consumer loan to be approved if they were shopping at a physical store. When the Head of Consumer Loans changed, the new Head realised the importance of data in charting business plans. He created a channel to amass at least 30–40% of the available data points. Unsurprisingly, the consumer loan business soon picked up after the data channel was implemented, and decision-making was decentralised.
You might then have this burning question on your mind: what if there happens to be no historical data for the specific scenario I’m making an unprecedented decision for? Suppose your company wants to invest a million in a new area for which there is no existing market. In such scenarios, you should test the waters first and follow a more conservative approach. Your decision or delivery might be delayed, but at least that's a "safer" risk-first option than the "courageous integrity" approach.
This "risk-first" approach helped a great deal when the Central Bank of India started giving out home loans for the first time in India, and did not know how the mortgage market would turn out. That's where they started slow, and took their time to understand the market better. Although it took some time for the bank to reach its business objectives and to grow its market share, in retrospect, it was the most optimal decision to make from a risk-averse standpoint.
Speaking of risks, it's always wise to complement the data you've painstakingly collected with a risk-based approach to chart and minimise the risks involved. At HSBC, we use a simple but powerful risk-based technique called clear choice: it's simply listing down all the pros and cons of all your possible options, let's say, Options A, B, C and D, before deciding whether a particular option is worth the risk.
Another risk-based tool we use is the weighted average, which gets you to look at the average risk accruing from the sum of all the parts involved. This way, you can accurately evaluate whether the decision is worth undertaking.
Clearly establishing your intentions before making any tough decision will help you to structure your business plans towards the end goal more effectively. It will also allow you to sleep better at night knowing that your decisions were made with the organisation’s best interests at heart. This is where the "integrity" part of the equation comes in. You should always make choices based on the big picture and not personal interest.
Granted, in the real world, it's seldom the case that major business decisions are made by one person. Important decisions are usually the outcome of lengthy team discussions or group meetings, which provide you with the opportunity to "hedge" your decisions if you're still having cold feet about them. Think of hedging as finding others to share the responsibility of making the decision with. These other people will then become your "partners-in-crime" who will share the benefits of or the blame for that decision.
I’d also advise you to document your team discussions leading up to that particular decision. The benefits of documentation are two-fold: first, to serve as a protective shield if things go wrong later on. With your documentation, you are armed with reference material that clearly articulates the team's rationale behind that decision. You protect yourself from bearing the brunt of the consequences if things don’t go well, and eradicate any ambiguity.
Secondly, if the project fails to take flight, the documentation can allow you to reflect upon the team's thought processes, from which you can learn. This way, you’ll avoid making the same bad decision in the future. Documentation can be in the form of verbal or written documentation, such as voice recordings or meeting minutes. Some documentation tools you might want to check out are OneNote and FaceCam, although in the majority of instances a trusty whiteboard and whiteboard marker will do.
Regardless of how you choose to document your team discussions, keep stakeholders continuously informed of the team's ongoing discussions and highlight the project risks upfront. A good model to follow would be the RACI model, which stands for Responsible, Accountable, Consulted and Informed. This model will help to clearly define each member's individual role and responsibility for undertaking that particular decision, while ensuring that stakeholders are kept abreast of the team's progress.
For every tough decision that you make, first define how you’ll measure the success and failure of that decision. Defining the measurement criteria upfront is a good way for you to approach that decision with a growth mindset. Only then will you be able to learn from the decision-making process and reflect on why the project has fallen short of its initial objectives, if things go wrong. These yardsticks could be in the form of Key Performance Indicators (KPIs) or Objective and Key Results (OKR) depending on your preference.
Most importantly, you don't want to face analysis paralysis when making a decision at a crucial juncture. Analysis paralysis is the process where you overthink or over-analyse a particular scenario, and as a result you make no decisions and there is no further action taken. You want to avoid this especially for decisions that involve relatively less significant risks.
Using the same consumer loan example where timing is everything, assuming that you were unable to make a decision as a City Head, and you push it to the State Head or Central Head, waste three days in the process, and guess what, your risk was only INR 30,000! Imagine the difference that would've made if you'd acted decisively.
You've probably heard that Steve Jobs and even Mark Zuckerberg only wear grey shirts to work, but have you ever paused to wonder why? According to them, choosing a different coloured shirt to work everyday is a trivial distraction that would only zap them of their precious time and mental faculty. By eliminating such inconsequential frills, they are then able to focus their energy on the decisions that make a significant impact.
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Former CTO | EVP & Global Chief Information Officer
IndusInd Bank | Firstsource