Five Considerations for Good Decision Making

This evening, I was having a conversation with a colleague regarding how decisions should be made in an organization.  There are all kinds of ways that organizations make decisions; some are good and some are not so good.  However, good decision-making is simply too important to an organization to do it wrong.  Obviously, a person’s position in an organization will necessarily impact the kinds of decisions that are being made.  Here are five of my thoughts on how to make sure that the best possible organizational decisions are being made.

Work to a plan

Personally, I feel that decisions made without consideration against an overarching plan are good only for short-term or very small tactical needs.  Every organization needs to have some semblance of a strategic plan, or at least a set of guiding principles by which to operate.  For example, Southwest Airlines makes business decisions around what the company calls its Triple Bottom Line.  The triple bottom line is described as an “approach that takes into account the carrier’s performance and productivity, the importance of its People and the communities it serves, and its commitment to efficiency and the Planet.”  Gary Kelly, Southwest CEO, describes the triple bottom line as “three pillars provid[ing] a smart, natural filter for making decisions that enable us to create a financially strong Company and to provide job security for our People, returns for our Shareholders, and efficient ways to conserve our natural resources that help the world around us.”

For Southwest, this approach provides the company with a framework for making decisions that align with corporate goals.  Every organization needs a similar set of goals against which strategic decisions are measured.  At the very least, those in decision-making roles need to work to a strategic or annual plan to ensure that decisions continue to meet business needs and aren’t working contrary to stated goals.

Ensure group-wide deep understanding of the business and goals

Another important component in good decision making is ensuring that everyone involved in a particular decision has full awareness of how the business operates including revenue and expense drivers, customer base, and overarching mission and decision structure.  This doesn’t just mean that people “get” the mission, but that they truly understand it and are able to understand how a decision may impact an organization.

Hire people that understand both the micro and the macro – and respect both

Even at the VP level, which is where many of the most impactful decisions are made in many organizations, the participants in a decision-making process still bring with them parochial thinking in some ways.  Everyone views decisions through their own lens of experience, understanding, and organizational position.  However, those responsible for overall leadership must ensure that their decisions reflect what’s best for the organization as a whole, even if that may not be the best decision for an individual group.  This is much easier said that actually done, though.

The goal shouldn’t always be to make everyone happy

If you try to be all things to all people, you satisfy no one.  That mantra is critically important to keep in mind when making decisions for an organization.  If the best outcome for an organization also means that everyone is happy, that’s great, but more often than not, a decision will be good for some and may not be good for others.  That said, if it’s the right decision based on the organization’s decision-making framework and goals, strong leaders will always make the right choice.

Keep your life out of the equation

I serve on a couple of boards, so I remain involved in organizational decision making on a regular basis.  Nothing frustrates me more than to see an individual bring personal baggage to a discussion when it has no place in the decision.  When people are sitting around the table debating the merits of a decision, bringing personal experience to the decision at hand is fine, but making a decision based on your personal feelings is not.  For example, if you’re discussing a potential employee benefit, considering how that benefit was handled in your own organization is good but dismissing the benefit because you don’t get it yourself in your day job is not.  Around the table, everyone is working in the interests of the organization.

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