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3 Types Of Decisions That Actually Helps Leaders Shape Out Their Companies

A recent survey showed that there are more than 1,200 senior managers at global companies feeling uncertain throughout the decision making process: from process-making to keeping pace with each decision and outputs of that decision. Nearly 50% of respondents said that decision making was timely, but 61% said that more than half of the time spent on decision making was ineffective. The opportunity cost of this is huge: about 530,000 workdays of senior managers who are squandered if they are in the Fortune 500 companies, equivalent to $ 250 million for the time of decision-making only. Here are three keys to making management decision-making more effective, as expected.

The decision is a big bet – The premise for effective debate

Betting decisions often help shape the company in the future and are also the most important decisions a leader must make. However, they are often not careful in these decisions.

The company’s bet decisions require businesses to have the most effective and healthy debates possible, from which to bring high consensus to the management team. In fact, effective interactions and having a quality debate are the most answered factors to know whether their company is making good bet decisions

Leaders can encourage employees to debate by helping them overcome the “conspiracy of approval” approach to the discussion group by making small changes in the behavior of those in that meeting. Assigning a role to a person wearing a black hat (Theory of “6 thinking hats”) will help promote the critical thinking of the meeting. While questions start (by assuming that a plan can fail and encourage management to find the cause), it can help to find a weakness of the plan or an argument.

Exhibit 1: 6 hats of thinking help boost critical thinking in the meetings

The goal of this is to understand alternative assumptions and solutions beyond what has been raised regarding the initial assumptions of a leader board. Creating a safe space for debate like this is very important. It may be helpful for the most senior professionals to feel most helpful if they are asked instead of expressing their opinions freely and increasing disagreement. A debate’s nature is a kind of healthy conflict – enabling senior executives to take the time to build trust and allow dissent among members, regardless about work or position at the company.

The decision is cross-cutting – Understand the power of making a process

There are many reasons for making decisions. The leader may not have a panoramic view of which personnel are involved and should be involved in a project. Today, the assignment and decision-making are often based on a type of structure, the Silos structure. The Silos structure both makes management easier, but it also creates many difficulties when the leader wants to aggregate small, less impactful decisions into bigger decisions. Therefore, the resolution of cross-cutting decisions often begins by committing to a coordinated process from many different departments to clarify the purpose, solution, goal, and role.

A global consumer company has made a report to determine the length of time wasted in decision-making meetings. As a result, up to 45% of the discussion showed ineffectiveness, of which 23% of individuals participating in the discussion did not add any value to decision making. Realizing that, the company analyzed the decision-making process into smaller chains, specifying the roles and responsibilities of each decision-maker, determining input and output for each segment. the part of the process and who is the one who will be rewarded for each performance the company generates. After trying this model in a few countries, the company has had a significant financial increase for the company (Because some employees have used their free time to carry out higher-value activities), as well as a strong increase in employee morale and their work-life balance. As a result, the company attracts and retains more talents.

The decision is delegated – proceed with actual empowerment

Delegated decisions are often much narrower than big bet decisions or cross-cutting decisions. They are many and relatively frequent elements of the day-to-day management of managers. However, when the wrong decision is repeated, it can pose a threat to company value.

An important aspect of empowerment is the creation of an environment in which employees can “fail safely.” Real empowerment not only helps employees have a clearer view of ownership and accountability but also to foster bias in action, especially in cases where time is the deciding factor. In these cases, the executives who delegate their work are always clear about the boundaries of the authorization (including those that go beyond the limits or ways that exceed an individual’s authority), ensuring that those for which they authorize will have the appropriate skills and knowledge (or if they do not already have one, the director should provide them with the opportunity to achieve that ability) and state the responsibility of the individual authorized person before each decision they make (including setting the consequences when they fail).

When leaders want to become better delegators, the question for them is not necessarily deciding whether to take power or give power. Somewhere, leaders need to balance in between two fees. The most ideal choice for leadership in training, challenge and inspiration for the generations behind, helping those who really need help, staying calm and understanding the problem in any case.


Exhibit 2: Summary of decision types


There are many ways to make important decisions better. But focusing on these three ways can help the company achieve early success as well as make it easier to share internal benefits within the company. Of course, this can only be true when assuming that leaders at all levels of the organization make decisions that reflect the company’s strategy and really create value for it. However, designing a complete process to fulfill the strategic goals of the business – Setting clear tasks or arranging incentives is a broader topic and is beyond the scope of this article. But if the functions and the parts are not connected to create a more comprehensive picture of the situation of the company, the leadership ability to make wise decisions will decrease significantly, no matter whether the problem was discussed before or not.

According to McKinsey

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