CEO.COM
September 24, 2014
3 Traps That Make Great Leaders Poor Decision Makers

Everyone occasionally makes a poor decision. Most of the time these are small, meaningless decisions with minimal impact. Then there are other times when they are significant decisions with titanic impact. Why do we make them?

Two knee-jerk rationalizations for poor decision-making are that we were under severe time pressure or that we didn’t have access to all the important information (unless we are explaining this decision to our boss and then it is often someone else’s fault).

In an effort to understand the root cause of poor decision-making, we looked at data from over 50,000 leaders and compared those who were perceived as making poor decisions against those who were perceived as making very good decisions. We identified a set of behaviors showing the highest level of statistical difference and did a factor analysis. We then grouped these behaviors into three categories that derail leaders from making the best decisions. Here’s what we learned.

1. Indecision and lack of confidence

Today’s decisions are often very complex and informed by a large body of data that is constantly changing. The reports and the analysis take much longer than expected, the decision gets delayed and the opportunity is missed. It takes courage to look at the data, consider the consequences and then move forward.

Oftentimes indecision is worse than making the wrong decision. This causes people to remain locked in the past by using the same old data or processes they have always used. People get used to processes and approaches that worked in the past and tend not to look for newer or improved approaches that work better.

The lack of confidence and drive also could be considered laziness. This shows up as a failure to check facts, take the initiative to confirm assumptions or to gather additional input. Often this occurs when people are sloppy in their work and don’t take full responsibility for their choices. Effective decision makers use the input of others, but find a way to act quickly with confidence and independently when necessary.

2. Unclear vision

Bad decisions come from a failure to connect the problem to the overall strategy. Without a clear strategy that provides context, many solutions appear to make sense. When tightly linked to a clear strategy, the better solutions quickly begin to rise to the top.

However, this strategy is often blurred by not anticipating unexpected events. Most people tend to be optimistic. It is discouraging to consistently consider the possibility of negative events in our lives and so most people assume the worst will not happen. Unfortunately, it happens fairly often. People die, get divorced challenging, have accidents, markets crash, house prices go down and friends are unreliable. It makes good sense to ask those “what if” questions and consider the impact of unexpected events.

A clear vision is not developed in isolation. The telltale sign of an unclear vision is the failure to gather input from others on a key decision. All our research, as well as others’ research on effective decision-making, finds that involving others with knowledge, experience and expertise improves the quality of the decision. Many times people do not involve others because they want the credit for a decision. Unfortunately they get to take the blame for the bad decisions also.

3. Lack of knowledge and poor communication

When we lack even the basic knowledge and technical expertise we have no way to tell if a decision is brilliant or terrible. Leaders need enough technical depth to understand the implications of the decisions that they make. A leader is responsible to find the talent needed to make difficult decisions.

But even if you are the most brilliant individual in your field and trust your instinct, if you don’t communicate the what, where, when and how of the decision, then it will fail. Seemingly good decisions become bad decisions because people do not understand or know about the decision. Communicating a decision, its implications and changes are critical to the successful implementation of a decision.

Have you ever fallen into one of these traps? To be a more effective decision maker, what tips would you add?