Article
Five Approaches to Effective Decision Making
Feb 22, 2021
There are many approaches to making an effective decision
Decision Making: A Critical Leadership Skill
Making effective decisions is crucial to a leader’s success. However, given the pressure to make decisions quickly, often without having all of the data necessary, it is easy to make the wrong choice. "On an important decision one rarely has 100% of the information needed for a good decision no matter how much one spends or how long one waits," said author and educator Robert K. Greenleaf. Although it is true that we don’t know what we don’t know, when you have a difficult decision to make, try to assess what information you lack, and how to obtain it.
It’s Too Easy to Make Bad Decisions
A McKinsey study found that 72% of senior executives thought their companies frequently made more bad decisions than good decisions. This stunning finding should be a wake-up call to all executives to create and prioritize an effective decision-making process for your team or organization.
Daniel Kahneman, who won the Nobel Prize for his research on decision-making, concluded that irrationality often trumps rationality in decision making. His research showed that 95% of all decisions are impaired by reasoning that engages in fallacies and systematic errors due to our use of mental shortcuts and rules of thumb that cloud our judgment. For more on how biases, impulsive decisions, and other irrational processes interfere with clear thinking and can set us on the wrong path, see our blog, How Leader Bias Can Result in Business Failure (/how-leader-bias-and-lead-to-business-failure)
Among the most effective antidotes to faulty decision making is to include the perspective of others who have different expertise, complementary functional or domain knowledge, or who can provide more objectivity or perspective on a leader’s decision. This includes not only your immediate team, but our network of colleagues, former mentors, and so on. Do I Make The Decision Myself or Involve Other? Who you bring in to help you make a decision depends not only on who is available, but also on the nature of the problem you are trying to solve. They need to have deep knowledge or experience that will add critical facts and perspective to your analysis and help you identify alternatives, implications, risks, or other factors you might have overlooked. Deciding Too Fast vs. Deciding Too Slow Of course, adding more people to the discussion is likely to slow things down. And there is no denying that including your team or other experts may add to the complexity of the decision or result in intense discussion and differences of opinion. But sometimes slowing down and being more thoughtful and deliberate is just what you need. “If there Is time to reflect, slowing down Is likely to be a good idea,” says Daniel Kahneman. Taking the time to gather evidence from as many relevant places as you can, brainstorming with knowledgeable people, and carefully weighing all the information rather than making a too-hasty decision could save you from making a huge error that could cost a lot of money, or even cost you your job or damage the organization’s chances of succeeding. “There are times when delaying a decision has benefit. Often, allowing a set period of time to mull something over so your brain can work it through generates a thoughtful and effective decision.” - Nancy Morris, author of Procrastinate Now So, what is a leader to do when there is pressure to make decisions quickly, but you know that your own biases and lack of complete information have the potential to lead to disastrous results? Is there a best way to make decisions? This blog will take the position that there is no single best way to make decisions. Different circumstances and different types of decisions require different approaches. In what follows, I will discuss five basic ways decisions can be made, what situations call for each approach, and the tradeoffs of different approaches. But first I will summarize the general benefits of including others in the decision-making process. Why Should I Involve My Team?
You must admit that making decisions by yourself is efficient and uncomplicated when you don’t have to consider others’ perspectives and concerns. When time is short, it is an attractive alternative. But solo decision making can easily lead to being heavily influenced by the leader’s biases, blind spots, reactivity, and focusing on too few options and too narrow a perspective. By contrast, increasing the diversity of thoughts and opinions can generate more alternatives and innovative solutions. Bringing together the right group of people who have different skills, experience, viewpoints, functional perspectives and styles can create synergy that, in turn, can lead to dynamic discussions that yield new insights, more relevant facts and more objectivity. Team Participation Is Empowering and Increases Buy-in Involving your team in decisions is not only good for you and for the success of the decision process, but also good for the team: it demonstrates that you value their viewpoints and makes them feel more engaged and likely to feel both appreciated and trusted. It suggests to them that you value their skills, knowledge and ideas. Both experience and research have shown that involvement in decision-making dramatically increases buy-in and ultimately elicits more support from team members when it comes to implementation. Participation in the process can increase their feeling of being invested in the decision and in their jobs and improves engagement and alignment. Gallup research also suggests that this can increase employee retention and reduce burn-out. Team Participation Helps Grow Leaders Being engaged in a well-managed decision process can also help team members develop their judgment and their own leadership capability, by exposing them to the process of gathering facts and opinions, weighing alternatives, and the discipline of working in partnership with others to come up with the best solution for the problem at hand. Team Participation Fosters Cohesiveness This experience of collaboration with the leader and other team members fosters team cohesiveness and increases a sense of shared identity because they are working to solve problems together rather than operating in and focusing on their functional silos. The feeling of accountability to the group grows as they take on greater responsibility for arriving at the decision. Team Participation Shows A Willingness To Share Power But remember, when you decide to involve your team in making decisions, you are deciding to share power and the decision may not always be the one you had in mind at the beginning. It tests your willingness to let go of control and let others be leaders. Ultimately this can result in better quality decisions and greater engagement, but it will test your ego’s need to have the answer and be right all the time. It will challenge your willingness to trust others. When should you involve your team in decisions? 1. When creating your strategy or long-term goals 2. When you realize that you have been too “top down” in your leadership style and need to be more open to input and do a better job of listening to feedback and ideas 3. When you have made some bad decisions in the past because you went off on the mountain and talked to God and came down with a solution that proved to be faulty 4. When you realize you have missed important information, leading to bad judgment 5. When trusting your gut rather than using a rational, systematic decision process led to bad results, hiring mistakes, confirmation bias, blindness to critical facts or alienation of team members 6. When you have received feedback that you are viewed as not trusting your team 7. When you need broad alignment and buy-in to ensure coordinated implementation 8. When the decision is consequential, difficult, complex or ambiguous and you could benefit from the collection of diverse viewpoints and facts 9. When you want to help team, members develop by exposing them to facts, ideas and decision disciplines 10. When you believe that the experience of collaboration and problem solving together and with the leader will foster team cohesiveness, encourage shared learning and increase a common sense of identity Guidelines for Team Decision Making • Be sure to involve the right people. The experience, skills and knowledge necessary to produce the best insights differs with each decision. The more diversity of perspective, the better. Including people based only on their seniority or their role can provide too narrow a perspective. Consider bringing in an expert regardless of their role or a person from outside who has domain knowledge relevant to the decision. • Let the members of your team know which of these leadership styles you are going to use. If you are aiming for consensus, each person’s opinion and perspective is vital and must be brought out. If you are going to make the decision yourself based on some input from the team, it will be good for them to know this from the start. • Consider setting up a meeting that is specifically designed to focus on this decision rather than trying to fit it into your usual staff meetings that often get hijacked by information exchange and reporting rather than high-level problem solving. • Consider your time constraints and deadlines. Do you have time to involve others and gather additional viewpoints and alternatives? Do you have enough information, and the right information, to make a good quality decision? • Be sure you carefully define the problem you are trying to solve rather than jumping too quickly into finding solutions. If you define the problem too narrowly, focus on a symptom rather than the broader root cause, or jump quickly to a single solution, the danger is that you will focus the team on the wrong thing and reach the wrong conclusion. • Actively draw in ideas and viewpoints from all team members. Start with knowledgeable experienced team members and those with expertise in the problem area but consider also including opinions from the more junior before turning to your most senior people or expressing your own opinion. Patiently listen and be the last to weigh in. • Try to create an environment where team members feel safe being open and honest and saying what they really think. • Draw people out. Ask questions that surface alternative views, areas of concern, and problems that might prevent success. Invite team members to challenge each other’s opinions, including yours. Try to get the team to generate multiple possible solutions rather than locking in on one solution too soon. “That’s a good idea. What other angles can we come up with?” • Take the time to look at the most important side effects that might negatively impact the outcome you are seeking. Ask everyone to consider: What could go wrong? It is important for a leader to discuss the proposal with people who are likely to disagree with it or uncover its drawbacks. • Two common types of biases frequently have a negative effect on management decision, confirmation bias and over-confidence bias. Confirmation bias involves giving too much weight to information that supports your existing beliefs, conclusions or recent experience and discounts information that contradicts them. Overconfidence bias occurs when you overestimate your ability and fail to consider the risks that could lead to failure. • It’s important to be aware and cautious about the potential problems and dangers, but equally important for you to dwell on the factors that could lead to succeeding in achieving your objective. And share that vision with your team. • Play communication traffic cop. Ensure that people are listening, paying attention when others are speaking, are not interrupting, are being respectful of others’ views, and are building on each other’s ideas rather than trying to prove they are right. • Don’t let certain team members dominate the discussion or dominate it yourself. Especially when your aim is consensus, it’s vital that everybody has a chance to state their views. The following discussion considers various ways to make decisions, some involving other people and some not. There are many ways to get to the right answer.
5 Approaches To Making Leadership Decisions 1. The leader decides and informs the team Although in general it is always helpful to draw your team into the decision-making process, gathering their input and opinions, sometimes circumstances demand an immediate choice of direction: the decision is time-sensitive, and you need to take action now! You simply don’t have time to explore all the factors and ramifications with your team, so you need to decide and move forward on your own. This unilateral approach to making a decision works best when the leader has sufficient information as well as some expertise in the relevant domain or domains. It can also be useful for low-impact decisions and simple, routine, administrative decisions which don’t require much input or deliberation. It’s relatively safe for you to use this mode when you know your team is likely to support and implement the decision despite having no input. Whenever possible, leaders should share their insights, analysis, and rationale for proposed changes with their team, even though their proposal might meet resistance and challenge from team members. Leaders do need to seek buy-in, but there are times when they need to take a direction even in the face of resistance. This partly depends upon the level of experience, domain expertise, and insight possessed by other team members. Leaders frequently have insights and the ability to see around corners, making connections and spotting patterns sooner than the rest of the team. This is particularly true of visionary entrepreneurs. When the leader is working with a junior team and is many steps ahead of them, sometimes he or she doesn’t have time to bring the others along and must make a unilateral decision. The danger is that this can become a default pattern and may get in the way as the sophistication of the team increases and the complexity of decisions becomes greater and greater. Elon Musk and Steve Jobs are exceptionally creative visionary leaders, who saw things other people missed. On the other hand, not everybody is Elon Musk and Steve Jobs. A lot of leaders justify autocratic leadership by citing Jobs and Musk and concluding that this is the way to be a leader. It’s one way – but unless you are so ridiculously brilliant that people are willing to put up with your arrogance, bossiness, intolerance, etc., it’s not a great way to lead, because you will have trouble retaining top people, you are likely to make biased decisions, and you will alienate people whose support you need. When the decision is yours alone, you run the risk of deciding without having all the important and relevant information and the benefit of your team’s experience. When there is no team interaction and team members are deprived of offering their input, they may resent the decision you’ve made and not support it. People on the team may feel disempowered and offended: “Why didn’t you ask for our input? Why were we excluded?” And because they didn’t have input in the decision, getting their buy-in may be problematic. The one-person decision-making process is definitely efficient, and avoids time spent (or lost, depending on your perspective) to discussion and debate, but in doing that, it bypasses the group problem solving and brainstorming that can bring fresh and creative ideas to any situation. And remember, when the decision is unilaterally yours, it is subject to your personal biases and blind spots. And when you are the sole decider, you are also solely accountable for the outcome! 2. The leader gathers input then decides Midway between the unilateral approach to decision making and the effort to broaden participation and generate consensus is the procedure where the leader consults with team members, solicits input of ideas and opinions, and then makes the final decision. This approach is effective when you are ultimately going to be the Decider. The whole team does not have to come to agreement on the best way to proceed, but you feel their input will be valuable and you want to hear their ideas. You realize that people from different backgrounds bring a variety of experience and understanding to bear on each situation, and you want to take advantage of what they know. As the leader, either speak with team members individually to gauge their position, or facilitate a group discussion of issues, pros and cons, possible outcomes from different courses of action, and so on. For this collaborative approach to work, team members need good communication skills, and must be open to lively discussion of ideas. It requires a leader able to facilitate a thorough exploration and discussion, and willing to absorb and process the information and then make decisions. Encourage team members not to just rubber-stamp your views, but to bring their own experience and perspective to the table. It can be helpful if someone is willing to be the “devil’s advocate” and question or even oppose your views for the sake of clarifying the issues. But team members must be clear that although their input is solicited and viewed as valuable, in the end the leader is going to have the final say. One advantage of this decision-making model is that even though you as the leader are ultimately responsible for whatever decision is made, the group input and involvement can take some of the pressure off your shoulders. That is good for you, and good for team members; if they feel they have some skin in the game they will be more energized and willing to work toward the desired outcome. 3. Consensus Consensus decision making is a method enabling a team or group to reach a decision by discussion and mutual agreement. Participants have a chance to contribute their ideas and opinions. Instead of the final decision being based on a vote, letting the majority get their way, the whole team commits to finding a solution that they can all support or at least live with. This approach encourages all team members to get involved and have some say in the decision. It is an attempt to avoid having an individual team member or a minority feel like they have lost, that their concern or point of view is over-ridden or cancelled and that they cannot or will not support the final decision. To avoid this, the entire team as well as the leader must be willing to make a genuine effort to find solutions or alternatives that address the concerns and needs of all members. That means that you need to have input – and ultimately acceptance, support, and alignment – from all team members. The key is communication, an open flow of ideas and views among team members, including the leader. There is a difference between consensus and a decision that is unanimous. In a unanimous decision, all the participants are in full agreement and accord. It’s 100 percent. If you have succeeded in creating a culture in which everyone feels that it’s safe to be fully honest, this kind of unanimity will be rare; there will almost always be some doubts, disagreements, and viewpoints that could not be reconciled. Consensus means that everyone has agreed to put their remaining differences aside, and a decision has been reached that everyone can and will support in order to move forward. Aiming for consensus can generate a thorough discussion of issues and produce innovative alternatives. Done well, it may involve long discussions and require surfacing and balancing diverse and sometimes opposing opinions and demands. Team members must have access to all relevant data. To reach consensus, the team needs to be able to work collaboratively and systematically together, and you need to be a skilled facilitator. Be careful to involve everyone, and don’t allow the loudest voices to control the discussion. The higher the level of involvement by team members, with everyone working together through all the discussion and deliberation and arriving at consensus, the more support you will ultimately have for implementation. Because of the broader base of individuals contributing to the discussion, the danger of narrow, silo-based focus of a small part of the team dominating the discussion and the outcome is reduced. Consensus building is an effective, democratic way to create alignment and solidarity among team members, but it is not the right approach for every situation. It is probably not the way you want to proceed in emergencies or high-pressure, time-sensitive situations. Striving for consensus can take a lot of time and energy and will not be the most effective approach when you are facing a deadline, or a crisis and decisions need to be made in a hurry. So, what should you do if there is a time crunch, you need to make a decision in the next 24 hours, and you don’t want to shut team members out of the decision-making process? In that case, decide which team members have the most expertise relevant to the problem, or who will be most involved in implementation of the decision, and talk to them. If you can’t get consensus of the whole team, at least get the solid support of this select group. If the consequences of making a bad decision are significant and you need to be sure that you have considered all the ramifications, consensus with careful consideration is probably the right approach. But if the cost of missing an opportunity is high, you may need to move faster, and consensus isn’t the right solution. When you do need to act quickly, it is a good idea to designate an agreed-upon decision maker for every meeting. The approach is then called “consultative decision-making”. This could be you as the leader, or a trusted team member. You strive to gather the facts, generate discussion of ideas and alternatives and listen to concerns and opinions of team members who disagree with you and others. You want lively discussion of the issues and you want to hear the opinion of experts or those with domain knowledge. But the team doesn’t need to come to a consensus decision. Once the discussion of facts, viewpoints and alternatives is sufficient, the designated decision-maker steps in and makes the call. “Thanks for your input, I’ll let you know what I decide.” “You want to make sure that everyone participates…. You want to get to the best idea. Your job as a CEO . . . is not to forge a consensus, but to run a process where the best idea emerges." – Former Google CEO Eric Schmidt, quoting legendary Silicon Valley executive coach Bill Campbell. 4. Consensus with fallback If it seems likely that two factions in your organization will not be able to compromise and reach consensus and a clear path forward, then it’s a good idea to pre-set a course of action that you will take if the team cannot come to an agreement and you are required to step in and make the decision. Let everyone know that this is what will happen if they cannot reach accord. Setting a time limit may be necessary. If the leader fails to set limits, the discussion may go on endlessly without coming to an acceptable conclusion. A time limit puts pressure on the team, which can be a good thing or not. On the plus side, pressure can catalyze the process by pushing people to make concessions and compromises, particularly on issues that are not of central importance to them. Find out what concerns are most important to each of the disagreeing parties, and their willingness to compromise on issues that are less important. On the other hand, the team may feel rushed and that they don’t have enough time for proper consideration of the relevant factors. Conflicts may surface, and fundamental disagreements may not be worked through, with the result that alignment within the team, and of the team with the organization, may not be complete. 5. The leader delegates to the team or sub-group of the team Sometimes it may be that you and your immediate team are not the best people to solve the problem. It may be a specialized marketing or engineering question that requires expertise other than yours. Who on your team can you turn to, who can be trusted to dig deeply into the issue and come to an informed decision, or make a knowledgeable recommendation? If, as is often the case with the founders of start-ups, you are accustomed to being on top of all decision making, don’t panic, use this as an opportunity to let go of some responsibilities and decisions, and delegate to others the power to choose a direction, or at least to analyze the data and bring their suggested solution to you. The key is to remain calm under pressure, trust the team you have built, and use the data available to make the best possible decisions. – Brent Gleeson, former Navy Seal, founder of TakingPoint Leadership There will come a time when letting go of the reins will be necessary – there is just too much going on in too many areas of your growing organization for you to keep up with it all. It will not be easy for you but doing so will ultimately set you free to use your time and talents for other matters and builds confidence and leadership ability in team members. You may even have to look outside your organization to consultants who specialize in dealing with the kind of situation you are facing. The danger here is that delegating fails to make use of the talents and expertise of the entire team. It limits team interaction. When fewer people are involved, there is more chance for an individual’s personal biases to cloud their vision. And because not everyone is involved in the decision, it doesn’t build broad and strong commitment to implementation of whatever decision is made. This issue is of special relevance to entrepreneurs, who frequently have to make decisions in areas where they would be better off delegating, but they have limited funds and thus limited personnel. So, they themselves become central and crucial for all decisions, even on minor issues that would be best pushed downward. For major matters, if you feel the need to reach out beyond your team, you can solicit advice and suggestions from former colleagues who may have dealt with similar dilemmas, or from teachers or mentors. I was working 12 hours a day with 10 hours of work that easily could have been outsourced. I had never been in a situation where I didn’t want to do all the work myself. One day, I needed four things done by the end of the week and realized I didn’t have the time. That’s when I hired my first employee. . . I never looked back. I hired three more freelancers and ended up hiring one of them full-time within the first month. I now have five full-time employees. [Will Ellis, Founder of Privacy Australia.] When should you use these different leadership styles?
Each of these five styles or modes of leadership has its appropriate time and place. You are likely more comfortable with one or two of them, but to become the most effective leader you can be, it will be helpful to become familiar with all of them, and to be flexible and adaptable enough to shift from one to another as circumstances demand. This is sometimes referred to as “conditional leadership.” For example, a less-experienced team might need a strong guiding hand and a more authoritarian or leader-centric style, while a team of accomplished people can be trusted with a more democratic or even laissez-faire style where they are mostly on their own once tasks and roles are well understood.
Among the most effective antidotes to faulty decision making is to include the perspective of others who have different expertise, complementary functional or domain knowledge, or who can provide more objectivity or perspective on a leader’s decision. This includes not only your immediate team, but our network of colleagues, former mentors, and so on. Do I Make The Decision Myself or Involve Other? Who you bring in to help you make a decision depends not only on who is available, but also on the nature of the problem you are trying to solve. They need to have deep knowledge or experience that will add critical facts and perspective to your analysis and help you identify alternatives, implications, risks, or other factors you might have overlooked. Deciding Too Fast vs. Deciding Too Slow Of course, adding more people to the discussion is likely to slow things down. And there is no denying that including your team or other experts may add to the complexity of the decision or result in intense discussion and differences of opinion. But sometimes slowing down and being more thoughtful and deliberate is just what you need. “If there Is time to reflect, slowing down Is likely to be a good idea,” says Daniel Kahneman. Taking the time to gather evidence from as many relevant places as you can, brainstorming with knowledgeable people, and carefully weighing all the information rather than making a too-hasty decision could save you from making a huge error that could cost a lot of money, or even cost you your job or damage the organization’s chances of succeeding. “There are times when delaying a decision has benefit. Often, allowing a set period of time to mull something over so your brain can work it through generates a thoughtful and effective decision.” - Nancy Morris, author of Procrastinate Now So, what is a leader to do when there is pressure to make decisions quickly, but you know that your own biases and lack of complete information have the potential to lead to disastrous results? Is there a best way to make decisions? This blog will take the position that there is no single best way to make decisions. Different circumstances and different types of decisions require different approaches. In what follows, I will discuss five basic ways decisions can be made, what situations call for each approach, and the tradeoffs of different approaches. But first I will summarize the general benefits of including others in the decision-making process. Why Should I Involve My Team?
You must admit that making decisions by yourself is efficient and uncomplicated when you don’t have to consider others’ perspectives and concerns. When time is short, it is an attractive alternative. But solo decision making can easily lead to being heavily influenced by the leader’s biases, blind spots, reactivity, and focusing on too few options and too narrow a perspective. By contrast, increasing the diversity of thoughts and opinions can generate more alternatives and innovative solutions. Bringing together the right group of people who have different skills, experience, viewpoints, functional perspectives and styles can create synergy that, in turn, can lead to dynamic discussions that yield new insights, more relevant facts and more objectivity. Team Participation Is Empowering and Increases Buy-in Involving your team in decisions is not only good for you and for the success of the decision process, but also good for the team: it demonstrates that you value their viewpoints and makes them feel more engaged and likely to feel both appreciated and trusted. It suggests to them that you value their skills, knowledge and ideas. Both experience and research have shown that involvement in decision-making dramatically increases buy-in and ultimately elicits more support from team members when it comes to implementation. Participation in the process can increase their feeling of being invested in the decision and in their jobs and improves engagement and alignment. Gallup research also suggests that this can increase employee retention and reduce burn-out. Team Participation Helps Grow Leaders Being engaged in a well-managed decision process can also help team members develop their judgment and their own leadership capability, by exposing them to the process of gathering facts and opinions, weighing alternatives, and the discipline of working in partnership with others to come up with the best solution for the problem at hand. Team Participation Fosters Cohesiveness This experience of collaboration with the leader and other team members fosters team cohesiveness and increases a sense of shared identity because they are working to solve problems together rather than operating in and focusing on their functional silos. The feeling of accountability to the group grows as they take on greater responsibility for arriving at the decision. Team Participation Shows A Willingness To Share Power But remember, when you decide to involve your team in making decisions, you are deciding to share power and the decision may not always be the one you had in mind at the beginning. It tests your willingness to let go of control and let others be leaders. Ultimately this can result in better quality decisions and greater engagement, but it will test your ego’s need to have the answer and be right all the time. It will challenge your willingness to trust others. When should you involve your team in decisions? 1. When creating your strategy or long-term goals 2. When you realize that you have been too “top down” in your leadership style and need to be more open to input and do a better job of listening to feedback and ideas 3. When you have made some bad decisions in the past because you went off on the mountain and talked to God and came down with a solution that proved to be faulty 4. When you realize you have missed important information, leading to bad judgment 5. When trusting your gut rather than using a rational, systematic decision process led to bad results, hiring mistakes, confirmation bias, blindness to critical facts or alienation of team members 6. When you have received feedback that you are viewed as not trusting your team 7. When you need broad alignment and buy-in to ensure coordinated implementation 8. When the decision is consequential, difficult, complex or ambiguous and you could benefit from the collection of diverse viewpoints and facts 9. When you want to help team, members develop by exposing them to facts, ideas and decision disciplines 10. When you believe that the experience of collaboration and problem solving together and with the leader will foster team cohesiveness, encourage shared learning and increase a common sense of identity Guidelines for Team Decision Making • Be sure to involve the right people. The experience, skills and knowledge necessary to produce the best insights differs with each decision. The more diversity of perspective, the better. Including people based only on their seniority or their role can provide too narrow a perspective. Consider bringing in an expert regardless of their role or a person from outside who has domain knowledge relevant to the decision. • Let the members of your team know which of these leadership styles you are going to use. If you are aiming for consensus, each person’s opinion and perspective is vital and must be brought out. If you are going to make the decision yourself based on some input from the team, it will be good for them to know this from the start. • Consider setting up a meeting that is specifically designed to focus on this decision rather than trying to fit it into your usual staff meetings that often get hijacked by information exchange and reporting rather than high-level problem solving. • Consider your time constraints and deadlines. Do you have time to involve others and gather additional viewpoints and alternatives? Do you have enough information, and the right information, to make a good quality decision? • Be sure you carefully define the problem you are trying to solve rather than jumping too quickly into finding solutions. If you define the problem too narrowly, focus on a symptom rather than the broader root cause, or jump quickly to a single solution, the danger is that you will focus the team on the wrong thing and reach the wrong conclusion. • Actively draw in ideas and viewpoints from all team members. Start with knowledgeable experienced team members and those with expertise in the problem area but consider also including opinions from the more junior before turning to your most senior people or expressing your own opinion. Patiently listen and be the last to weigh in. • Try to create an environment where team members feel safe being open and honest and saying what they really think. • Draw people out. Ask questions that surface alternative views, areas of concern, and problems that might prevent success. Invite team members to challenge each other’s opinions, including yours. Try to get the team to generate multiple possible solutions rather than locking in on one solution too soon. “That’s a good idea. What other angles can we come up with?” • Take the time to look at the most important side effects that might negatively impact the outcome you are seeking. Ask everyone to consider: What could go wrong? It is important for a leader to discuss the proposal with people who are likely to disagree with it or uncover its drawbacks. • Two common types of biases frequently have a negative effect on management decision, confirmation bias and over-confidence bias. Confirmation bias involves giving too much weight to information that supports your existing beliefs, conclusions or recent experience and discounts information that contradicts them. Overconfidence bias occurs when you overestimate your ability and fail to consider the risks that could lead to failure. • It’s important to be aware and cautious about the potential problems and dangers, but equally important for you to dwell on the factors that could lead to succeeding in achieving your objective. And share that vision with your team. • Play communication traffic cop. Ensure that people are listening, paying attention when others are speaking, are not interrupting, are being respectful of others’ views, and are building on each other’s ideas rather than trying to prove they are right. • Don’t let certain team members dominate the discussion or dominate it yourself. Especially when your aim is consensus, it’s vital that everybody has a chance to state their views. The following discussion considers various ways to make decisions, some involving other people and some not. There are many ways to get to the right answer.
5 Approaches To Making Leadership Decisions 1. The leader decides and informs the team Although in general it is always helpful to draw your team into the decision-making process, gathering their input and opinions, sometimes circumstances demand an immediate choice of direction: the decision is time-sensitive, and you need to take action now! You simply don’t have time to explore all the factors and ramifications with your team, so you need to decide and move forward on your own. This unilateral approach to making a decision works best when the leader has sufficient information as well as some expertise in the relevant domain or domains. It can also be useful for low-impact decisions and simple, routine, administrative decisions which don’t require much input or deliberation. It’s relatively safe for you to use this mode when you know your team is likely to support and implement the decision despite having no input. Whenever possible, leaders should share their insights, analysis, and rationale for proposed changes with their team, even though their proposal might meet resistance and challenge from team members. Leaders do need to seek buy-in, but there are times when they need to take a direction even in the face of resistance. This partly depends upon the level of experience, domain expertise, and insight possessed by other team members. Leaders frequently have insights and the ability to see around corners, making connections and spotting patterns sooner than the rest of the team. This is particularly true of visionary entrepreneurs. When the leader is working with a junior team and is many steps ahead of them, sometimes he or she doesn’t have time to bring the others along and must make a unilateral decision. The danger is that this can become a default pattern and may get in the way as the sophistication of the team increases and the complexity of decisions becomes greater and greater. Elon Musk and Steve Jobs are exceptionally creative visionary leaders, who saw things other people missed. On the other hand, not everybody is Elon Musk and Steve Jobs. A lot of leaders justify autocratic leadership by citing Jobs and Musk and concluding that this is the way to be a leader. It’s one way – but unless you are so ridiculously brilliant that people are willing to put up with your arrogance, bossiness, intolerance, etc., it’s not a great way to lead, because you will have trouble retaining top people, you are likely to make biased decisions, and you will alienate people whose support you need. When the decision is yours alone, you run the risk of deciding without having all the important and relevant information and the benefit of your team’s experience. When there is no team interaction and team members are deprived of offering their input, they may resent the decision you’ve made and not support it. People on the team may feel disempowered and offended: “Why didn’t you ask for our input? Why were we excluded?” And because they didn’t have input in the decision, getting their buy-in may be problematic. The one-person decision-making process is definitely efficient, and avoids time spent (or lost, depending on your perspective) to discussion and debate, but in doing that, it bypasses the group problem solving and brainstorming that can bring fresh and creative ideas to any situation. And remember, when the decision is unilaterally yours, it is subject to your personal biases and blind spots. And when you are the sole decider, you are also solely accountable for the outcome! 2. The leader gathers input then decides Midway between the unilateral approach to decision making and the effort to broaden participation and generate consensus is the procedure where the leader consults with team members, solicits input of ideas and opinions, and then makes the final decision. This approach is effective when you are ultimately going to be the Decider. The whole team does not have to come to agreement on the best way to proceed, but you feel their input will be valuable and you want to hear their ideas. You realize that people from different backgrounds bring a variety of experience and understanding to bear on each situation, and you want to take advantage of what they know. As the leader, either speak with team members individually to gauge their position, or facilitate a group discussion of issues, pros and cons, possible outcomes from different courses of action, and so on. For this collaborative approach to work, team members need good communication skills, and must be open to lively discussion of ideas. It requires a leader able to facilitate a thorough exploration and discussion, and willing to absorb and process the information and then make decisions. Encourage team members not to just rubber-stamp your views, but to bring their own experience and perspective to the table. It can be helpful if someone is willing to be the “devil’s advocate” and question or even oppose your views for the sake of clarifying the issues. But team members must be clear that although their input is solicited and viewed as valuable, in the end the leader is going to have the final say. One advantage of this decision-making model is that even though you as the leader are ultimately responsible for whatever decision is made, the group input and involvement can take some of the pressure off your shoulders. That is good for you, and good for team members; if they feel they have some skin in the game they will be more energized and willing to work toward the desired outcome. 3. Consensus Consensus decision making is a method enabling a team or group to reach a decision by discussion and mutual agreement. Participants have a chance to contribute their ideas and opinions. Instead of the final decision being based on a vote, letting the majority get their way, the whole team commits to finding a solution that they can all support or at least live with. This approach encourages all team members to get involved and have some say in the decision. It is an attempt to avoid having an individual team member or a minority feel like they have lost, that their concern or point of view is over-ridden or cancelled and that they cannot or will not support the final decision. To avoid this, the entire team as well as the leader must be willing to make a genuine effort to find solutions or alternatives that address the concerns and needs of all members. That means that you need to have input – and ultimately acceptance, support, and alignment – from all team members. The key is communication, an open flow of ideas and views among team members, including the leader. There is a difference between consensus and a decision that is unanimous. In a unanimous decision, all the participants are in full agreement and accord. It’s 100 percent. If you have succeeded in creating a culture in which everyone feels that it’s safe to be fully honest, this kind of unanimity will be rare; there will almost always be some doubts, disagreements, and viewpoints that could not be reconciled. Consensus means that everyone has agreed to put their remaining differences aside, and a decision has been reached that everyone can and will support in order to move forward. Aiming for consensus can generate a thorough discussion of issues and produce innovative alternatives. Done well, it may involve long discussions and require surfacing and balancing diverse and sometimes opposing opinions and demands. Team members must have access to all relevant data. To reach consensus, the team needs to be able to work collaboratively and systematically together, and you need to be a skilled facilitator. Be careful to involve everyone, and don’t allow the loudest voices to control the discussion. The higher the level of involvement by team members, with everyone working together through all the discussion and deliberation and arriving at consensus, the more support you will ultimately have for implementation. Because of the broader base of individuals contributing to the discussion, the danger of narrow, silo-based focus of a small part of the team dominating the discussion and the outcome is reduced. Consensus building is an effective, democratic way to create alignment and solidarity among team members, but it is not the right approach for every situation. It is probably not the way you want to proceed in emergencies or high-pressure, time-sensitive situations. Striving for consensus can take a lot of time and energy and will not be the most effective approach when you are facing a deadline, or a crisis and decisions need to be made in a hurry. So, what should you do if there is a time crunch, you need to make a decision in the next 24 hours, and you don’t want to shut team members out of the decision-making process? In that case, decide which team members have the most expertise relevant to the problem, or who will be most involved in implementation of the decision, and talk to them. If you can’t get consensus of the whole team, at least get the solid support of this select group. If the consequences of making a bad decision are significant and you need to be sure that you have considered all the ramifications, consensus with careful consideration is probably the right approach. But if the cost of missing an opportunity is high, you may need to move faster, and consensus isn’t the right solution. When you do need to act quickly, it is a good idea to designate an agreed-upon decision maker for every meeting. The approach is then called “consultative decision-making”. This could be you as the leader, or a trusted team member. You strive to gather the facts, generate discussion of ideas and alternatives and listen to concerns and opinions of team members who disagree with you and others. You want lively discussion of the issues and you want to hear the opinion of experts or those with domain knowledge. But the team doesn’t need to come to a consensus decision. Once the discussion of facts, viewpoints and alternatives is sufficient, the designated decision-maker steps in and makes the call. “Thanks for your input, I’ll let you know what I decide.” “You want to make sure that everyone participates…. You want to get to the best idea. Your job as a CEO . . . is not to forge a consensus, but to run a process where the best idea emerges." – Former Google CEO Eric Schmidt, quoting legendary Silicon Valley executive coach Bill Campbell. 4. Consensus with fallback If it seems likely that two factions in your organization will not be able to compromise and reach consensus and a clear path forward, then it’s a good idea to pre-set a course of action that you will take if the team cannot come to an agreement and you are required to step in and make the decision. Let everyone know that this is what will happen if they cannot reach accord. Setting a time limit may be necessary. If the leader fails to set limits, the discussion may go on endlessly without coming to an acceptable conclusion. A time limit puts pressure on the team, which can be a good thing or not. On the plus side, pressure can catalyze the process by pushing people to make concessions and compromises, particularly on issues that are not of central importance to them. Find out what concerns are most important to each of the disagreeing parties, and their willingness to compromise on issues that are less important. On the other hand, the team may feel rushed and that they don’t have enough time for proper consideration of the relevant factors. Conflicts may surface, and fundamental disagreements may not be worked through, with the result that alignment within the team, and of the team with the organization, may not be complete. 5. The leader delegates to the team or sub-group of the team Sometimes it may be that you and your immediate team are not the best people to solve the problem. It may be a specialized marketing or engineering question that requires expertise other than yours. Who on your team can you turn to, who can be trusted to dig deeply into the issue and come to an informed decision, or make a knowledgeable recommendation? If, as is often the case with the founders of start-ups, you are accustomed to being on top of all decision making, don’t panic, use this as an opportunity to let go of some responsibilities and decisions, and delegate to others the power to choose a direction, or at least to analyze the data and bring their suggested solution to you. The key is to remain calm under pressure, trust the team you have built, and use the data available to make the best possible decisions. – Brent Gleeson, former Navy Seal, founder of TakingPoint Leadership There will come a time when letting go of the reins will be necessary – there is just too much going on in too many areas of your growing organization for you to keep up with it all. It will not be easy for you but doing so will ultimately set you free to use your time and talents for other matters and builds confidence and leadership ability in team members. You may even have to look outside your organization to consultants who specialize in dealing with the kind of situation you are facing. The danger here is that delegating fails to make use of the talents and expertise of the entire team. It limits team interaction. When fewer people are involved, there is more chance for an individual’s personal biases to cloud their vision. And because not everyone is involved in the decision, it doesn’t build broad and strong commitment to implementation of whatever decision is made. This issue is of special relevance to entrepreneurs, who frequently have to make decisions in areas where they would be better off delegating, but they have limited funds and thus limited personnel. So, they themselves become central and crucial for all decisions, even on minor issues that would be best pushed downward. For major matters, if you feel the need to reach out beyond your team, you can solicit advice and suggestions from former colleagues who may have dealt with similar dilemmas, or from teachers or mentors. I was working 12 hours a day with 10 hours of work that easily could have been outsourced. I had never been in a situation where I didn’t want to do all the work myself. One day, I needed four things done by the end of the week and realized I didn’t have the time. That’s when I hired my first employee. . . I never looked back. I hired three more freelancers and ended up hiring one of them full-time within the first month. I now have five full-time employees. [Will Ellis, Founder of Privacy Australia.] When should you use these different leadership styles?
Each of these five styles or modes of leadership has its appropriate time and place. You are likely more comfortable with one or two of them, but to become the most effective leader you can be, it will be helpful to become familiar with all of them, and to be flexible and adaptable enough to shift from one to another as circumstances demand. This is sometimes referred to as “conditional leadership.” For example, a less-experienced team might need a strong guiding hand and a more authoritarian or leader-centric style, while a team of accomplished people can be trusted with a more democratic or even laissez-faire style where they are mostly on their own once tasks and roles are well understood.
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Ego-driven leaders This type of leader often sees themselves as the architects of their own fates, solitary figures in the harsh world of business where competition is fierce and only the strong survive. They prize individual success and recognition above all else, their self-worth rooted deeply in personal triumphs. In their world, each decision is a step on the path to victory, which they walk with unwavering confidence. To them, leadership is less about marshalling the collective strength of a team and more about showcasing the force of their own unique vision. Their approach is characterized by a focus on the immediate, with a horizon that often doesn't extend beyond the next win, the next deal, the next acclaim. This type of leader regards the people around them as instrumental to their own narrative, valuing them for what they can contribute to the next achievement. Relationships are often seen through a lens of self-interest, with an underlying expectation of personal gain. They make decisions unilaterally, trusting in their own judgment and instincts above the counsel of others. They are mavericks who challenge the status quo, sometimes at the expense of the greater good, bending rules when they feel it's necessary to reach their goals. To these leaders, success is not just the best measure of their worth; it is often the only one that matters. They push boundaries, and in doing so, they can either lead their ventures to new heights or to precarious edges. They view life as a competition where for them to win, others must lose. Their self-worth is tightly bound to winning and personal achievements. They prioritize their own interests and believe in their unique talents. Recognition of their abilities and contributions is essential for them. They have a strong sense of entitlement and predestination for leadership. Enjoyment of attention and a conviction in their own ideas characterize their self-image. They adopt a utilitarian view of success, willing to use any means to achieve goals, even if it involves manipulating others. The value of others is assessed based on their utility in achieving personal ambitions. They see relationships transactionally, ensuring personal gain. Self-assurance in their judgment leads to a preference for autocratic decision-making. They trust their intuition over others' input and feel they have a superior understanding of the “big picture.” They are willing to bend or break rules if it serves their vision of innovation and success. Ethical flexibility is rationalized if it leads to profitability or maintaining power. There’s a reluctance to admit fault, often attributing criticism to jealousy or misunderstanding. They have a short-term focus on immediate gains rather than long-term strategic planning. Societal norms or ethics may be disregarded if they conflict with personal goals. The Consequences of Ego Driven Leadership Their resistance to criticism and feedback severely limits their capacity for learning and adaptation. By prioritizing their own ideas and dismissing others', they miss out on valuable insights that could steer the company away from potential pitfalls or toward innovative solutions. This closed-minded approach can hinder a startup's ability to pivot or adapt to market changes, a crucial aspect of scaling successfully Their transactional view of relationships undermines trust and loyalty within the team. Viewing interactions as mere exchanges diminishes the intrinsic motivation of team members and erodes the sense of community and belonging. As startups grow, the complexity and demands of managing a larger team require a cohesive, motivated workforce. Ego-driven leaders struggle to foster this environment, leading to high turnover rates and difficulty in attracting and retaining top talent. The overconfidence of ego-driven leaders in their abilities and judgment can lead to risky and impulsive decisions without adequate consideration of potential consequences. While risk-taking is a part of startup culture, unchecked ego can push a company toward unnecessary dangers. Scaling successfully requires balanced, data-informed risk-taking that ego-driven leaders might overlook in favor of bold, but ill-advised, moves. Ego-driven leaders' tendency to bend rules and ethical boundaries for short-term gains can pose significant reputational risks. Such behavior not only jeopardizes the company's standing with customers, investors, and regulatory bodies but can also lead to internal cultures that justify unethical actions. As startups scale, maintaining a strong ethical foundation becomes increasingly important for sustainable growth and avoiding legal and reputational pitfalls. Their focus on immediate results often comes at the expense of long-term planning and sustainability. Ego-driven leaders might prioritize quick wins to boost their image or satisfy short-term financial goals, neglecting the investments in infrastructure, culture, and strategy necessary for scaling. This shortsightedness can stunt a startup's growth trajectory and leave it ill-prepared for future challenges. Lastly, the need for control that characterizes ego-driven leadership impedes their ability to delegate effectively and empower team members. Scaling a startup requires distributing responsibilities and trusting others to make decisions. Ego-driven leaders struggle with this aspect of growth, often becoming bottlenecks for decision-making and innovation, which can slow down the organization and demotivate talented employees Principle-Centered Leadership Leaders who exhibit emotional maturity and responsibility steer their teams with a clear sense of purpose, guided by the ethos of service and community impact rather than personal glory. They recognize their role as an opportunity to uplift and empower, measuring triumph not in the echo of their accolades but in the progress and well-being of their collective. They understand that a variety of perspectives fuels smarter strategies and true innovation, and they champion a collaborative approach that harnesses the collective strength of their team. At the heart of their leadership style is a commitment to trust and respect, essential ingredients in cultivating an environment where open communication and innovation can thrive. These leaders are adept in emotional intelligence, balancing empathy with self-awareness, and adjusting seamlessly to change. Their decisions are anchored in integrity, serving as a living example to their teams. With a gaze set on the long-term horizon, they emphasize sustainable practices and resilience, knowing that meaningful success is not a sprint but a marathon. By investing in their people, they're not just building a team; they're nurturing an ecosystem where every member can flourish. They view leadership as a duty to serve rather than a right to command. They measure success by the positive impact on the team and community. They prioritize serving others and contributing to the greater good. They value diverse perspectives and encourage every voice to be heard. They emphasize collaboration and shared leadership for collective success. They practice and model integrity and transparency. They create a safe space for innovation and honest feedback. They celebrate collective achievements to motivate and unite the team. They believe in the interconnection of the team's and organization's welfare. They utilize emotional intelligence for empathetic and effective leadership. They commit to personal growth and adaptability based on continual feedback. They uphold ethics and integrity as foundations for all decisions. They focus on sustainable success with a long-term perspective. They invest in building strong relationships and a cohesive team. They maintain resilience and positivity in the face of challenges. 16. They encourage work-life balance for team health and sustained performance.
My methodology is a comprehensive approach that delves deep into the intricacies of founder competencies to unearth the secrets of success. Through meticulous analysis and categorization, this methodology provides valuable insights into the behaviors that correlate with success, offering a roadmap for aspiring entrepreneurs navigating the startup journey.
Securing second-round funding is often a pivotal milestone on the journey toward success. While innovative ideas and promising markets certainly capture investors' attention, one fundamental aspect consistently stands out as a critical factor: the strength and experience of the founding team. Behind every groundbreaking startup is a team with the vision, expertise, and determination to turn dreams into reality. Investors recognize that a strong team can navigate challenges, capitalize on opportunities, and drive sustainable growth. Let's delve into why team strength matters and explore the statistical evidence supporting its importance in securing second-round funding. Diverse Skill Set: The Engine of Innovation A diverse skill set within the founding team is akin to having a well-equipped toolbox for tackling the complexities of startup life. Startups require a range of talents spanning product development, marketing, sales, finance, and operations. According to research conducted by Harvard Business Review, teams with diverse backgrounds and skill sets are more innovative and better equipped to solve complex problems. Investors seek teams that complement each other's strengths and compensate for weaknesses, fostering a culture of collaboration and creativity. Startups with diverse teams are more likely to identify unique market opportunities, develop innovative solutions, and adapt to evolving industry landscapes. Relevant Industry Experience: Navigating the Terrain Experience is invaluable in the startup ecosystem, where uncertainty and rapid change are constants. Investors place great emphasis on founding teams with relevant industry experience, as they bring insights, networks, and best practices that can accelerate growth and mitigate risks. According to a study by CB Insights, startups founded by teams with industry experience are more likely to achieve higher levels of success and attract follow-on funding. Seasoned entrepreneurs understand market dynamics, customer needs, and competitive forces, positioning their startups for strategic advantage and sustainable growth. Track Record of Execution: Turning Vision into Reality Ideas are abundant in the startup world, but execution is the true currency of success. Investors scrutinize the track record of founding teams, seeking evidence of execution prowess and the ability to deliver results in the face of challenges. Startups that have demonstrated traction, achieved key milestones, and effectively allocated resources are viewed favorably by investors. According to data compiled by PitchBook, startups with proven execution capabilities are more likely to secure second-round funding and position themselves for long-term success. Investing in People, Investing in Success Team strength emerges as a decisive factor in securing second-round funding. Investors understand that while ideas may spark interest, it is the people behind those ideas who ultimately drive success. Startups with diverse teams, relevant industry experience, and a track record of execution stand poised to capture investors' attention and fuel their growth trajectory. As the startup ecosystem continues to evolve, the emphasis on team strength remains unwavering, underscoring the timeless adage: "Invest in people, and success will follow." For startups eyeing the next stage of growth and expansion, investing in team strength is not just a strategic imperative—it's the cornerstone of enduring success. Team strength emerges as a decisive factor in securing second-round funding. Investors understand that while ideas may spark interest, it is the people behind those ideas who ultimately drive success. Startups with diverse teams, relevant industry experience, and a track record of execution stand poised to capture investors' attention and fuel their growth trajectory. As the startup ecosystem continues to evolve, the emphasis on team strength remains unwavering, underscoring the timeless adage: "Invest in people, and success will follow." For startups eyeing the next stage of growth and expansion, investing in team strength is not just a strategic imperative—it's the cornerstone of enduring success. It is however important to understand that: What got you here, isn't going to get you there!. Being ready and willing to accept that there needs to be some measure of personal growth is what sets Founders who can scale, apart from those who won't.
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