I work with leaders across all industries discussing the topic of effective decision making. Specifically, two questions continually surface:
How do I make better strategic, mission critical decisions?
How do I develop my staff’s critical thinking and problem-solving skills?
I’ve recently re-read a McKinsey article titled The Case for Behavioral Strategy. Their research concludes what many leaders suspect – that regardless of our good judgement and experience, we have biases that too often lead to poor decisions.
At a minimum, three factors go into making strategic decisions:
1) fact gathering and analysis
2) historical experience and insight
3) some sort of process, be it formal or informal
McKinsey’s study indicated that process quality drives the decision effectiveness, which in turn delivers a higher ROI than relying only on experience and the quantity and detail of the data analysis.
The article continues by introducing four steps to consciously adopting a mindset shift that limits our biases which leads to more effective decisions. Of the four steps, step #3 – Select Practices and Tools to Counter the most Relevant Biases – stands out most for me. The reason it resonates is because it reinforces a collection of best practices, including:
· Creating a safe environment that encourages discussion, explores options and welcomes healthy debate
· Communicating how this initiative aligns to the company or LOB vision
· Defining not only the ‘Why’, but also the ‘What’ – what success looks like
· Providing guidance for the ‘How’ without dictating specifics
· Leveraging the team’s critical thinking and problem-solving creativity to help lead change and determine the execution path for a successful outcome including accountability and measurement
As you are in the midst of 2019 planning, be mindful of historical decision-making biases and formalize a process that fosters a culture of critical thinking and decision making.