Effective decisions, a mix of gut and information – avoid constipation by data

Effective decision-making is the cornerstone of leadership 

In today’s dynamic business landscape characterised by volatility, uncertainty, complexity and ambiguity, the ability to make swift but considered, decisions is what separates the men from the mice. In an era of global connectivity and instant information, unnecessary delays can be costly. 

As consumer preferences evolve rapidly, market trends shift unpredictably, employee aspirations change frequently and as technology increasingly drives procedures, processes and workflows, artificial intelligence influences human work patterns and opportunities appear and vanish before one could say Jack Robinson, the need for decisive action has never been more crucial. So much so that I would unhesitatingly state that a person who lacks the skill to make decisions within a timeframe demanded by the nature and the significance of the specific subject, is not cut out to be a leader. In my coaching and mentoring efforts, both as a corporate executive and as leadership coach/mentor in a period spanning 54 years, I have found that the entrenchment and enhancement of decision making and decision execution abilities in a ‘coachee’ have been the most arduous and challenging.

Effective decision-making is the cornerstone of leadership. Leaders must navigate difficult situations, consider numerous options, and make time sensitive, well-informed choices which are in sync with business goals and values. There is a school of thought that thorough, painstaking and exhaustive analysis is key to success in business decisions. Whilst I do not totally disagree with it, I believe that there are many situations in today’s business world where speed is more important than precision. A rapid response based on a mix of accumulated data and intuition emanating from familiarity and exposure is the natural action. 

Opportunities must be seized before they disappear, and challenges must be navigated adroitly before they take on unmanageable proportions. The iron must be struck at its hottest. Decision making must happen out of a combination of intuition, data and agility. Speed and flexibility are of the essence. It is all about acting swiftly based on what is known without compromising on accuracy or thoroughness. Decisiveness is an essential ability of an effective leader.

To act quickly, decisive leaders regularly familiarise themselves with the Critical Success Factors (CSFs) of the total organisation or the areas of the organisation they lead, and they proactively update themselves with the latest state of play by garnering the relevant information through pre-established channels. Studies also indicate that decisive leaders are cognisant of, and appreciate, the knowledge held by, and the expertise of, their direct reports, internal colleagues, external colleagues and various other sources. Regular information gathering, and a close gauging of the adequacy of the gathered information, are a part of their normal routine. 

Decisive leaders

Decisive leaders have an acquired knack of weighing the pros and cons of the need for more information and the consequent prolonged deliberation versus the costs of delayed decisions and poor choices. The fine balance between accumulated intuition and rigorous data analysis is often the difference between an average and excellent organisation. 

Whilst examples of quick decisions and relatively swift decisions which profoundly shaped countries, economies and industries, run into millions, the ones which immediately spring to my mind are the quick decision made by Harry Truman, the 33rd president of the United States of America, to drop atomic bombs on Hiroshima and Nagasaki as a means of forcing Japan to surrender and end World War II, the ground changing decisions made by, and the expeditious execution of, Joseph Licklider, American psychologist and computer scientist, Paul Baran, Polish American engineer, and Donald Davies, Welsh computer scientist and internet pioneer, in creating the internet through time-sharing between computer users over wide area networks, distribution of data in message blocks and adoption of packet switching as opposed to circuit switching, and the ‘much against the run of play’ decision made by Steve Jobs to persist with the iPhone. 

Whilst there are many who believe that the atomic strikes against Japan were premature, it did bring the war to an end. The internet, on the other hand, has enabled mind boggling advances in information technology while Steve Job’s persistence with the iPhone is often quoted as the gold standard of decision logic in marketing. The point to note is that the aforesaid decisions were made quickly. It is history which tells us whether a decision was bad or good and that too may have divided opinions. 

Sri Lanka won the Cricket World Cup in 1996 after Arjuna Ranatunga, the captain, won the toss and asked Australia to bat. Ranatunga later reminisced that he, and Dav Whatmore, the coach, had visited the stadium the previous night and that the “weight of dew” on the ground led them to believe that it would be advantageous to bat second. While there was a rationale to the decision, there was no certainty regarding the outcome. History records that Sri Lanka won. I wonder what would have been the peoples’ reaction had Sri Lanka lost! 

While making decisions can be challenging and very unnerving at times, I am a believer that it is better to make a wrong decision than not decide at all. Many are the instances, in the early years of my life, where my indecision resulted in missed opportunities, increased stress, and regret. However, with the passage of time, I realised that it was far better to make a decision, even if it turned out to be wrong, than not make a decision. At least, I know that I tried and failed! Failures were opportunities for learning in that they provided me with valuable feedback in enabling course correction, forced me to seek new opportunities, and helped me to build confidence. I am not in any way stating that making wrong decisions on a regular basis is acceptable. What I am saying is that we must not avoid making decisions because we fear the outcome and/or we fear failure. It was Theodore Roosevelt, the 26th president of the United States of America, who said, “In any moment of decision, the best thing you can do is the right thing, the next best thing is the wrong thing, and the worst thing you can do is nothing. “I love the quote because it resonates with, and justifies, my attitude to decision making.

There is currently a significant focus on data gathering and data analysis in the decision-making process. On top of that, artificial intelligence (AI) is enabling the performance of a variety of advanced functions, including the ability to see, understand and translate spoken and written language, analyse data, interpret data and make recommendations and decisions. Empirical and anecdotal evidence confirm that effective data gathering, and analysis help decision makers verify, understand, and quantify complex issues which require rational and insightful solutions. 

Data-driven decision-making

It is, therefore, not unnatural, in this digital age, for leaders and organisations to access and analyse data as a natural first step in decision making. In a bid to remain competitive, data-driven decision-making has become the preferred, essential, and sometimes the only, approach for organisations in areas ranging from strategy, operations, supply chain, marketing and human resources and other stakeholder management. Whilst data has always played a prominent part in my decisions, I have found that, in this very abstract and highly ambiguous world, data alone cannot provide the ‘big’ and full picture. 

I have always employed gut and instinct based on experience, exposure, expertise, good judgement, simplism and common sense as an affirming component of the decision-making process. There are many who believe that intuition has no place in the rationality of science and data. However, I have found instinct/gut to be a powerful form of pattern recognition. Notwithstanding the aforesaid, I am also acutely aware that trusting one’s gut alone may lead to bias and overly simplistic thinking and can be detrimental to sound decision making. 

Although the choice between data and intuition is often very situational, in today’s dynamic and complex business world an appropriate mix of both is what works best in practice. We make some choices quickly and automatically, relying on mental shortcuts our brains have developed over the years to guide us in the best course of action. The best decisions come from knowing when to trust your gut and when to pause and think. Instead of relying solely on one approach, the key is adaptability. That is assessing the situation and applying the right method at the right time. Successful decision-makers refine this skill through experience, reflection, and learning from both mistakes and successes. 

Pure gut and instinct decisions serve well in fast-moving, repetitive situations, while gut and data help in long impact strategy decisions and life’s major choices. The real skill is to master both. So, next time you are faced with a decision, ask yourself: Is this a moment for speed or strategy? The more intentional you become with decision-making, the better your choices, and outcomes, will be.

Consequent with the easier, and relatively cheaper production, availability and storage of data enabled by advanced technology, many leaders have gone bonkers and have found themselves constipated by an over-intake of information. Such overload has, in many instances, brought about a state of ‘analysis-paralysis’. ‘Analysis-paralysis’ occurs when an overload and the rapid influx of information and the options/choices arising out such information lead to overthinking and a logjam in decision-making. Decision makers seeking the perfect solution or riddled by the fear of making the wrong choice find themselves caught in the vice grip of unending analysis, examination of excessive ‘what-ifs, inconclusive reevaluation, and hesitation, leading to losing sight of the overall goal. 

The ‘paradox of choice’ as conceptualised by Barry Schwartz, American psychologist, submits that while having more choices might seem beneficial, it can lead to greater anxiety, indecision, and ultimately, less satisfaction with the final decision. The ‘paradox of choice’ and ‘analysis paralysis’ describe how having too many options can lead to indecision and dissatisfaction, rather than empowerment, due to the increased cognitive effort and potential for regret associated with making a choice. In this context, it is important that leaders understand the difference between maximising and satisficing in decision making where fast versus slow thinking, and factors such as risk tolerance and choice overload, impact outcomes. Maximising is when one strives for the absolute best outcome through exhaustive search, while satisficing involves settling for a solution which meets the minimum criteria through an emphasis on efficiency than on over optimality. 

Action over inaction

Tom Peters and Robert Waterman, the authors of the bestselling monograph, “In Search of Excellence,” highlighted ‘a bias for action’ as a crucial characteristic of successful organisations. As it implies, a ‘bias for action’ emphasises on quick decision making and a willingness to act decisively. It favours action over inaction even in the face of uncertainty and incomplete information. It is all about getting on with it and not letting analysis paralysis hinder progress. There are many leaders who continue to ‘ready-aim-aim-aim’ without firing. It is a sure-fire way to miss opportunities and lose competitiveness. Interestingly, Peters and Waterman advised firms to do minimal homework and adopt a ‘ready-fire-aim’ marketing strategy when launching new products/services which are anchored in new technology and capability. 

Their contention was that corrections and refinements would happen along the way, based on customer feedback. It is an approach which appeals to entrepreneurs because it is action oriented, decreases product development time and costs and focuses more on customer needs than on the technology per se. Whilst it may apply well to products/services built on new technology, this approach will be reckless if you are introducing products/services, which are founded on known technology and are already in the marketplace. 

In such an instance the more traditional “ready-aim-fire” approach is appropriate because of the need to study competitive products/services in identifying where the real value lies and in ensuring that the product/service being introduced measures up to market expectations before launching. What must be avoided in all instances is a “ready- aim-aim-aim” approach.

A discussion on decision-making will be incomplete if one ignores the great opportunity leaders have in striking a balance between maintaining control and empowering their teams to make decisions independently. Empowering employees as decision-makers through decision rights is a key strategy that forward-thinking organisations embrace. When employees are empowered to make decisions, they become more engaged, motivated, and committed to the company’s success. Such decision-making empowerment allows employees to take ownership of their work and contribute their unique insights and expertise, leading to more innovative solutions and effective problem-solving. 

Empowering employees as decision-makers requires providing the necessary support and resources. Leaders must establish clear expectations, communicate the organisation’s vision, and ensure that employees have access to relevant information and training to make informed decisions. This enables employees to make confident choices and take ownership of their actions, knowing they have the organisation’s backing. The Kepner-Tregoe Decision Making method is a structured approach to problem-solving and decision-making which I am familiar with. The process consists of four key stages: situation appraisal, problem analysis, decision analysis, and potential problem analysis. It is an effective tool in helping organisations make better decisions and resolve issues effectively.

Considering various perspectives

By seeking input from diverse stakeholders and considering various perspectives, leaders can ensure that decisions are not influenced by personal biases but are congruent with the organisation’s values and long-term objectives. Effective decision-making at leadership level contributes immensely to building a solid foundation of trust, transparency, and inclusivity. Leaders of today encounter various types of decisions which have their own sets of challenges. These decisions can be categorised as routine decisions, non-routine decisions, adaptive decisions and innovative decisions. 

Routine decisions, as the name implies, cover repetitive and predictable scenarios which we are familiar with and are usually well-prepared for. Such decisions are made without much thought, are spontaneous and are often governed by programmed behaviour, long established policies and by the norms of society. Non-routine decisions arise when unforeseen circumstances disrupt the norm and subject to importance in the timeliness of response, require leaders to think on their feet. This is where instinct comes to the fore. Adaptive decisions also arise out of unforeseen circumstances but unlike non-routine decisions the threat is of a larger dimension and invariably more complex. 

Such circumstances demand deeper consideration and wider perspective. These include adaptability in the new circumstances and the ability to thrive in the new environment. 

These decisions usually have a generous proportion of data relative to instinct. Innovative decisions are proactive decisions which capitalise on opportunities and often lead to significant positive changes within the organisation. They are often a mix of gut and data with the proportions between the two driven by the situation. 

In conclusion, the choices we make shape our lives daily. For leaders, the stakes are high. With increasingly complex challenges and a rapidly changing world, the ability to make quick, informed decisions is essential for guiding organisations through uncertainty and towards success. 

(The writer is currently a Leadership Coach, Mentor and Consultant and boasts over 50+ years of experience in very senior positions in the corporate world – local and overseas. www.ronniepeiris.com.)