The Hindu Business Line : Six foundations of good decisions

There are six foundations for making good decisions, find Bryn Zeckhauser and Aaron Sandoski in How the Wise Decide: The Lessons of 21 Extraordinary Leaders ( www.landmarkonthenet.com). The first of these is ‘go to the source,’ that is, the relentless pursuit of information from the field.

“It is hard work, and it takes a lot of time, effort, and imagination,” the authors explain. “Other tasks can be delegated, but firsthand observation and conversation require you to be where the action is, whether it’s an operating room or your own factory floor.”

Fill a room with barbarians, says the second principle. Because, when the choice is tough and there is no clear path forward, a hearty debate can be the best tool you have for uncovering the right solution, reason Zeckhauser and Sandoski.

They emphasise the need for “a culture of candour in which employees are comfortable expressing their varied perspectives and just as comfortable working together to implement the resulting decision.”

Diktat three, conquer the fear of risk. “Business leaders can get so caught up in the possibility of losing that they ignore the realities of a situation,” the authors say. “The fear of loss clouds their thinking, and they wind up shying away from taking a risk even when the probability of winning big is high.”

What happens when people at all levels fear taking risks because a bad outcome can hurt the chances for promotion? Entire organisations end up spending “vast amounts of time, energy, and money seeking the safest options rather than those that offer the greatest risk-adjusted returns.”

The next nugget of guidance from ‘the wise’ is that you should make vision your daily guide. For, without vision, “your company is likely to become an unguided missile, whizzing here and there without a clue about where the target is or how to hit it.”

Listen with purpose, rather than carefully, urges principle five. Place what you hear in the right context, and fill in the gaps in your own information, the authors advise. “People engaged in a candid discussion in an environment in which they do not fear retribution will almost always reveal the things that they are worried about or that are most likely to motivate them.” Your job, while listening, is to identify those ‘hot points.’ And the final foundation is transparency.

“Telling the complete story prevents rumours and second-guessing from diverting your team’s energy and efforts,” Zeckhauser and Sandoski caution.
“A frank discussion with your team, including the data that went into making your decision, is crucial to transparency.” Provide the team with a road map that shows people what to do to execute your decision; also give them measurable milestones, expected challenges, and a concrete goal.
Transparent communication isn’t difficult if your decision is based on facts and sound reasoning, the authors assure. “But it is too often neglected in the rush to get moving to execute a decision.”
Too important a read to ignore.

D. Murali

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Six foundations of good decisions